9 Essential Steps for Property Buyers in Lagos Without Issue

Estimated reading time: 10 minutes

Owning property in Lagos, Nigeria has always been a desirable goal. Nonetheless, the city’s real estate market, while promising, can also be riddled with challenges. Property acquisition is often complicated by scams, land disputes, and the constant threat of “omo-onile” (land grabbers), making it a daunting task for many.

Despite these obstacles, many individuals have successfully navigated the Lagos property market and realized their dreams of homeownership.

This guide aims to empower potential property buyers with essential information and strategies to guarantee a safe and hassle-free experience. By understanding the common pitfalls and adopting effective approaches, you can confidently embark on your property journey in Lagos.

Who is a Property Buyer

A property buyer is an individual or entity that acquires real estate. This encompasses a wide range of individuals and organizations, including:

Individual Property Buyers

• Homeowners: People who buy properties for personal use as their primary residence.
• Investors: Individuals who buy properties as investments, seeking to generate rental income or appreciate over time.
• Developers: Property buyers who buy land or existing properties to redevelop them into new projects.

Institutional Property Buyers

• Real Estate Investment Trusts (REITs): Companies that invest in real estate and distribute income to shareholders.
• Pension Funds: Retirement funds that invest in real estate to generate returns for their beneficiaries.
• Insurance Companies: Companies that may invest in real estate as part of their investment portfolios.
• Government Agencies: Governments may buy properties for public use or to support economic development.

Other Types of Property Buyers

• Foreign Investors: Individuals or entities from other countries who invest in real estate in Nigeria.
• Non-Profit Organizations: Non-profits may buy properties for their operations or to offer affordable housing.

Factors Affecting Property Buyer Behavior

Understanding the factors that influence property buyer behaviour is essential for real estate professionals, investors, and policymakers. By understanding these factors, it is possible to tailor products, services, and policies to meet the needs of different types of buyers and push the real estate market ahead.

Economic Conditions

• Overall Economic Stability: A stable economy with low inflation and steady growth can create a favourable environment for property investment. Conversely, economic uncertainty or recession can dampen demand for property.
• Interest Rates: Lower interest rates typically make it more affordable to borrow money for a mortgage, which can stimulate demand for property. Conversely, higher interest rates can make it more expensive to borrow, reducing demand.
• Job Market: A strong job market with low unemployment rates can boost confidence among potential buyers, leading to increased demand for property. Conversely, a weak job market with high unemployment rates can make buyers more cautious and reduce demand.

Demographics

• Population Growth: A growing population, particularly in urban areas, can increase demand for housing and other property types.
• Age Distribution: The age distribution of a population can influence demand for different property types. For example, young families may be more likely to buy single-family homes, while retirees may be more interested in retirement communities.
• Family Size: The size of families can impact the demand for different property types. Larger families may need more space, while smaller families or individuals may prefer smaller units.

Government Policies

• Tax Incentives: Government tax policies, like property tax deductions or capital gains tax exemptions, can encourage property investment.
• Zoning Regulations: Zoning regulations decide how land can be used. Changes in zoning regulations can impact the availability and demand for different property types.
• Land Use Policies: Government policies related to land use, like urban renewal or conservation efforts, can affect property values and investment opportunities.

Lifestyle Preferences

• Location: Buyers may prefer different locations based on factors like proximity to jobs, schools, amenities, and transportation.
• Amenities: The availability of amenities, like parks, shopping centres, and recreational facilities, can influence property desirability.
• Property Features: Buyers may have specific preferences for property features, like the number of bedrooms and bathrooms, style, and size.

Market Trends

• Property Prices: Trends in property prices can affect buyer behaviour. Rising prices may make some buyers more cautious, while falling prices may create buying opportunities.
• Rental Yields: The potential for rental income can be a significant factor for investors. High rental yields can make properties more attractive to investors.
• Investment Returns: Overall returns on property investment, including both capital appreciation and rental income, can influence buyer decisions.

By understanding these factors, real estate professionals can better find target markets, tailor their offerings, and foresee changes in demand. Additionally, policymakers can develop effective policies to support the real estate market and promote economic growth.

Essential Steps for Property Buyers in Lagos

Buying property in Lagos, Nigeria’s bustling economic hub, can be an exciting but challenging process. The city’s dynamic real estate market offers a wide range of opportunities, but it also comes with legal and financial complexities. Whether you’re purchasing land, a home, or an investment property, it’s crucial to navigate the process carefully.

This guide outlines the essential steps to help you make informed decisions, avoid common pitfalls, and guarantee a smooth deal.

Set a Clear Budget and Location

The first step in your property-buying journey is to set a clear budget and decide your desired location. Real estate investment, especially in a bustling city like Lagos, is a significant financial commitment. It’s essential to assess your financial capabilities carefully and set realistic expectations.

While working within your budget constraints, remember that location plays a crucial role. Strive to find the best possible area that fits your financial situation, as it directly influences the property’s value and your overall quality of life.

Engage a Specialized Property Lawyer

When buying property, it’s essential to recognize that not all lawyers are created equal. Real estate transactions need specialized knowledge and skills. Hiring a property law specialist ensures that you have a professional who understands the intricacies of the process.

From negotiations to title transfer, a skilled property lawyer can guide you as a property buyer through each stage, minimizing risks and protecting your interests. By entrusting your deal to a competent and experienced legal professional, you can navigate the complexities of the property market with confidence.

Find Your Ideal Property

With your legal representation in place, the next step is to start searching for properties in your desired location. An experienced estate agent can be invaluable in this process. They can:

• Find suitable properties: Based on your preferences and budget, they’ll show properties that match your criteria.
• Create a shortlist: Help you narrow down your options to a manageable list of potential properties.
• Arrange viewings: Schedule appointments to inspect the shortlisted properties.

Your lawyer might also be capable of recommending a reputable estate agent to help you in your property search.

Verify the Seller’s Legitimacy

To protect yourself from fraudulent transactions, it’s essential to thoroughly investigate the seller’s identity. Many individuals, including those with false claims to family land, try to sell properties they don’t own.

A qualified property lawyer can conduct thorough searches, ask the right questions, and ask for necessary documentation to verify the seller’s ownership and authority to sell. By taking these precautionary steps, you can significantly reduce the risk of engaging with unscrupulous sellers and guarantee a safer property buy.

Conduct Thorough Property Due Diligence

After verifying the seller’s legitimacy, your lawyer will conduct a thorough property due diligence process. This involves:

1. Performing relevant searches: Your lawyer will search public records to verify the property is not involved in any legal disputes, like bankruptcy or foreclosure proceedings.
2. Reviewing documentation: They will examine documents like the title deed, survey plans, and building permits to verify that the property is free from encumbrances (liens or claims) and pending litigation.
3. Confirming government acquisition status: Your lawyer will check if the property is prone to any government acquisition plans, which could affect your ownership rights.
4. Identifying overriding interests: They will verify that there are no overriding interests, like easements or rights of way, that could limit your use of the property.

By conducting a comprehensive due diligence process, your lawyer will help make sure that you are purchasing a property that is free from any legal or ownership issues.

Conduct a Physical Inspection

After completing due diligence, schedule a physical inspection of the property. This is your opportunity to assess the property in person and make sure it aligns with your expectations.

Consider bringing a certified surveyor to the inspection. They can verify the accuracy of the survey plans and offer valuable insights into the property’s boundaries and potential issues.

Negotiation

Once the property buyer and seller have reached a mutual agreement and are confident in proceeding with the deal, they move ahead with the deal. At this stage, the price of the property has already been negotiated and settled upon. It’s crucial to note that legal representation remains essential throughout this process.

Your lawyer will offer valuable insights into your future financial obligations, including stamp duty fees and other government charges. These extra expenses must be carefully factored into your overall budget for the property buy. 

Documentation and Finalization

Once negotiations are finished, both lawyers will draft and negotiate the necessary completion documents. For Lagos land transactions, this typically involves three main documents:

• The Contract of Sale: This outlines the terms and conditions of the deal, including the buying price, payment schedule, and possession date.
• The Receipt: This document acknowledges receipt of the buying price.
• The Deed of Assignment: This legal instrument transfers ownership of the property from the seller to the buyer.

Completion and Post-Completion 

Once both parties have concluded, signed, and exchanged contracts, made payment, and the property buyer has all the original title documents, the buyer becomes the owner of the property and can take possession.

After the property buyer has taken physical possession of the property, the next step is to file all the necessary documentation with the appropriate government authority and then start the process to obtain the Governor’s consent for the deal.

Once the Governor’s consent is obtained, a Certificate of Occupancy is issued, and the property deal is then considered finished.

In Conclusion

Navigating the Lagos property market requires careful planning, thorough due diligence, and expert guidance. By adhering to the steps outlined in this guide, you can increase your chances of a successful and hassle-free property buy.

Remember, investing in real estate in Lagos can be a rewarding effort, but it’s essential to approach the process with caution and informed decision-making. With the right strategies and professional support, you can confidently embark on your property journey in this dynamic city.

FAQs

What is the most important factor to consider when buying property in Lagos?

A thorough due diligence process is crucial to guarantee the property is free from legal issues and encumbrances.

How can I find a reliable property lawyer in Lagos?

You can ask for recommendations from friends, family, or other professionals in the real estate industry. You can also search online for reputable law firms specializing in property law.

What are the common scams to watch out for when buying property in Lagos?

Be wary of sellers who offer properties at significantly below market value, or those who pressure you to make a quick decision. Always verify the seller’s legitimacy and conduct thorough due diligence.

How much should I save for a down payment on a property in Lagos?

The down payment necessity varies depending on the lender and the property type. Nonetheless, it’s generally recommended to save at least 20% of the property’s buying price.

What is the Governor’s Consent, and why is it important?

The Governor’s Consent is a government approval required for certain property transactions in Lagos. It is essential for obtaining a Certificate of Occupancy.

What are the potential risks involved in buying property in Lagos?

The risks include fraudulent sellers, property disputes, and government acquisition. Conducting due diligence and working with experienced professionals can help mitigate these risks.