There are a number of different ways in which you can purchase a property.
Private Treaty
The most common way to buy a property in the Uganda is by private treaty on the open market. The property will be advertised with an asking price and the seller may consider offers.
In Uganda, once an offer has been accepted and an agreement is reached, a contract of sale will be issued and those contracts signed and exchanged. The exchange of contracts will only happen once all searches have been completed and all funds have been arranged for the purchase. Because neither party is legally required to continue with the transaction until contracts have been exchanged, this part of the process is always considered to the main hurdle.
There are times where there may be multiple offers from multiple buyers and it can be time-consuming to keep going backwards and forwards. In this scenario, a ‘sealed bids’ situation may be proposed. Under this arrangement, a date and time will be set and each prospective purchaser has to submit their best and final offer. Once the deadline has been reached, the agent and vendor will review the best and final offers and then decide how to proceed. They are likely to take the offer they perceive to be the best but are not under any obligation to do so.
Off-Plan purchases
If you want to buy a brand-new property, a lot of homes can now be purchased off-plan which means you are committing to buying a new home before it has been built. Whilst you won’t be able to view the actual property to show you what the finished product will look like or have a show-home constructed in advance.
Once you have chosen your property, you will have to pay a reservation fee, normally $500 – $1000 to show your commitment, and then have a further 28 days to exchange contracts and pay the deposit. You should always double check where that money is held before the property is ready and what will happen to it should the developer go bust.
Once the property is complete, the developer will give you notice to complete the purchase and pay the balance of the money due. Before the property is handed over it should be ‘snagged’ for any faults or damage, which the developer can then remedy before you take ownership.
New build properties are appealing to investors as they are neutral, under warrantee and often in regeneration areas. Also, investors can potentially negotiate discounts for multiple unit purchases.
Advantages to buying off-plan
- You will often get the opportunity to customise your property as some developers allow you to choose or upgrade the fixtures and fittings.
- Buying early means you will get a better choice of the properties available and possibly a discount on the purchase price.
- There are often incentives to buy such as the developer paying the stamp duty on the purchase.
- If property prices are rising, you get the advantage of the value of the property rising during the construction process.
- New homes normally come with a guarantee (usually around 10 years) against faults and have an aftercare service.
- New homes are part of the regeneration process and you may be part of and enjoy the benefits of an area improving.
- You’ll be the first person to own and live it in.
Disadvantages of buying off-plan
- You don’t have the opportunity to view the actual property before it is built and so it can be difficult to visualise what it will be like.
- If property prices are falling then when the property is built it may not be worth as much as you have paid for it, especially if there is a long time between reserving and completing.
- You’re relying on the developer to deliver the property on time and therefore it can be harder to plan your move as construction delays often occur. When the property is ready, a lot of developers will give you 10 days notice to complete.
- You don’t have the option to pull out of the purchase if you don’t like it once it is built.
- If you need a mortgage to purchase the property, your mortgage offer is only likely to last six months and so will need to be extended it depending on when the property will be ready. If you cannot extend you will need to reapply for your mortgage before completion. If your circumstances have changed, the property price has fallen or the mortgage lending rules have changed then you may not be able to secure the same amount of money as you did before.
