Real Estate Mistakes to Avoid as a First-Time Buyer in Nigeria

Buying your first property in Nigeria can be both thrilling and challenging. For young executives and Nigerians in the diaspora, real estate is a big-ticket investment, often seen as a way to build wealth or have something worth coming back home for.

However, navigating Nigeria’s real estate market comes with its fair share of challenges, including legal intricacies, dealing with agents, and unexpected costs. This guide highlights common mistakes you should avoid to ensure your purchase goes smoothly.

1. Not Doing Enough Research on the Property and Location

One of the most common mistakes when purchasing property is rushing into a decision without thorough research. Understanding both the property and its location is essential, as these factors significantly influence value and future prospects.

Young executives are often attracted to up-and-coming areas, but without familiarity with the neighborhood’s development plans, security, and accessibility, they may set themselves up for disappointment.

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For diaspora buyers, consulting reliable contacts on the ground is crucial. Whether it’s family, friends, or reputable real estate agents, these insights can help you navigate areas you’re unfamiliar with.

For example, a high-demand neighborhood could face traffic congestion and flooding issues can impact livability and long-term property appreciation. Without proper research, you risk purchasing in a location that may not meet your needs or yield the expected return on investment.

To avoid these pitfalls, here are some viable solutions:

• Prioritize Research on Neighborhood Development: Investigate local government plans, upcoming infrastructure projects, and zoning regulations. This information can often be found on municipal websites or through local news sources.
• Engage with Real Estate Professionals: Consult with reputable real estate agents who specialize in the area you are interested in. They can provide insights on market trends, property values, and potential future developments.
• Speak with Local Residents: Talking to residents can offer a firsthand perspective on the neighborhood’s amenities, safety, and community dynamics. Use social media groups or local forums to connect with residents.
• Verify Property Documentation: When it comes to land documentation, it’s essential to consult a real estate lawyer. They can confirm the authenticity of property documents at the ministry of housing, ensuring that there are no legal issues that could affect your investment.
• Use Online Resources: Platforms like PropertyPro.ng can help you research available properties and compare prices in different neighborhoods. Additionally, local property forums and social media groups can provide valuable insights and recommendations.
• Assess Traffic and Accessibility: Analyze the traffic patterns during peak hours and the accessibility of major roads, public transport options, and proximity to essential services like schools, hospitals, and supermarkets.

By prioritizing thorough research and engaging with knowledgeable contacts, you can make informed decisions that enhance your chances of a successful property investment.

2. Trusting the Wrong Agents:

Real estate agents play a crucial role in the property buying process, but trusting the wrong one can lead to significant problems. In Nigeria, the real estate market includes both licensed professionals and “roadside” agents who may lack the expertise or integrity you need. While a good agent can help you find the perfect property, a dishonest one could mislead you, misrepresent property details, or inflate prices for their own gain.

To mitigate these risks, always conduct a background check before working with an agent. Ensure they are registered with relevant bodies like the Nigerian Institution of Estate Surveyors and Valuers (NIESV) or the Real Estate Developers Association of Nigeria (REDAN). If you’re overseas, seek recommendations from trusted contacts who have previously worked with agents in Nigeria.

Additionally, PropertyPro.ng is an excellent resource for finding reliable real estate agents. Our comprehensive features licensed professionals who meet industry standards, ensuring you connect with trustworthy individuals.

When it comes to signing contracts or making payments, it’s essential to involve your lawyer to review all documents and ensure everything is above board. This extra step can help protect your investment and give you peace of mind as you navigate the real estate market.

By utilizing reputable sources like PropertyPro.ng and conducting thorough checks, you can confidently engage with the right agents and make informed decisions in your property search.

3. Skipping the Legal Process:

There are other law issues that comes with land, manners people fall into the traps, warnings to not overlook – those needs to be cited

The legal aspects of buying property in Nigeria cannot be overlooked. Too often, buyers make the mistake of not verifying title documents before purchasing a property.

The excitement of finding the “perfect” property can cloud judgment, but skipping due diligence can have dire consequences. It is crucial to ensure that the property has a valid Certificate of Occupancy (C of O) or Governor’s Consent, which proves that the property is not under any government acquisition.

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Engaging a qualified real estate lawyer is non-negotiable. Your lawyer will help verify all documents, ensure that the seller is the rightful owner, and guide you through the legal processes.

This includes drafting and reviewing sales agreements, deeds of assignment, and confirming that the property is free from disputes.

Moreover, there are various legal issues related to land ownership in Nigeria that buyers should be aware of. Some common pitfalls include:

• Unregistered Land Transactions: Purchasing land without proper registration can lead to disputes over ownership. Always ensure that the property has been duly registered with the appropriate land registry.
• Unclear Boundaries: Disputes often arise from unclear or poorly defined property boundaries. It’s essential to have a land surveyor confirm the exact boundaries before proceeding with any purchase.
• Fraudulent Documentation: Some sellers may present fake title documents. A lawyer can help verify the authenticity of these documents with relevant authorities.
• Land Use Act Compliance: Properties must comply with the Land Use Act, which governs land allocation and usage in Nigeria. A lawyer can provide guidance on this to prevent future issues.
• Existing Encumbrances: Properties may have existing mortgages, liens, or other encumbrances. Conducting thorough due diligence can help uncover these issues before they become your responsibility.
• Community Land Rights: In some areas, community claims can supersede individual ownership rights. Understanding local customs and laws is crucial to avoid conflicts.

Buyers should also be wary of the emotional aspect of property buying; the excitement of a potential purchase can lead to oversight of these critical legal details. Always prioritize due diligence and consult your lawyer before making any commitments. This proactive approach can protect you from costly mistakes and ensure a smoother property transaction in Nigeria.

4. Underestimating Hidden Costs:

A good solution is finding facility managers/or utilizing property managers

Focusing solely on the purchase price while ignoring other expenses is a mistake many first-time buyers make. Beyond the price tag, numerous additional costs are involved in buying property in Nigeria. Legal fees, agent commissions, survey plans, community development fees (CDAs), and utility connection fees can quickly accumulate, leaving you with an inflated budget.

For example, legal fees can range from 5% to 10% of the property’s value, while agent fees typically hover around 5%.

If you’re buying land in a new area, you might also have to cover costs for infrastructure development, such as access roads and electricity. For diaspora buyers, extra expenses may include hiring someone to oversee the property until you’re ready to occupy or rent it out.

To mitigate these financial pitfalls, a good solution is to engage facility managers or utilize property management services.

Property managers can handle various responsibilities, including:

• Overseeing Property Maintenance: They ensure that your property remains in good condition, saving you the hassle of managing repairs and maintenance from afar.
• Tenant Management: If you intend to rent out the property, a property manager can help find reliable tenants, conduct background checks, and handle lease agreements.
• Utility Coordination: They can assist with setting up and managing utility connections, ensuring you avoid delays in essential services.
• Local Knowledge: Facility managers often have extensive knowledge of the local market and can provide insights on potential hidden costs or neighborhood dynamics.
• Financial Management: They can help you keep track of expenses and ensure that all financial matters, such as property taxes and service fees, are managed effectively.

By factoring in these additional costs and considering the benefits of hiring property management services, you can create a more comprehensive budget and make informed decisions throughout the property buying process.

This proactive approach will help you avoid unexpected financial burdens and ensure a smoother transition into your new property.

5. Not Inspecting the Property Thoroughly 

Pictures can be deceiving, especially in real estate. Relying on images or videos without physically inspecting the property (or having someone you trust do so) is risky. Many first-time buyers, particularly those in the diaspora, make this mistake, only to find out later that the property has structural issues or poor finishing.

Before making any payments, ensure you or a trusted representative inspects the property.

Pay attention to details such as the quality of construction, the plumbing system, electrical wiring, and overall layout. It’s also worth inspecting the surrounding area for potential environmental problems like flooding.

6. Ignoring the Importance of a Long-Term Plan

It’s important to know why you’re buying a property in the first place. Are you looking for a family home, an investment, or a place to rent out? Your goals should determine the type of property you buy and its location.

Many young executives buy homes without thinking about their long-term plans, which can lead to regrets down the line.

If your goal is to rent out the property, make sure the area is attractive to tenants. On the other hand, if you’re buying with the intention of living in the property, consider proximity to your workplace, schools, and other amenities. For diaspora buyers, think about whether this property will serve as a retirement home or an investment you plan to flip later. Having a clear plan helps you pick the right property and avoid unnecessary headaches.

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7. Neglecting Essential Professional Involvement in the Buying Process

While agents can be helpful, they shouldn’t be your only point of reference when buying property. Engaging other professionals, like lawyers and surveyors, is crucial to ensure that the process is transparent and legally sound.

Surveyors will help you verify the exact boundaries of the land and ensure it matches the property title, while your lawyer ensures all legal documents are in order.

Involving these professionals helps protect you from fraud, title disputes, or buying land with incorrect boundaries. The cost of hiring these experts is a fraction of what you might lose if things go wrong, especially in a market where land ownership can sometimes be disputed even after purchase.

8. Not Preparing for Delays and Complications 

Real estate transactions in Nigeria can sometimes take longer than expected due to bureaucracy, delays in obtaining approvals, or disputes over property ownership.

Many first-time buyers become frustrated when things don’t move as quickly as they hoped, but this is often a natural part of the process.

Typically, the timeline for completing a real estate deal in Nigeria can vary significantly based on several factors, including the type of property, location, and the parties involved.

On average, you can expect the following timelines:

• Residential Property Transactions: For completed properties, the process can take anywhere from 4 to 12 weeks. This includes the time needed for negotiations, due diligence, documentation, and finalizing the sale.
• Off-Plan Properties: If you’re purchasing a property under construction, the timeline can extend to 6 months to 2 years depending on the project’s scale and the developer’s efficiency. Delays in construction due to financing issues, labor shortages, or material procurement can further extend this timeline.
• Land Transactions: Buying land can take 6 weeks to 6 months, depending on the due diligence required to verify ownership and clear any encumbrances. Securing land-use approvals and ensuring compliance with local regulations can also add to the timeline.
• Permits and Approvals: Obtaining necessary permits and approvals can be one of the most time-consuming aspects, often taking an additional 2 to 4 months. This is especially true if the property is in a densely populated or highly regulated area.

For diaspora buyers, managing these timelines can be particularly challenging due to the distance, which can complicate communication and oversight.

To mitigate stress:

• Stay Informed: Regularly check in with your agent or lawyer to get updates on the transaction’s status.
• Hire a Local Representative: Consider hiring a local property manager or representative who can oversee the process and handle any issues that arise in real-time.

Additionally, when purchasing off-plan properties, be prepared for project delays. Factors such as regulatory changes, weather conditions, or supply chain disruptions can impact timelines. It’s wise to budget for unforeseen expenses that may arise during the construction process, ensuring you have a financial buffer in place.

By understanding the typical timelines and scenarios involved in real estate transactions in Nigeria, you can better prepare for the process and make informed decisions that align with your expectations.

Conclusion

Buying your first property in Nigeria is a significant investment, but it’s essential to approach it carefully. By avoiding common mistakes like trusting the wrong agents, skipping legal checks, and underestimating hidden costs, you can ensure that your property purchase is smooth and secure.

Whether you’re a young executive looking to settle down or a Nigerian in the diaspora investing back home, make sure you do your research, seek professional advice, and plan for the long term. This will not only protect your investment but also ensure you get the best value for your money.