Investing in an off-plan property—one that’s still under construction—can be a smart move, especially in a thriving market like Lagos. Buyers often get the advantage of lower prices, flexible payment plans, and the chance to customize certain aspects of their future home.
However, off-plan purchases come with their own risks and challenges, and it’s important to be aware of the pitfalls to avoid potential losses. Whether you’re buying your first home or adding to your real estate portfolio, understanding these common mistakes can help safeguard your investment.
In this post, we explore five critical mistakes to avoid when buying off-plan properties in Lagos, ensuring that your journey to homeownership is smooth and rewarding.
1. Failing to Research the Developer
One of the biggest mistakes buyers make is not thoroughly researching the property developer. The Lagos real estate market is filled with both reputable and less-reliable developers. Entrusting your hard-earned money to a developer who lacks experience or credibility can lead to serious issues down the road.
Why It’s Important:
A credible developer with a solid track record is more likely to deliver your property on time and with the quality promised. If a developer has a history of delayed projects, poor construction quality, or abandoned developments, you could face severe financial losses and unnecessary stress.
How to Avoid It:
- Check the developer’s portfolio: Look at their completed projects to assess their quality.
- Read reviews and testimonials: What do past clients say? Were there any major issues during construction?
- Verify financial stability: A financially stable developer is less likely to run into problems that can cause project delays.
Choosing a developer with a good reputation and proven experience is one of the best ways to ensure a smooth off-plan purchase.
2. Not Understanding the Payment Structure
One of the attractions of buying off-plan is the flexible payment structure. However, some buyers fail to fully understand the payment schedules, fees, and total costs involved, which can lead to financial strain or missed payments.
Why It’s Important:
Some developers offer interest-free payment plans, while others may charge extra fees for late payments or add hidden costs throughout the construction phase. Without a clear understanding of the payment structure, you might find yourself facing unexpected costs or penalties.
How to Avoid It:
- Get a breakdown of all costs upfront: Ensure that all fees, including development fees, service charges, and registration costs, are disclosed before you sign the contract.
- Understand the timeline: Know exactly when each payment is due and plan your finances accordingly.
- Ask about penalties: Are there fees for late payments or changes to the payment plan?
By having a clear understanding of the payment structure, you’ll be better equipped to budget and manage your finances throughout the construction process.
3. Overlooking the Legal Aspects
Many off-plan property buyers get so excited about the project that they overlook the legal requirements. However, neglecting this crucial aspect can have disastrous consequences, including losing your deposit or encountering problems with property ownership after construction.
Why It’s Important:
Before you commit to any off-plan property purchase, you must ensure that all legal documents are in place. This includes verifying that the developer has the necessary approvals and that the land on which the property is being built has a clean title. In Lagos, there are frequent issues with land disputes, and without proper legal protections, you could lose your investment.
How to Avoid It:
- Engage a property lawyer: A lawyer specializing in Lagos real estate can help you review all legal documents and ensure that everything is in order.
- Check land titles: Make sure the land is free of disputes or government acquisition and that the developer has the right to build on it.
- Get a clear contract: Ensure that the contract covers the scope of the project, payment terms, delivery date, and penalties for delays or changes in specifications.
Never sign any agreement without proper legal advice, no matter how reputable the developer may seem. Taking these legal precautions can save you a lot of headaches down the road.
4. Ignoring the Details in the Building Specifications
Many buyers focus on the location and price of the property but fail to pay attention to the finer details of the building specifications. The quality of materials, finishes, and fittings can significantly impact the final value of your property, so it’s important to clarify these details upfront.
Why It’s Important:
The final product delivered by the developer may differ from what was initially promised. Some developers may cut corners, using cheaper materials or altering design plans without informing the buyer. This can lead to dissatisfaction with your investment and, in some cases, additional renovation costs.
How to Avoid It:
- Request a detailed specification list: Ensure the contract includes specifics about materials, finishes, fixtures, and fittings that will be used.
- Visit a show apartment or completed projects: This gives you a clearer idea of the developer’s typical quality of work.
- Ask for regular updates: Stay in communication with the developer during construction to ensure everything is proceeding according to plan.
Understanding the building specifications ensures that what you expect is what you get when the property is finally handed over.
5. Not Planning for Delays
Off-plan properties are almost always subject to construction delays, and failing to prepare for this can be a costly mistake. While developers may provide an estimated completion date, various factors like weather, labor shortages, or regulatory hurdles can cause unexpected delays.
Why It’s Important:
Delays can affect your financial planning, especially if you’re relying on the property as an investment or a home to move into. Extended delays can also increase costs, such as renting temporary accommodation or storage for your belongings.
How to Avoid It:
- Account for delays in your budget: Prepare a contingency fund to cover any unexpected costs that may arise from delays.
- Get penalty clauses in the contract: Ensure the contract has a clear clause outlining penalties for delays beyond a certain period.
- Stay updated on progress: Regularly check in with the developer and visit the site to stay informed on construction progress.
As always, consult with a real estate professional and legal expert before committing to an off-plan purchase, and take the time to thoroughly research all aspects of the deal. By avoiding these common mistakes, you can confidently move forward with your real estate investment in Lagos.
By factoring in the possibility of delays, you’ll be better prepared to manage any inconveniences and additional costs.
Conclusion
Buying off-plan properties in Lagos can be a lucrative investment opportunity, especially in prime areas like Lekki. However, it’s essential to approach the process with caution to avoid the common pitfalls. From researching the developer to understanding legal requirements and planning for potential delays, these five mistakes are crucial to avoid for a successful investment.
At Dozek Group, we prioritize transparency and customer satisfaction, offering flexible and transparent installment payment options with no hidden fees for serious buyers. Whether you’re a first-time homebuyer or an experienced investor, working with a reputable developer like Dozek ensures that your off-plan purchase will be smooth, secure, and rewarding.
