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Wednesday, February 21, 2024

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    Questions To Ask Your Realtor Or Real Estate Agent Before Buying Any Land/Property

    You wanna invest in real estate?

    Here are some questions you must ask realtors and firms before making any purchase/payment.

    These questions are often not available to the public and if you are not careful you’d be trapped.

    Have you ever bought a car from overseas? After paying for the auction, the shipping and sourcing fees, the dealer may not tell you about taxes and custom duties, unknown to you, these can set you back extra 5-10m

    Let’s go!

    1. What’s the grace period before development: You might want to purchase a land for land banking purposes, but unknown to you, in your deed documents there would be a clause “Development must commence 3months after purchase”, “Development must be done within 12months” etc.

    Funny enough, these details wouldn’t be available to you until after payment, so it’s very important to ask about this else, you’d be left with options like;

    – you could be transferred to another estate,
    – you may begin to pay certain non-development levy monthly
    – or worse loss a certain percentage from your purchase.

    2. How much is development levy and can you use an external developer?: This is another hidden way real estate firms hit it big from investors. When development starts, you are mandated to pay up to 200k – 1M naira depending on the purchase price and value for you to be approved for development. They call this inspection fee and it may aid you get the Survey plan, which shows you particular portion of the estate your purchased land exist.

    3. Can I use my own developer: Some estates makes it mandatory for you to use only their developer, this way any amount they tell you, you must go with it else your land remains like that.

    Some makes it lighter by saying, they’d develop till DPC level for you and you will be made to make full payment for that to them according to industry standards as at that time before they start.

    They say they do this for Quality controls.

    4. Are there any payments to estate when it’s time for me to sell my properties?: Yes oooo, many realtors won’t tell you this.

    As soon as you buy a land, you can’t sell without the intervention of the estate, even though you are the one that brought the buyer.

    Estates are made to enjoy upto 5% of what you are selling and all other levies due are to be paid to the estate by this new buyer.

    Even if you buy the land 5m today, and wishes to sell tomorrow to another, and the value stays at 5m, be rest assured that you won’t get up to 5m.

    5. Various other Levies: Depending on the estate and the facilities they provide, you may be made to pay Annual service charges for waste and road, streetlights maintenance, Waterbill — yes, some estate even if you stay in fully detached they must provide you metered water that you pay for, you are not expected to drill your borehole, Internet Bill etc.

    6. Unforeseen events: You must ask what title does the land carry, FCDA approved titles could be RofO and CofO, see both like a certification of a HND and a BSC holder respectively.

    In Abuja, we have what is called the AMAC titles for example, it’s like a local government title given for community land, most government parastatals don’t recognize that, hence always ask if it’s RofO or CofO— these titles are costly to acquire by them that’s why most land prices costs higher because of these titles.

    In an event of no title, you may forfeit your purchase or worse get value of what you purchased it for or instead gets moved to another location or worse loss everything entirely in an event of government overtaking the estate land— I know people who faced this.

    7: Refunds: let’s say, you get tired along the way in your land banking and you want urgent liquid cash, or you were paying in installments and couldn’t continue, then you want to request refund from the estate, you’d have to face a loss of up to 5 – 7.5% of the entire purchase value.

    8. Defaulting Installment Payments: You get a land, after paying the usual 30-70% initial deposit and you couldn’t continue or you exceeded payment, sometimes, the value is shifted to the highest value of the installment payment plan.

    Say you are paying 5m for 6months and you default, it may not move to 6.5m for 12months, if you still couldn’t meet up after 12months and it’s their highest payment plan, you’d be made to begin to pay interest on the original value or worse you are taken to court where you get a part refund and extra levy for not meeting up to signed contracts.

    I will stop here for now, in coming days, I shall be sharing more tips about real estate investing, land banking, and wealth creation through real estates.

    I felt it’s best some of us know these things that are not available to the public yet.

    Note: the list above may not apply to all real estate firms, some may have even more stringent rules while some of the things listed above could easily be bargained.

    ~ ©️Fidelis O.

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