IPA Payment rates and Plans

15th March 2016

Table of Contents
I.

Introduction

II. IPA rates and payment plan at Cytonn

III. Case Studies
IV. Conclusion and recommendation

I. Introduction

Introduction
IPAs are not considered as employees of a specific real estate company
An Independent property Agent (IPA) is a person or business that arranges the selling, renting or
management of property
An independent property agent receives commissions for the property that he or she sells, and is not
considered an employee of a specific real estate company
Independent property agents are thought to be able to provide their clients with a wider array of services when it comes
to property, for example marketing, liaison and follow up with potential purchasers

II. IPA Rates and Payment Plan at Cytonn

IPA rates and payment plan at Cytonn

Cytonn IPAs feel they are not paid well
Cytonn Real Estate finds, evaluates, structures and deliver world class real estate investment products for
its investors, depending on the client's needs
The IPA payment plan is as follows:
IPAs are paid a commission of 2% of the selling price
50% of the commission is paid upon signing of the sales agreement, after the client has paid a deposit of
10%
The remaining 50% is staggered throughout the construction period
The IPAs are only tasked with selling Cytonn property
Problem statement
Less pay compared to other real estate agencies
Lengthy payment process

III. Case Studies

Lloyd Masika
Lloyd Masika Limited is a Registered Valuation and Estate Agency firm
Lloyd Masika is a renown premium real estate firm offering property valuation, letting of both commercial and residential
properties and property management services established in 1979

The agency department responsible for sale of property is the Agency (Letting and Sales) Department

The department has been involved in the letting of landmark shopping malls and office buildings in
Nairobi which include Telposta Towers, Crossroad Mall, Sarit Centre
In commercial sales, one of the projects is the sale of Delta Centre in Nairobi's Upperhill to the World Bank
and International Finance Corporation which was one of the largest single sales transaction in East African
region

In residential sales, one of the remarkable projects is the sale of KCB plots in Runda, Runda Mimosa and
Runda Mumwe

In Rentals, the department is involved in letting projects which include Nanu Apartments off Chaka Road,
Longonot Apartments, Norfolk Towers among others

Lloyd Masika
Llyod Masika charge commission of 3.3%
Llyod Masika charge a commission of 3.3% of the value of the property sold
The 3.3% applies to both the residential and the commercial property
The amount is paid after the deposit has been made
They deal in completed projects

Ebony Estates

For sale commissions, they charge 3% of the sale price

Ebony Estates Ltd is a Valuation and Estate Management firm of long standing and since its inception and incorporation
in June 1982
It offers top of the range professional services in the fields of valuation, estate management and estate agency. The firm
is duly registered under the provisions of the Companys Act (Cap. 486) and is a limited liability company.
The company has property on sale in Hatheru Road in Lavington, Golden Home in Westlands, Town House convent
Road in Lanington among others.
Some of there service include:
Property Agency: assessment of the current market value/rent of the property
Property Valuation: the company undertakes valuation of all types of fixed and moveable properties
For sale commissions, they charge 3% of the sale price
They expect 50% of the commission to be paid upfront and the balance the sale is completed
The payment plan is negotiable between parties involved

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Kings Developers Limited

Kings Developers Limited
Kings Developers Limited (KDL) is a fully Kenyan-owned real estate development company that was
founded as part of the Royal Group of Companies. Since its inception in 2009, Kings Developers Limited
has become synonymous with the development of ultra-high commercial, residential, retail, hospitality and
mixed-use properties, making it the premier quality homes developer in the East African property market
Kings Developers ltd is highly ranked and has received several award in the real estate industry
In meeting the demand for quality, luxurious home solutions in the property market, Kings Developers Limited has
undertaken to professionally provide the following specialized services under her roof:
Engineering services these include civil, structural, mechanical and electrical designs.
Project consultancy, legal advisory, project advisory, and project facilitation.
All design services including architectural, interior, landscape and quantity survey services for small, medium and
large property projects.
Real estate planning, management, and marketing which includes position targeting, promotion and sales.

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Kings Developers Limited

Kings Developers pay their IPAs 2%

Kings Developers pay their IPAs 2% of the value of the property sold as commission

The amount paid is paid after the signing of sale agreement and once the total cost of the amount has
been paid

They do not negotiate with the IPAs

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Ace realtors Limited

Ace realtors charge 3% commission

Ace realtors is a Kenyan real estate company specialized in property search and sales for clients as well as post-sales
services, which includes residential and commercial leasing and property management

Their sole business is that of identifying able and credible buyers/tenants on behalf of their clients whose properties are
in the market

The IPA payment plan is as follows:

They charge 3% commission of the selling price

They are paid 10% when the client pays a deposit, 50% is staggered through the construction period;

The remaining 40% is paid upon completion of the payment

Other services offered inclusive in the 3% include:

Preparation of sales and marketing strategy

NB: The payment plan is negotiable

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Halifax Estate Agency Limited

Halifax estate agency pays commission after full sale

Halifax Estate Agency Limited is a Kenyan real estate company duly incorporated under the companies
Act Cap 486 and started itsoperation in 1999

Halifax Estate Agency Limited has made its presence felt in the Kenyan property and real estate industry
offering a full range of agency, property management, valuation, professional and consultancy services

The IPA payment plan is as follows:

They charge a commission of 3% of the selling price

The commission is payable after full sale/ full amount has been paid by the client

Other services they offer inclusive in the 3% commission are:

Marketing of property

Preparation of marketing plans

Preparation of marketing budget

NB: The payment plan is negotiable

Source: Inquiry

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Villa Care Kenya

They charge a commission of 3%
Villa Care Limited offers a wide range of fully integrated real estate services through both commercial and residential
properties to a diverse clientele
The payment plan is as follows:

They charge a commission of 3% of the selling price

They are paid 20% when the client pays the deposits, the remaining 80% is paid upon sale of the property

Other services they offer inclusive in the 3% commission include

Assisting in marketing of property at expos

Preparation of marketing plan

Preparation of marketing budget

NB: The payment plan is negotiable

Source: Inquiry

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Hass Consult Real Estate

The commission is paid once
Hass Consult Real Estate are Agents offering Possession, Land, Sale, Let, property Development, Valuation
& Management Services
The payment plan is as follows:

They charge 3% commission of the selling price

The commission is paid once. When a purchaser wants to book a unit, they pay a deposit to Hass. When
the sale agreement is signed by all parties, the developer send Hass a photocopy of the signed
agreement and Hass releases the deposit to the developer (in accordance with the sale agreement) less
their commissions.

Other services they offer inclusive in the 3% are:

Creation and review of a project marketing plan

Preparation of production and media budgets
Creation and art direction of all project related branding exercises
Co-ordination and implementation of all marketing works
Direct marketing to database of clientele
Target marketing to identified groups of potential purchasers
Liaison and follow-up with potential purchasers
Collection of initial buyer deposits Scheduled sales reporting &Maintaining communication with buyers
through to sale agreement signing

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Bahati Ridge Development Ltd

The payment is one off

They are the developers of Bahati Ridge, a middle income integrated development in Thika on 95 acres of
land

They focus on holistic, wholesome lifestyle that combines residences, shopping, recreational and office
facilities

For independent property agents, they pay 2% of the unit price as commission

The whole amount of the commission is paid after the sales documents have been signed

Bahati Ridge website

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Tysons Limited
They take 3% commission that is negotiable

The company undertakes Real Estate Consultancy services including valuation of property, property and
facility management, agency, feasibility study and project management, in Kenya and other countries in
the East African Region

Typically, for their agency services they get 3% commission of the unit price

The 3% is paid out as follows:

50% on signing of papers and payment of deposit

The other 50% is paid out throughout the payment period of the client

The payment mode therefore is similar to Cytonns, only varying on the rate

Tysons Limited website

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Kwetu Realtors
1% of the unit price is paid on payment of the 10% deposit

They offer a wide scope of real estate services more so specializing in rental, management and sale of upmarket residential properties and a variety of commercial properties in Nairobi, Nakuru and Mombasa

They charge a 3% commission for their agency services. The commission is paid out as follows:

1% of the unit price is paid on payment of the 10% deposit by the buyer to the developer

The remaining 2% is paid once the transaction is complete once the unit is fully paid for

The rates and payment plan are negotiable

Source: Kwetu Realtors website

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Summary
Outline of IPA payments

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Summary
Half of the sample pay in installments
From the table:

Ebony Estates, Ace Realtors, Villa Care, Tysons Ltd and Kwetu Realtors (5/10) pay/are paid their
commission in installments up to the completion of payment by the client

Lloyd Masika, Hass Consult and Bahati Ridge Development Ltd (3/10) pay/are paid their commission in full
once the clients pay the deposit

Halifax and Kings Developers (2/10) pay/are paid their commission once the client completes payment of
the unit

Source: Kwetu Realtors website

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IV. Conclusion and Recommendation

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Conclusion and Recommendation

The rates paid by Cytonn to its IPAs is fair
The rates paid by Cytonn to its IPAs is fair considering they do not offer Cytonn additional services such as
branding and preparation of marketing plans.
Cytonn IPAs also use Cytonn material such as banners when advertising hence they do not incur that coat.
Cytonn should maintain the rate at which it pays its IPAs and make the payment process negotiable

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Q&A
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