The Nigerian real estate landscape is an interesting field with several opportunities. If you are a newbie, our ABCs of real estate will help you navigate the beginning phases. While real estate can be a lucrative adventure, it could be your worst nightmare when you don't know the rules of the game. In this guide, we explored 10 Don'ts of real estate in Nigeria.
Don’t Of Real Estate In Nigeria
1. Don’t Ignore The Title Documents
Disputes about the legitimacy of property ownership are a common feature of the Nigerian real estate market. Anyone who has ever been caught in that web will admit that it's not a good place to be. Such challenges occur because the title documents were not critically examined.
Before you purchase any property, ensure to check title documents like the C of O, deed of agreement, and receipts. Also, request for another document that proves the legitimacy of property ownership.
For this phase, it is best to work with a lawyer or a real estate expert. Their years of experience will help smoke out fraudulent acts and fake documents that could cause challenges later.
2. Don’t Neglect Due Diligence
In Nigerian real estate, due diligence isn't optional; it saves your money from vanishing. Due diligence is the process of verifying the legitimacy and authenticity of a property. While at it, you will check for the ownership history, background of the property, and past or current legal issues.
.png)
Neglecting this phase is an easy way to lose your money. First of all, you may mistakenly purchase a property that is involved in fraudulent transactions. You might also walk your way into a property that is being disputed over.
When conducting your due diligence, ensure not to limit it to what meets the eye. One best practice you should engage in is visiting the land registry and government agencies to conduct background checks.
3. Don't Skip Property valuation.
Properties in Nigeria don't operate by a price list. As such, it's easy to fall victim to overpriced properties. Before any real estate financial transaction, ensure to get the services of a professional property appraisal.
These persons are skilled in real estate pricing and can determine the fair market value for any property. Even though these persons would charge for their services, it is usually more bearable than falling victim to overpriced properties.
4. Don’t Make Payments Without A Written Agreement
Never make payments without a written agreement. It puts you at the mercy of the seller. Unfortunately, if they are fraudsters, they could use that opportunity to change the initial agreement. In some worse situations, they may not transfer ownership to you.
In such scenarios, it would be difficult to take any legal action against them because there is no legal document. A best practice to engage is to sign your agreement in the presence of a lawyer, and also have media recorded evidence of the agreement signing process.
5. Don’t Rush The Transaction Process
A rushed transaction process is trouble in the making. It doesn’t give you enough time for legal checks, and adequate verification. It also reduces the amount of time for proper investment if you ever get to done.
.png)
No matter how much you are in a rush, avoid impulse decisions making when dealing with real estate. Take your time to verify ownership, inspect the property, and understand the purchase terms. Also, partner with legal and property professionals to guide your decision-making process.
6. Don’t Ignore Land Use Regulation
Land use regulations and zoning determine the purpose a property can be used for. Failure to find out about these laws could lead to property misuse that would attract penalties. Unfortunately, the penalty might also involve demolition of your property.
In Nigeria, some zones are reserved for specific uses. Ensure to check with the local government authority and town planning to confirm zoning before buying a land in Nigeria.
7. Don’t Partner With Unlicensed Agents
"Cheap" is most times more expensive. Several unlicensed agents tend to position themselves as cheaper alternatives. On the surface level, this might seem true. However, the challenges of dealing with unlicensed agents are numerous. First of all, their lack of licensing might be a pointer to their ignorance about legal standards.
.png)
Since they don’t know these standards, there is no way they can uphold them. As a result, you stand the risk of being misrepresented or defrauded. Before partnering with any agent, always ensure to verify their credentials. Also, confirm that their license is from relevant regulatory bodies.
8. Don’t Fall For Deals that are Too Good To Be True
If it's too good to be true, it's most likely illegitimate. Several fraudulent sellers often use low prices to attract unsuspecting buyers .Once they have the buyer's attention, they tend to speed up the process so they can disappear without any trace.
.png)
If at all you will be buying an underpriced property, ensure to verify the sellers claims. Also, do your due diligence and work with professionals so that you are on the safe side.
9. Don’t Buy A Property Without Inspection
In these days of technology, it is easier to depend solely on images and videos. As much as possible, always ensure to inspect a property physically before purchase. Failure to do this might lead to nasty surprises like poor infrastructure, flooded areas, or nonexistent property.
If you won’t be able to visit the property yourself, ensure to send a trusted representative. You can have them go with real estate professionals so that you get credible reports.
10. Don’t Overlook Proper Documentation
Ensure to document all financial transactions – no matter how little. If possible, have both written and electronic copies. Either copy will be a good backup if the other copy gets damaged.
One best practice to engage is insistence on receipts and documentation of all transactions. As much as possible, ensure the seller appends their signature on all these documents alongside yours.
Conclusion
The Nigerian real estate industry is an interesting field with several opportunities. As numerous as these opportunities are, so are the risks. This guide highlights common mistakes several investors make. It also documents best practices that could help you navigate such mistakes like a professional.
