Hallelujah! So YOU have bought your dream mansion in Nigeria, Lekki, Ikeja, Ikoyi, VGC etc.. You are ecstatic, over the moon with jubilation. Everyone’s dream is to own there own home. First question we ask as an agent is – Is it a Cash Buy, where you get the keys instantly stress free or an OFF-PLAN development, which gets delivered 12 to 48 months after initial payment(on all spread payment plans).
Mr Ola Alabi speaking from his Lagos office said ‘lately we have had a steady stream of potential buyers, who use Agents to do their property leg work, finding their dream homes, sending them brochures, price lists, physical visitation of site, negotiation on offer, bombardment of calls day and night, only to pull out and approach developer direct to buy their property.
Mr Alabi said the buyer always has a choice to use an agent or not when buying a property but ‘it is ALWAYS’ a ‘must’ if you are buying an ‘off the plan’ development especially in Nigeria when you are based abroad.
We came across this great article by Nigeria Property Observer about buying properties ‘off the plan’, or simply purchasing a property before it’s completed. Buying off the plan has many advantages which includes access to properties that could be sold out by completion, customisation options, and the chance of capital gain prior to completion, with minimal initial outlay.
However, there are also many risks of buying prior to completion individually without an Agent or living abroad. Below are Five major reasons when buying off the plan, why YOU MUST have an agent MERCYHOMESUK for a nominal Consultancy fee of £100
It always good to spend an extra more and be secure, than play smart and become the loser of all, when the developer doesn’t deliver..MERCYHOMESUK
AGENT ALWAYS MAKES SURE THE DEVELOPER HAS A GOOD REPUTATION
We Research the background of the developer and its track record. Have there been court actions against the developer? Does it have a history of delivering what has been promised and settling disputes quickly and neatly?
“Banks are strict on who they lend to. Banks also look for a good track record before handing over construction finance,” says Mr Banjoko of Alemo developments
We Do not judge a developer solely by its website, adverts or its salespersons .
We visit the property site and check the location. You may find other construction in the area, which may affect your view. We also carefully inspect the display home, models and plans as well as the fixtures and fittings.
DUE DILIGENCE ON BEHALF OF OUR CLIENTS
Nothing can be more important than ensuring that the correct research and checks have been conducted and that you are going into the purchase with your eyes wide open. First, it is absolutely essential to understand the buying process, precisely what funds are required and when you will need them. This will allow you to make an accurate cashflow analysis. It should cover investment and risk.
High potential returns often equal greater risk, and vice versa. We Take the time to identify the potential risk in late delivery or non delivery.
When we plan to buy off the plan development, we familiarise our self with the laws and taxes of that state. We represent legally all options for you by viewing on ground through Lagos Office that location is physically since there could be any number of factories or other developments nearby that could impact your decision.
BUYERS BIGGEST RISK,AGENTS DON’T UNDERESTIMATE THE RISKS
One of the biggest risks is that a developer or builder will go under before completion or that a project will fail to get off the ground, but this should result in no financial loss for the buyer. When you pay your 10% deposit to secure your property it is held in trust either by the selling agent or vendor’s solicitor. If the developer is unable to go ahead for whatever reason buyers MIGHT NOT get their money back!.
Another big issue is often the final product Gbenga says the best way to protect yourself from a nasty shock is to check every detail on the sale contract, particularly regarding the finishes. “Most disputes arise from a buyer not being happy with the end product. The best way to avoid this is to be aware of exactly what all of the finishes should be,” MERCYHOMESUK says.
“You should look at the schedule of finishes for all parts of the property, including floor coverings, colour schemes and kitchen appliances. Know everything about the interior, down to how many power points there will be in every room. All of this can be negotiated before exchange of contracts and should be included specifically in the contract if you want to be able to enforce performance against the vendor. If a contract is skinny on detail, there may be little room for complain at the end of the day,” she says.
Timing of delivery can also be an issue for buyers of property off the plan. “Developers do need flexibility in the sale contract so they can ensure successful delivery of the apartments, and there are many situations that may cause the delivery date to be extended, such as wet weather.
“Become familiar with what is on the contract that will allow the ‘sunset’ completion date to be moved. Leave no room for surprises. If you do not understand the contract, take it to a conveyancer and have them read it and explain it to you. Do not cut costs, because with buying off the plan you cannot see exactly what you are signing up for,” Ola of MERCYHOMESUK says.
These detailed and clear warnings on the contract highlight the risks that are taken when buying off the plan.
When it comes to signing the contract you should be completely satisfied with all terms. If you are not satisfied by certain clauses, you should ask to have them amended, though the developer may refuse. The bottom line is that if you are not happy with the contract, you should seek legal advice. If the developer adopts a “take it or leave it” approach, your best bet may be to leave it.
AGENTS ARE AWARE THAT YOU CANNOT EASILY GET OUT OF A CONTRACT
A contract to purchase an apartment off the plan is a legally binding document.
Generally, if you don’t proceed with the contract you will lose your deposit and may be pursued by the developer for the balance of payment or for any shortfall should the property be resold at a lower price.
Changes in personal circumstances such as divorce, unemployment, illness or death of a partner are not grounds for legally cancelling an off the plan contract.
You can generally only cancel a contract if the terms and conditions have not been met by the developer or builder.
These may include conditions set out in a “sunset clause”, which usually pertains to a period of time in which the project must be completed and settlement should occur. You may also be able to cancel a contract if the builder has not registered the plans for the development by a set date in the contract.
Buyers’ agent Angel Falese says off the plan contracts are “incredibly onerous to the purchaser” and urges buyers to ensure they have contracts explained to them by a qualified solicitor or hand over to their Agents to fine comb the contract on their behalf..
AGENTS DO ALL FOLLOW UPS TILL PROPERTY IS ACTUALLY DELIVERED AND ACTS AS REPRESENTATIVE AND LIAISON ON GROUND FOR CLIENT IF THEY ARE BASED ABROAD.
- Assisting you or representing your interest in negotiating the acquisition of your property.
- providing legal services for completing purchase, legal obligations and the Agreement you may enter into for such purpose of acquiring a lifetime investment opportunity.
- Following up all paperwork and money transfers where possible
- viewing property and acquiring closure on property deal till delivery.
Like a proverb says..It is not the beginning that matters, its the latter end!.
BE WISE, BE SMART, CHOOSE MERCYHOMESUK TO REPRESENT YOU