6 COSTLY MISTAKES FIRST-TIME HOMEBUYERS IN NIGERIA SHOULD AVOID.
INTRODUCTION
Are you considering getting a new house/properties and it’s your first time?
Be careful not to make costly mistakes that could turn your joy into sorrow. As a real estate advisor, I have seen many Nigerians fall into avoidable pitfalls. In this post, we will explore the costly mistakes first-time homebuyers in Nigeria should avoid.
Mistake 1. Not Accessing Your Financing Options
Personally, assess your financing options and work within your budget. Don’t rely on others to tell you what you can afford. Make an informed decision based on your financial situation to avoid any costly mistakes.
However, in a situation where you’ll need to borrow money/get a loan to buy your property, ensure to look out for high-interest rates or loans with short repayment periods. These can make your monthly payments very high. Also, understand terms like “prepayment penalty” – some loans charge you extra if you try to pay them off early.
Although, not all loans are created equally. In Nigeria, you can get mortgages from commercial banks or the Federal Mortgage Bank of Nigeria. Each option has its pros and cons.
Take the time to shop around and understand different loan options. A good financial advisor can help you make the best choice for your situation.
Mistake 2. Not Inspecting the Location properly
When buying a property, it’s essential to check the location thoroughly to avoid unexpected surprises and costly repairs down the line.
However, don’t attempt to do it alone; partner with a professional like a real estate agent to uncover potential issues, such as flooding or other problems. Consider your daily life and how the location will impact it. Evaluate factors like proximity to work, schools, markets, hospitals, and entertainment options.
Also, look beyond the present, try to envision the future of the location. Are there plans for new roads or developments that could increase the property’s value over time? It’s essential to think ahead and consider how the area will evolve.
In Nigeria, common problems such as weak foundations, faulty wiring, or poor plumbing, can be difficult to spot without a trained eye. Hiring a professional inspector may seem like an additional expense, but it’s a worthwhile investment for your peace of mind. They can help in locating potential issues and save you from costly surprises. Remember, a thorough location inspection is important to ensure you’re making an informed decision.
Mistake 3. Not Making Due Diligence
When buying a property, make sure to do your homework by checking the property’s legal status. This is important to avoid any future legal or financial problems.
In Nigeria, we have various legal titles ranging from Governor’s consent to the Certificate of Occupancy (C of O). These titles are highly recognized in Nigeria and proves that the property is genuine. As long as the property is not in a government reserved area, other documents like survey plans and building approvals become vital. Engage the service of a surveyor and Lawyer to ensure these documents are properly checked and no error is made in the survey plan. If you are considering investing in Lagos, then read more about LEGAL TITLES recognized in Lagos by downloading this Ebook.
Ensure all legal documents are verified to avoid any future issues.
Mistake 4. Not Negotiating Effectively
While negotiating, remember that the first price is rarely the final price. Don’t be afraid to negotiate. Ensure to find the motivating factor in which the seller wants to sell so you can capitalize on it and use it for your Favor. Don’t try to negotiate alone, as you may end up paying more than you should. A real estate agent can help you with the negotiation process because they have the expertise and knowledge to get you the best deal possible.
This also applies to real estate companies. So, do your homework first. Find out how many similar properties in the area have sold recently. This gives you a good starting point for negotiations.
And remember, you can negotiate more than just the price. Maybe the seller can include some things or pay for certain improvements. Be creative and confident in your negotiations.
Mistake 5. Forgetting About Closing Costs
Buying a home isn’t just about the price tag you see. There are lots of extra costs that can sneak up on you if you’re not prepared.
For example, did you know you have to pay for infrastructure and development fees? Or survey and documentation fees? And don’t forget about legal fees and agent commissions. These can add up to a big chunk of money.
Then there’s the property (house) itself. It might need some work. Maybe you’ll want to add better security’s or sort out a reliable power supply. All of these cost extra.
Don’t forget to factor in closing costs, such as stamp duty, legal fees, and registration costs. These costs can add up quickly, so make sure to include them in your budget to avoid any unexpected expenses. It’s better to be prepared than surprised.
Mistake 6. Rushing into a Purchase
Don’t rush into buying a property. Take your time to research, inspect, and assess the property thoroughly. A hasty decision may lead to costly consequences.
We know you’re excited to own a property. But rushing can lead to big mistakes. Some agents or sellers might try to pressure you, saying things like “Buy now or lose the chance forever. Though this might be true, especially if the property is undergoing a distress sale.
But, take your time. Make a list of what you really need in a House or property and what would be nice to have. Look at lots of different properties. Compare them carefully. Remember, buying a property is a big decision – it’s okay to take your time to get it right.
But also note that some properties might not be in the market for long so delay May be dangerous. Plan and execute as soon as possible to enable you get the property of your choice.
CONCLUSION
Buying your first home in Nigeria is exciting, but it can also be tricky. By avoiding these seven mistakes, you’ll be well on your way to making a smart purchase. Ensure to do your legal homework, budget for all costs, take your time, choose a good location, get professional inspections, understand your financing, and negotiate well.
Got questions? Had experiences you want to share? We’d love to hear from you in the comments. And if you need more advice, don’t hesitate to reach out.
