Steps to Buying a Property

Shelter is one of the basic needs of man. Therefore, every individual must be accommodated in one property or the other during his / her lifetime.

A lot of individuals may go through life without buying a property but it is a rather fulfilling and stabilizing experience. Purchasing a property is a major landmark in the course of ones life and is probably the largest single expenditure that will be made.

Contrary to a lot of the stories and tales that are bandied about, vis-a-vis the dangers of buying a property and the chances of falling into the hands of fraudsters, purchasing real estate could actually be an interesting experience.

This is of course taking cognizance of the right steps and processes and the use of qualified and experienced professionals. Experience has shown that numerous prospects shy away from the use of professionals because of the fear of paying professional fees. However a word of caution is that one must always bear in mind the value that is brought into transactions by these individuals and also the fact that the fees are always a minute percentage of the purchase price of a property. Added to this is the risk of a prospective purchaser falling into the hands of fraudsters.

The following steps will as much as possible highlight the various processes, checks and balances that could be followed to conclude the purchase of a property.

These steps do not necessarily have to be taken in this order and can be interchanged now and again depending on the buyer, the seller and the property being transacted upon.

As much as possible the word property will be loosely used to refer to both bare land, and land with buildings.

The focus of the write-up will be on residential property acquisition.

A. THE SECOND DECISION

Once the decision has been made to buy a property, the second decision will be that of whether to purchase bare land, or an already built property. This decision of course is strictly a personal one and will more or less depend on several factors most particularly the quantum of finances available for the purchase. Where a prospective purchaser has access to mortgage facilities or large savings the choice could be to acquire an already built property, otherwise, the option would be to buy a plot of land and develop same gradually.

It is at this point, that it is most advisable to consult a reputable estate agent or valuer for professional opinion, advise and subsequent guidance through the duration of the transaction.

B. LOCATION

The hard fact about the desired location in which to purchase a property is that it will more often than not be a function of the finances available. Real estate prices in Lagos for example range from as low as N750,000.00 in the suburbs to as high as N400,000,000.00 in the neighbourhoods of Ikoyi and Victoria Island.

As soon as a personal compromise can be reached between the finance available and the location desired, then the next step can be taken.

C. TYPE OF PROPERTY

As earlier stated our focus, is on residential property acquisition. The various types of built up properties that can be purchased include, bungalows, detached houses, duplexes or a wing of duplex, a block of flats 2, 4, 6, 8 etc.

Again, the decision here will rest with you the prospective purchaser and your ultimate objective. Several extraneous factors will come into play, including, family size (present and future), finances, and possibly the need for even the property to generate some income. In this case the decision may be to buy a block of flats, or 2 wings of duplex where you can occupy one unit and lease out the other(s).

D. INSPECTION

Once the location and the type of property have been agreed upon, your estate agent will then be able to introduce a number of properties that may meet your particular needs vis-à-vis the foregoing.

You are then ready for the next stage, inspecting or viewing of the properties.

This is usually one of the most interesting aspects of buying a house. Whilst going for any property inspection it is important to have a checklist in order of priorities of the various objectives that the property must meet. The truth is that invariably no property will meet these needs 100%, but with a little compromise here and there, you will be able to decide whether a particular property satisfies your immediate requirements.

As an estate surveyor and valuer, the author, has conducted over 2000 property inspections. Clients have to be regularly tutored that the only satisfactory property is one which has designed and constructed by themselves.

During the inspection stage it is important to examine as much as possible every part of the house. Don’t be afraid to ask as many questions as possible, on issues or areas of the property that you need further clarification about. Check for possibilities of external flooding and water lines at the base of the walls. Also check for uneven settlement (sinking) structural defects etc. It may sometimes be necessary to bring in a structural engineer where there is some doubt about the stability of the property.

At the inspection stage, it is also important to find out discreetly who your neighbours are. This can be done by asking questions, but most critical, it is advisable that the property is revisited about 2-3 times at different hours of the day, and possibly on different days to get a feel of the neighbourhood.

An inspection conducted at 10.00 a.m on a working day or 4.00 p.m. on a lazy Sunday evening may present a peaceful, serene and quiet neighbourhood.

But at 8.00 p.m. at night, the same neighbourhood directly opposite your intended purchase, could be host to a noisy street bar that opens from 7.00 pm to 4.00 am daily.

The neighbourhood may be the venue of a night street market that makes it impossible for you to gain vehicular access to the property until 12.00 midnight from Mondays to Saturdays. Or, you may even have a Church or Mosque as your neighbour.

Would you and your family want to and be able to tolerate these?

Inspect and be comfortable with access roads to the proposed property. The location of the markets, schools, shops etc will also be important. The level of security that the neighbourhood provides is also very critical and this you may want to ascertain

There will obviously be numerous other factors that may influence your decisions upon inspection of the property but these will be more of a personal nature.

E. DOCUMENTATION

Once you are satisfied with a particular property and the decision is made to proceed with the purchase, the estate agent can then be asked to offer same formally stating clearly the terms and conditions of the sale.

Possibly to be included in the letter of offer will be photocopies of the title documents. At this point you as the purchaser, can make a counter offer, and negotiations can proceed for a while until an acceptable sale price is reached by all the parties involved i.e. the vendor, the estate agent and you the purchaser.

As soon as the sale price is agreed upon a lawyer, should be called in to handle the legal search at the Land Registry. This search will reveal whether there are any encumbrances on the property by way of mortgages etc.

In a number of cases, purchasers may come across properties without registered titles. Or a situation where the title is vested in a family or family members. With such cases, extra caution has to be taken as this would involve discussions with the head of the family and a number of the other family members, to find out their disposition to the sale, its genuineness or otherwise.

A formal investigation can also be carried out at the survey office. With the issuance of a purchase receipt from the family, a Certificate of Occupancy can be processed between the Lands Department and the Ministry of Justice, of most State Governments.

At the search stage, it is also important to confirm that the property is not owing tenement rates, ground rent, water and electricity bills. These could sometimes add up to a tidy sum especially for developed properties.

Once the search is satisfactory, the estate agent can then be instructed to schedule a date for completion of the transaction, where contracts will be exchanged. The lawyer will also be instructed to prepare the necessary transfer papers for signing by the two parties to the transaction.

A draft copy of these transfer papers should be sent to the vendor and his lawyers for their perusal and comments / observations well ahead of the conclusion date.

Where the property to be purchased is tenanted as in most cases, it is important that the tenancy positions of the occupants are examined and straightened out. This may not always be easy but it is best tackled at this stage of the transaction to avoid long and frustrating litigations – post purchase.

F. CONCLUDING THE PURCHASE

In concluding the transaction on the set date, the various transfer documents will be signed by both parties and the vendor must hand over the original copy of the documents to you as the purchaser, whilst you hand over the financial instruments of purchase usually a bank certified cheque.

Your lawyer, should ensure that all necessary documents required for you as the new owner to effect change of title to your name must be signed and handed over. Those that are not immediately available can be collected at a mutually agreed future date.

In some cases, the property under transaction maybe a mortgaged one in which case, the documents are likely to be domiciled with a financial institution.

In a situation such as this, the bank may request that the mortgaged sum is paid off before signing the necessary Deed of Release and also handing over the original documents. Where these various angles are introduced in a transaction your consultants/professionals will be in a better position to advise and guide you.

Upon conclusion of the purchase, it is important that the process of transferring the title to your name commences immediately and this is the process of obtaining the Governors Consent to the sale.

If it is a bare land that has been purchased, fencing of the site should commence almost immediately to indicate that some change has occurred in the status of the land.

Whilst the foregoing out-lines the basic steps to be taken to ensure a smooth purchase of a property, it may not be exhaustive, because each real estate transaction comes with its own peculiarities.

In some cases it maybe necessary to even meet with the vendor, sight the original documents, etc before reaching the concluding stage.

In other instances it will be important to confirm that the property is not under acquisition by the government and also will not be affected by a road widening exercise.

In the final analysis, it is important to reiterate that the above steps should act purely as a guide but the most advice should be taken from the consultants, mainly your estate agents and your lawyer.

By: Chudi Ubosi