Ikoyi, located on Lagos Island is one of the most affluent and desirable neighborhoods in Lagos, Nigeria. It is a top choice for luxury real estate investment, known for its upscale lifestyle, which attracts wealthy individuals, expatriates, and multinational companies.
From Banana Island to Parkview Estate, Osborne Forseshore Estate, or Ikoyi Cresent, these popular areas in Ikoyi are sort-after locations for most Lagos residents or investors. Whether you are buying property for residential use, rental income, or long-term investment, navigating the Ikoyi property market requires a strategic approach. This guide provides detailed insights into buying property in Ikoyi.
Steps to Buying a Property in Ikoyi Lagos
When buying a house in Ikoyi or any part of Nigeria, there are certain information and costs to consider, like the purchase price, legal fees, agency fees, and development levies. Additionally, other costs like stamp duties and government registration fees should also be considered.
Buying a property can be a daunting and exciting experience. With the high cost of purchasing a property in high-end areas in Lagos, there is always a risk of fraud.
But thankfully, with the below-highlighted steps, you can streamline the process and mitigate the risk of making mistakes. These steps include the following:
1. Define Your Budget
The first step in buying a property in Ikoyi Lagos is to set a clear budget. As one of the most expensive areas in Lagos, property prices may vary significantly based on the type of property you’re interested in.
2. Engage a Real Estate Agent
You can search for a suitable property yourself or work with licensed and reputable real estate agents familiar with the Ikoyi market to help identify suitable properties and negotiate terms. The agent will take the time to understand your specific requirements, including your budget, preferred location, and the type of property you’re looking for.
Using their expertise and access to the market, they will identify properties that align with your needs and preferences. This saves you time and resources. If you need help getting a reputable real estate agent, kindly consult a real estate lawyer for assistance.
3. Conduct Physical Inspection
Once you have identified a property of interest, the next crucial step is to conduct a physical inspection. This can be done personally, through a trusted family member, or with the assistance of a property lawyer. We recommend a physical inspection to uncover any visible defects that might affect your buying decision.
Additionally, it helps identify potential disputes surrounding the property, such as legal warnings or ownership conflicts, that could pose challenges to the purchase. The inspection also confirms whether the property is vacant and ready for possession, ensuring you are fully informed before proceeding.
4. Conduct Due Diligence
After completing a physical inspection, the next is to verify the property’s title or investigate its ownership, especially if the property does not have a registered title at the time of sale. In Lagos, many properties lack registered titles, while others are pending title registration.
Note that the absence of a registered title does not necessarily mean the property is unsuitable for purchase. However, it is important to conduct thorough investigations into the property’s root title at the Land Registry. This process helps determine whether the seller has the legal right to sell the property and can transfer ownership without encumbrances like mortgages, litigation, or government acquisition.
We advise that you also confirm the property’s zoning to avoid purchasing residential land in a commercial zone or vice versa. All this due diligence can be carried out by engaging a property lawyer to oversee the process on your behalf.
5. Negotiate and Agree on Terms
Once you have chosen a property, make a formal offer that reflects your budget and the property’s market value. Negotiate the price and terms, including payment schedules, inclusions, or necessary repairs. Ensure all agreements are documented in a formal offer letter or memorandum to avoid misunderstandings. Working with an estate agent and property lawyer can help streamline the process and secure a fair deal.
6. Prepare and Sign the Contract of Sale
Once you are ready to proceed, a Contract of Sale is prepared by a reputable property lawyer, outlining the terms of the property purchase. This is particularly important if the buyer is paying in installments, as it prevents the seller from reselling the property during the payment period and may include the seller’s obligations, like assisting with registration. The contract should be signed when the full price or first installment is paid. If the full price is paid upfront and all seller obligations are completed, the contract may not be needed.
7. Prepare a Deed of Assignment
Once you have fully paid for the property, or are ready to make the full payment, the next step is to prepare and sign a Deed of Assignment. Again, this document should be prepared by a reputable and experienced property lawyer.
In this document, the seller will be referred to as the Assignor, and the buyer as the Assignee. The Deed of Assignment serves to permanently transfer ownership of the property from the seller to the buyer, subject to the governor’s consent. At this point, the transaction is considered complete.
Do I Need a Lawyer When Buying a House in Ikoyi?
Yes, you need a lawyer when buying a house in Ikoyi, or any other part of Lagos. Real estate transactions in Nigeria can be complex, and having a lawyer by your side will ensure that the process goes smoothly and your interests are protected. Here are reasons why you need legal representation:
- Your lawyer will help you verify that the property seller is the rightful owner and that the property is free of legal disputes or encumbrances like unpaid land charges, mortgages, or legal battles.
- If there are any aspects of the deal that need negotiation like the price, repairs, or adjustments to the contract, a lawyer can represent your interests and ensure you get a fair deal.
- A lawyer will help you draft or review the binding sales agreement to ensure that all terms are fair and clearly outlined.
- A property lawyer will help ensure compliance with Lagos State Land Use Charge regulations. They will assist you with stamp duties, registration of property, taxes, and transfer of ownership with the Lagos State Government.
- Once you make a payment, you need to ensure the title deed and documents are transferred in your name and submitted to the relevant government authorities like the Land Registry.
- In the event of disputes during or after the transaction such as disagreements over the terms of the sale or ownership, a lawyer will help mediate or represent you in court if needed.
Common Mistakes to Avoid When Buying a Property in Lagos
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Neglecting Due Diligence
One of the biggest mistakes a buyer can make is failing to conduct proper due diligence. This includes verifying the property’s title, ensuring the ownership is legitimate, and checking for any encumbrances or legal disputes. In Lagos, where property titles can be complex, overlooking this step could lead to costly legal battles or even the loss of the property. Always confirm that the seller has the right to sell and that the property is free from any legal claims.
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Overlooking Hidden Costs
While it’s easy to focus on the purchase price of a property, many buyers overlook additional costs that can significantly affect the total cost of acquisition. These include legal fees, agency fees, taxes, land transfer fees, and registration costs. Buyers may also incur costs related to property inspection and surveyor fees. Failing to budget for these expenses can lead to financial strain or unexpected delays in completing the transaction.
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Rushing the Process
In the excitement of acquiring a new property, many buyers rush through the process, making quick decisions without conducting proper research or inspections. This can lead to overlooking critical issues such as structural problems, zoning violations, or even title disputes. It is important to take the time to thoroughly inspect the property, review all documents, and consult with professionals to ensure you are making an informed decision.
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Not Seeking Professional Advice
Skipping the advice of professionals such as real estate agents, lawyers, or surveyors can be a costly mistake. A real estate agent can help you find the right property and guide you through negotiations, while a lawyer ensures all contracts and documents are in order. A surveyor can check the property’s condition and confirm its boundaries. Without expert guidance, you risk missing important details or falling victim to fraud.
Conclusion
Buying property in Ikoyi is an investment that requires careful planning and due diligence. By understanding the market, engaging professionals, and following the outlined steps, you can secure a property that meets your needs and offers long-term value. Therefore, if you are ready to secure a property in Lagos, kindly reach out to Resolution Law Firm to speak with our team of property lawyers. We will protect your best interest and help you buy the property of your dreams.
