Purchasing your first property in Lagos can be both amazing and overwhelming. The Lagos real estate market is quite flexible, complex, and sometimes unpredictable; these challenges should make a first-time buyer be on guard.
Whether you’re looking to purchase a property in Surulere, Ikoyi, Victoria Island, Lekki, or anywhere else in Lagos, what matters most is that you’re making informed decisions that are important to secure a valuable property investment.
As property specialists with a deep understanding of the Lagos real estate landscape, we at Rent House Surulere know that numerous first-time buyers make costly mistakes that could have been avoided with proper guidance.
This is why we came up with a comprehensive guide to point out ten critical mistakes to avoid when venturing into Lagos’ property market for the first time. This article will give you practical insights to help you make the best decision at this point.
See also: 10 things to consider before buying a property in Surulere.
10 Real Estate Mistakes to Avoid as a First-Time Buyer in Lagos
1. Lack of Proper Location Research
One of the most significant mistakes first-time property buyers make in Lagos is rushing into purchasing properties without thorough location research. Lagos is a city of clear social differences; this has made property values and living conditions vary.
Unlike many other cities, Lagos has unique location challenges, including traffic, flooding, infrastructure development, and security concerns.
A property might be affordable because it requires moving through 3 hours of daily traffic. Areas like Lekki Phase 1, parts of Ajah, and some sections of Surulere experience flooding from time to time, and this can have a negative impact on your quality of life.
Take time to understand the climate and environmental situation of any location you’re considering. Ensure you visit the property at different intervals or send someone to inspect it for you.
Speak with people who currently reside in such a place about what happens in the area. Also consider its closeness to your workplace, schools, markets, and healthcare.
Don’t just rely on the agent’s description, which might not be true. A property in Yaba might cost more than a similar one in Ajah, but the transportation savings and convenience might make it more economical in the long run.
Remember that in Lagos, location determines your property’s value and impacts the quality of your daily life.
2. Underestimating the Total Cost of Acquisition
Many first-time buyers in Lagos focus only on the advertised property price, and they fail to sum up the additional costs involved in acquiring a property.
When purchasing a property in Lagos, prepare for numerous additional expenses beyond the property price. These include legal fees (typically 5-10% of the property value), agency fees, the cost for a survey (which varies depending on location), and a Certificate of Occupancy (C of O) or Governor’s Consent.
Other payments like the development levies, stamp duties, and registration fees (which cost approximately 2% of the property’s value), Lagos State Government taxes, including Land Use Charge, and contributions for infrastructure development may also apply, especially in new estates.
Let’s say a property advertised at ₦50 million in Surulere. The actual cost after including all additional expenses might exceed ₦65 million.
This 30% increase surprises many first-time buyers; sometimes it may force them to compromise or even abandon transactions halfway.
Before going for any property, create a comprehensive budget that includes all potential costs. Ask for a detailed breakdown of all charges from your agent or developer. Also, budget some money for unforeseen circumstances.
Also, note that negotiating the property price is possible in some instances. Many fees are negotiable too, especially agency fees and some other charges. Don’t hesitate to question charges that seem excessive or unclear.
Also read: How much do you need to buy a property in Surulere?
3. Failing to Verify Property/Land Documents
In Lagos’ complex land tenure system, documentation is so important, and it represents perhaps the most dangerous pitfall for first-time buyers.
Just like a valid land transaction, payment for Lagos properties requires verification of several critical documents. These include Certificate of Occupancy (C of O), Governor’s Consent (required for transferring property with C of O), Survey Plan, Deed of Assignment, Receipt of Land Purchase, and Development Permit.
Without this proper documentation, issues from indigenous landowners can complicate the ownership of the place. Also, it could be a government property that has been sold multiple times, or the document given could be a fake one.
These are reasons why you should be alert if the seller is reluctant to show original documents, the price is significantly below market value without clear justification, the seller pressures you to make quick decisions, the property lacks a survey or has a dispute over boundaries, or the seller discourages you from involving a lawyer.
Ensure you have a reputable property lawyer who specialises in Lagos real estate to conduct thorough legal procedures.
It may be quite costly, but it can save you from losing your entire investment. Also, check for government acquisition status and confirm that the land is properly owned by the government.
As a first-time buyer in Lagos, don’t ever make payments for a property before completing proper documentation verification.
You can pay little by little if the owner insists that payment has to be made within a specific period of time while investigations are conducted.
4. Bypassing Professional Inspection
The excitement of finding a great property often leads first-time buyers to skip professional property inspection. This turns out to be a decision that frequently leads to regret.
Lagos properties face unique challenges that make professional inspection very important. Buildings constructed in places that are prone to flooding may have serious foundation problems.
Some caretakers use substandard materials that won’t withstand Lagos’ harsh weather. This has made the seasonal flooding issues a recurring issue. Some builders cut corners to get substantial materials in order to reduce costs.
There have been cases of new homeowners in Lagos discovering severe cracks appearing within months of purchasing a property, dampness on the walls, electrical systems that are faulty or cannot support basic appliances, plumbing systems that fail during the first heavy rainfall, and leaking roofs.
These and more are reasons why you should hire a qualified building inspector as a first-time buyer to thoroughly evaluate the property. Don’t mind the cost, but look at the value you’ll be spending your money on.
If you’re getting a property or building under construction, make an inspection step-by-step before builders get to the next phase. Try to be present during inspections and ask questions as well.
5. Making Emotional Instead of Rational Decisions
The emotional aspect of buying is everywhere; it happens even in the Lagos real estate market, particularly because of the commercial activities there and how social status is held in high esteem.
As a first-time buyer, you might fall for this trap of making emotional decisions instead of rational ones if you’re not careful and knowledge-driven.
The fear of missing out has made many buyers rush their decision and focus on appearance instead of how sound the property’s structure is.
In order to avoid emotional buying, simply list out what you want before beginning your search. Have a non-negotiable list and a budget for what you want.
If you realise that your emotions are taking over, you can involve someone who is trustworthy to advise you about properties you’re seriously considering.
6. Making Poor Financial Choices
When it comes to financing a property in Lagos, it requires quite a lot more attention. The mortgage market in Lagos has specific characteristics that first-time buyers must understand. It has high interest rates of over 15-25%, and they have short tenure periods with limited options.
First-time buyers often get financial assistance from a mortgage when they are not ready to sustain it in the long run.
Beyond mortgages, first-time buyers sometimes go into lending finances without proper documentation, leading to poor financial choices.
You can consider mortgage banks that offer fair loans or payment plans that are quite fair and do not have hidden costs.
7. Ignoring Community and Estate Management Issues
Getting a property in Lagos should enable you to build relationships with people in the community and not create tension with them or have issues with the management.
Lagos properties, especially those in estates and communities that have gates, depend on estate management and community development fees.
The ability to provide water, power, and security most time is dependent on community and estate management, and so you should not ignore them.
First-time buyers are often surprised by high service charges in premium estates, sometimes by the lack of transparency or deteriorating services.
This is why, as a first-time buyer, you need to ask for a detailed breakdown of service charges and what they cover.
If need be, ask someone about the service charge payment and management for the estate or community in order to better understand. Also, ask how fast the caretakers and estate managers are in responding to requests.
8. Overlooking Future Development Plans
Lagos is increasing quickly, with development plans that can change a particular location and the value of properties.
Just like any other growing state, the future value of properties in Lagos is significantly dependent on government infrastructure, commercial development, environmental projects, and so on.
As a first-time buyer, you need to be aware of the Lagos State Development Plan. At least have an idea of the major infrastructural projects or industrial developments that may create opportunities or cause pollution in the location where you desire to acquire a property. Beyond asking questions, you can consult the master plan for developing areas.
It is also important to understand how the roads are connected (to town or your workplace), the commercial centers available in that location, and other facilities.
9. Failing to Consider Resale Value
First-time buyers often focus only on their current needs without considering that they may sell the property in the future. In an unstable property market like Lagos, it is important to consider the resale value before getting a property.
Resale value in Lagos is affected by the history of flooding in a place, building quality, infrastructure, the title of property documents, road access, and so on.
This means properties with multiple access routes have higher value, and value declines due to overcrowding or poor infrastructure.
In the Lagos property market, apartments that are well-built and secured in estates with reliable management often attract buyers.
Properties in neighbourhoods with stable infrastructure and properties like Ikoyi, Banana Island, Lekki, Victoria Island, and so on that have independent water and power systems can have higher resale value.
Even as a first-time buyer, think like an investor. Consider whether the features attracting you to the property would appeal to future buyers.
At least, any property you’re considering should have good security, a reliable water supply, working drainage systems, and quality construction.
Also, take note of some places that have consistent appreciation. You should consider getting properties from such areas.
10. Rushing the Process
It seems the most common mistake first-time buyers make is rushing through the process of getting a property. As established, the Lagos State real estate market is a complex one, and so are the sales and rentals of properties in the state.
Researching a property can literally take months, including the documentation, negotiation process, legal processing, financing, and so on.
First-time buyers sometimes face pressure from agents claiming other buyers are waiting to get the property.
They use limited-time discounts to create a state of urgency for buyers or use other kinds of pressure.
You need to work with a realistic timeline to acquire a property in Lagos. Go for diverse options and evaluate the properties based on the criteria you look for.
Also, make comparisons from your findings and make rational choices from them rather than responding to sales pressure.
Reputable agents like Rent House Surulere and caretakers will understand and give you some time to make proper verification.
If your current living situation creates pressure to rush decisions, get a temporary place to stay. This will prevent you from making a hasty purchase that you may regret.
Conclusion
Purchasing your first property in Lagos is a great feat, but so many first-time buyers have made mistakes in the process. To avoid costly mistakes, it’s important to know these common pitfalls and how to escape them.
Rent House Surulere is here to guide you when getting a property. We offer expert consultation as well. With our deep understanding of the Lagos real estate market, we’ll help you make profitable decisions and find your dream property.
