How To Buy A Land In Lagos On A Budget And Not Bankrupt Yourself
by Barr. Matthew
Every day I get phone calls and emails from people stating their intention to buy lands and ask me to recommend lands for them to buy that I think is a good deal and has no Omo-onile problem (sic) but we all forget something and that is the cost implications of purchasing a land. A lot of people think if they have one amount of money set aside in a bank, that covers the amount to purchase a land in Lagos and the rest is history.
But that’s where we are all wrong. Purchasing Land in Lagos is a tough and difficult experience that requires skill, prayers, financial acumen and smartness. Many of the abandoned lands scattered all around Lagos boils down to lack of proper budgeting and planning and that’s why many Omoniles have the guts and opportunity to resell other people’s lands. Today, I want to us to learn from the experiences I have garnered over the years on how to properly budget and plan before we venture into the process of buying a land.
1. Never buy a Land based on Emotional Reasons.
Just because your neighbor bought a Land or colleague or family member recently purchased a Land and you have that amount of money and you throw it into purchasing a land too, you would run into a lot of futuristic problems and would be left with no choice but to resell it unceremoniously. You have no idea why they bought that land at that moment and how their account balance is compared to yours and what exactly they intend to do with that land. Following others unreasonably (sic) isn’t good without any concrete plan. Buy because there is a concrete reason not emotional buying.
2. Always Plan Ahead and prepare your mind that you want to buy a land at a specific time.
Whether its during the dry season or raining season, choose the moment you intend to venture into it and stick with it. If you plan to buy a land in December and you have the money in July, don’t say because you have the money now, and its best you buy it now because it looks cheap, you will run into problems when you don’t have time to tend to the land, fence it and sort other unforeseen financial obligations you weren’t prepared for. Don’t let Agents push you to buy lands that you’re not prepared to purchase financially. Be firm and stick to your guns and budget because the Agent won’t help you in sorting out other financial issues once the land and his Agency fee has been paid.
3. Set Your Budget.
Before you buy a Land make sure you research on the following before you venture out into buying a land.
a. Check for the cost of the Land. Always negotiate and price the Land. Land isn’t a loaf of bread being sold in a supermarket. You can always cut a few kobo (Nigeria lowest currency denomination) here and there because the Seller wants to sell. Don’t despair if you negotiate today and the seller doesn’t agree, there is still tomorrow to negotiate harder. That money you have saved can go along way into paying other bills that you didn’t prepare for. Just because you have N2Million stored away in a bank and they tell you that there is a land for sale going for N2Million, then you have to sink all that amount at once on the land, you will run into a lot of problems financially in future. If you have N2Million for a land, don’t buy a land more than N1.2 to N1.5Million. That remaining 500,000 NAIRA will assist you in paying for other bills.
b. Always visit the Land you intend to buy at some point or sent a representative to check the texture if the soil whether it is a Dry or Swampy Land.
Whether the Land is in Badagry or Lekki phase 1, once the land is Swampy just know you will spend triple the amount you spent on purchasing the land on sand filling and solid foundation. Don’t be fooled when agents market swampy lands for you at a reasonable price that you think it’s a steal or bargain. Be rest assured when its time to build, you will spend a fortune. Always confirm the status of the land and if you think you have the financial capability to buy a swampy land to sand fill, then go for it but if your working on a budget, learn to scout for lands that won’t require you to spend too much on the land.
c. Research all the Cost associated with purchasing a Land.
Buying a land in Lagos comes with some hidden fees that you should be prepared to compulsorily pay before, during and after a transaction. I’m always surprised a lot of people enter into landed purchases without being aware of these associated fees:
(i)Search fees: Put between N50,000 to N100,000 aside To conduct a search in the Land. It makes no sense spending millions to buy a Land without conducting a search before you throw away all your money foolishly to scammers to purchasing government acquired lands.
(ii) Survey Plan: Every Land bought must have a Survey Plan in your name. Survey Plan varies according to the area. Depending on location of the Land, survey fees range from N150,000 to N250,000. Always set this money aside compulsorily because its your first line of defence to show you’re the owner of the land. A land bought without a Survey to back the land up shows you just want to throw away your money.
(iii) Agency Fees: Most Agency Fees are between 5 to 10% of the Cost of the Land, so be prepared to pay the Agent after you have paid the Owner of the land.
(iv) Legal Fees: Most Legal Fees are also 5% the Cost of the Land. A lawyer must be brought at this moment to draw up the contracts and documents between the Seller and You.
(V)Document Signing Fees: This fee is linked with lands bought directly from Omonile families. If you buy a land directly from a private Seller you don’t need to pay this fee but its mainly associated with Family land. Depending on the area you could end up paying between N50,000 to N1Million Naira. Always cross check and ask your Agent or the Seller how much it would cost to purchase a land in that area and what their Signing on Fees are. Most are Negotiable though so play tough.
(vi) Ancillary Building and Community Fees: In association with paying the Signing fees another compulsory set of Fees to be paid includes the Money for Foundation which ranges between N50,000 to N500,000 depending on the area. If you choose not to pay this fee, you will encounter a lot of difficulty with the thugs of the community who wont give your workers peace of mind to build. Other fees include community development fee and youth development fee. It varies from area to area so you must inquire thoroughly what the other fees are from your agent to ask the Sellers what your paying.
After you calculate all these fees from the cost of the land to the Omonile signing fees, you can then have an idea how much it will cost you in total to buy a land in Lagos effortlessly. Always make sure you have the money to make all these payment because when you start paying all these fees instalmentally, you are attracting problems. The land will not the transferred to you 100% till you sort the bills or you will get heckled by the Agents or the Omoniles to balance up and if they sense any delay they can now engage in foul play to resell your land or make it complicated for the land to be transferred to you peacefully.
