The State wants to recruit estate agents to sell affordable houses and help buyers get mortgages in a bid to speed up the uptake of the project, which targets at least 200,000 units annually.
The Affordable Housing Board, which is in charge of the project, has launched a search for the agents, who will earn a commission for units sold and mortgages arranged between buyers and banks.
“The active involvement of estate agents is essential to the success of the affordable housing project (AHP). Agents play a crucial role in guiding buyers through marketing, purchasing process, mortgage processes, and property management that will ensure the success of the AHP both in the short and long term,” says the board in a tender dated November 20.
The agents will earn fees of 0.25 percent of the project cost for advisory services during the design and construction stages. They will then earn a sales and marketing fees of 10 percent on the first Sh100,000, six percent on the next Sh900,000 and three percent on the balance, fetching Sh94,000 for selling a Sh2 million house.
According to the tender document, the agents will be assigned specific sites in their regions of operation, allowing them to start marketing and sales during the off-plan phase and continue during and after the construction.
Successful bidders will be designated as principal estate agents, but will be allowed to sub-contract other agents, with the two sharing revenue on a 60/40 basis.
“The estate agent will be expected to conduct an effective marketing campaign to generate sales for the proposed AHP project…This may include traditional and modern marketing strategies to create awareness of the projects and attract homebuyers,” the board said.
Principal estate agents will be required to set up on-site sales offices to assist buyers in viewing the units and provide the necessary information in the case of off-plan purchases.
Once a buyer has been allocated a unit, the estate agent will oversee the preparation and signing of the purchase agreement and the payment of deposits and instalments.
Estate agents will also be charged with assisting homebuyers in identifying, applying and processing bank mortgages. The agents will charge a fee of three percent to the benefitting bank for the social housing, six percent for affordable housing and nine percent for the market units.
In addition, the agents will be involved in the management of the houses. They will be allowed to negotiate for a monthly service charge of between 15 percent and 30 percent, a markup of between 10 percent and 25 percent on operational expenses and five percent of monthly mortgage collections.
The agents will also get money from the periodic valuation of the houses, with fees pegged on the Valuers Act. The Act allows for between one percent and two percent fees on the first Sh5 million and between 0.25 percent and 0.5 percent on the remainder.
Information available on the board’s website shows there were 746,795 proposed housing units as at August 2023.
