10 Ways You Can Save Money When Buying A Property
While the landscape of major cities in the country is flagged with luxurious buildings, affordable housing has over the years been out of the reach of most Nigerians.
Here are some useful facts about housing in Nigeria:
· As at 2011, only 37 percent of Nigerians were homeowners.
· A 2012 estimate shows that the nation’s Federal Mortgage Bank was able to provide mortgage loans to only 12,000 of the almost 4 million contributors who qualified under its National Housing fund scheme.
A set of reinforcing factors is responsible for this observed phenomenon. To begin with, the acute shortage of supply is responsible for the soaring prices of housing units in the country and the major factors responsible for this shortage include high construction costs, high cost of registering a property, and the inaccessibility of mortgage finance.
Against this backdrop, a buyer in the Nigerian property market needs to be armed with adequate information on the strategies for securing a property at the lowest possible price.
Here are 10 strategies you can adopt to secure your desired properties for the best deals whether you are buying for private/commercial use or as an investment.
1. Have a budget
Having a budget will help you bargain effectively. This is because it will serve as a constraint to your desire to secure the best property available. Serving as a guide, your budget will prevent you from having future regrets of spending beyond what you could afford given your current income.
2. Carry out a cost-benefit analysis
In addition, carrying out an analysis of the benefits and associated cost of securing a property will help you in bargaining effectively. If the benefits to be derived from purchasing a property are not commensurate with the cost to be incurred, then you can bargain for a price cut with the seller or decide to search for a better deal.
3. Carry out an independent valuation of the property
Employ the services of an independent property valuer to help in valuing the property. This will help you negotiate better for a price reduction with the seller as the independent valuation will reveal the true state of the property.
4. Leverage online property listing websites
There is a number of property listing website in the country today that you can leverage to access information on various types of properties across the nation. By comparing relative prices of properties listed on these platforms, you can secure the best deal without having to go through the usual time and cost consuming requirements of searching for a property in the market. However, it is important you still allow your agent close the deal on your behalf.
5. Get information on the average prices of properties in the neighborhood
This will be helpful if the property is located in a closed or highly regulated market like an estate. Being armed with information on the average prices of properties in an area will help you bargain a good price for your property.
6. Transact directly with a registered and experienced agent
A registered real estate agent with a wealth of experience in the industry will be able to secure the best of deals on your behalf. Such an individual usually has a well-connected network of agents across the nation. Also, transacting through a registered agent will prevent you from incurring extra fees as a result of your ignorance of the property laws in the country.
7. Cut out as many middle men as possible
The presence of too many middlemen in real estate transactions is known to escalate the selling prices of properties. As much as you can, try to bypass as many middlemen when buying properties. For instance, you might not have to transact through an agent if you have a lawyer well experienced in the property market. By adopting this approach, you would have avoided the fees charged by real estate agents which could be as high as 10 percent of the property’s selling price.
8. Don’t be too quick to reveal your net worth or income status
The value of properties can skyrocket when sellers have a wrong perception of your net worth or income status, either from your conversations or from the brand of car you drive. If you will be involved in the negotiation process, learn to appear in a modest manner and don’t be too quick to reveal your income and net worth status.
9. Approach family and friend first
You might be able to secure a property for below its normal selling price if you let family and friends know about your intentions. They might either have a property for sale or have useful information on how to get one.
10. Your purpose for buying the property
Location has an important role to play in the purpose for which a property is bought. A property can be bought for 2 major reasons: for personal /business use or as an investment. If the latter is your goal, then you should be willing to consider buying a property in an area that is just beginning to develop (in terms of availability of basic amenities and infrastructures) but with great prospects for future expansion. This might not be a preferred location for a private residence or business location, but you will be able to purchase properties for investment purposes at cheaper prices in such a location.