Basic things to know before purchasing a property in Lagos

 I get contacted on a daily basis from clients with interest to purchase properties and asking me to provide them with the details of a property that I could recommend to the to actually acquire for themselves, with no form of encumbrance or "omonile" issues. We mostly ignore or forget that the cost implication of buying a property in Lagos is of utmost importance. Many a people feel a fixed amount of money in their respective bank accounts will be enough to cover for all the expenses to be incurred during the purchase of a property and the remaining issues becomes history.

Unfortunately, we are wrong in that school of thought. Skill, smartness, financial acumen and most importantly prayers are required attributes that is required to be implemented in acquiring a property in Lagos. Lack and inadequate budgeting and planning has led to most of the abandoned properties scattered all across Lagos and this has led to why many "Omoniles" have seized the opportunity to resell other peoples properties and now I want you to learn from the experiences I have aquired over the years on how to properly budget and plan yourselves before we venture into the process of purchasing a property.

1. Don't ever purchase a Property based on Emotional Feelings :

Never purchase a property based on the fact that a member of your family, colleague or friends just bought a property and due to the fact that you know you have the money to make same purchase, you simply decided to use your hard earned money to to buy same property without any cause to do so, you will most likely end up into later problems and will be left with no further choice then, than to resell the property unceremoniously. You had no genuine idea why your neighbour purchased that property at that very moment and what their likely account balance compared to your own account, nor do you know their intention in respect of their plans with the property. Joining the bandwagon without a personal plan of your hold is risky in this case. Ensure you purchase a property based on a genuine reason to acquire same and not on sentiments or emotional purchase.

2.Do plan and be prepared to purchase a property at a stated time

Either during the raining season or dry season, reach a decision on the time you intend to venture into it and keep to it. If you have a plan to purchase a property in October and you could afford to purchase it in May, that doesn't mean you should purchase it now all because you have gotten the money now because it seems cheap, you will most likely pass through some challenges when you don't have the time to tend to it and sort any unforeseen financial obligations that you didn't plan for. Don't allow yourself to tossed around by Agents to purchase a property you ain't yet prepared to buy financially. Stick to your gun and be firm with your budget, because the Agent wouldn't be there to help you with other financial issues once you have purchased the property and paid him is Agency Fee.

3. Have aBudget

Make your research on the following check list below before venturing into purchasing a property.

a. Find out the value of the Property

It's good to negotiate at all times the price of a property. Landed properties are not goods sold in a Supermarket with a price tag. You can always negotiate to save cost by cutting down a few kobo here and there because the Seller wants to sell. Don’t be worried if you negotiate today and the seller doesn’t accept your offer. There is always tomorrow to negotiate better. The money you would saved can go along way to settle paying other bills that you didn’t bargain for. Simply because you have N7 Million Stored away in a Bank and you are told that there is a Property for Sale going for N7 Million, then you have to sink all that amount at once on the Property, you will most likely run into a lot of financial problems in future. If you have N7 Million to purchase a property, don’t buy the property for more than N6 Million. That remaining N1 Million Naira will assist you in paying for other bills.

b. Make it a point of duty to visit the Landed property you intend to buy or send your representative at some point to check the texture of the land if the soil is a Dry or Swampy Land.

Either the Property is in Ikoyi or Ikorodu, if the land is Swampy be rest assured that you will spend triple the amount you spent on purchasing the land on sand filling and solid foundation. Don’t be fooled when swampy lands are marketed to you at a very reasonable price that you think it’s a steal or bargain. Be in the know that when it’s time to build, you will spend a fortune more. Always confirm the status of the land and if you think you are financially capable to buy a swampy land to sand fill, then go for it but if you’re working on a budget, learn to scout for lands that won’t require you to spend too much on the land.

c. Find outall the Cost associated with purchasing a property

Buying a property in Lagos comes with some hidden fees that you should be prepared to compulsorily pay before, during and after a transaction. I am always surprised that a lot of people enter into property transactions without being aware of these fees associated with Property purchases. Examples of Fees that must be mandatorily paid for before, during and after the Property has been paid for includes:

(i)Search fees:This is usually paid before the purchase price. Which could cost between N50,000 to N100,000 which should be kept aside to conduct a search on the Property. It makes no sense spending Millions to buy a Property without conducting a search before you throw away all your money foolishly to Scammers in purchasing Government acquired Lands or encumbered Properties. If you choose not to pay Property Search and Verification fees please don’t cry or complain when something goes wrong with the landed property in future. You brought it upon yourself.

(ii)Survey Plan: Every Landed Property bought must have a Survey Plan that must finally be made in your name. Survey Plan differs according to the area. Depending on location of the Land and Size, survey fees range from N150,000 to N350,000. Always set this money aside compulsorily because It’s your first line of defence to show and prove you’re the owner of the land. A land bought without making a Survey Plan to back the land up shows you just want to throw away your money into the thin air.

(iii)Agency Fees:Usually Agency Fees are 5% of the Cost of the Land, so be prepared to pay 5% of the transaction fees to the Agent after you must have paid the Owner of the land the purchase price.

(iv)Legal Fees:Usually Legal Fees are also 5% the Cost of the Land. A lawyer must be brought at this stage to draw up the contracts and documents between the Seller and You (the purchaser).

(V)Document Signing Fees:This fee is linked with lands bought directly from the "Omonile" families. If you purchase a land directly from a private Seller you don’t need to pay this fee but its mainly associated with Family land. Depending on the Area you could end up paying between N50,000 to N1Million Naira. Always cross check and ask your Agent or the Seller how much it would cost to purchase a land in that area and what their Signing Fees are. Most are Negotiable though so play tough.

(vi)Ancillary Building and Community Fees:In association with paying the Signing fees another compulsory set of Fees to be paid includes the Money for Foundation which ranges between N50,000 to N500,000 depending on the Area. If you choose not to pay this fee, you will encounter a lot of difficulty with the thugs of the community who wont give your workers peace of mind to build. Other fees includeCOMMUNITY DEVELOPMENT FEES AND YOUTHS DEVELOPMENT. It varies from area to area so you must inquire thoroughly what the other fees are from your agent to ask the Sellers what you're paying.

After you must have calculated all these fees from the cost of the land to the "Omonile" signing fees, you can then have an idea how much it will cost you in total to purchase a land in Lagos effortlessly. Always make sure you have the money to make all these payment because when you start paying all these fees instalmentally, you are attracting problems. The land will not be transferred to you 100% until you sort the bills or you will get heckled by the Agents or the "Omoniles" to balance up and if they sense any delay they can now engage in a foul play to resell your land or make it complicated for the land to be transferred to you peacefully.

In my future Articles I will write, we will deal with the other fees which I think you should consider to secure your land and that Includes the fees and cost implications of the Land Information Certificate, Land Use Charge Fees, The cost of procuring either a C of O or Governors Consent and a Building Plan approval. Till next time I wish you the best in your future land transactions.