The satisfaction, comfort and freedom that come with owning a home are something that many Nigerians crave. There are two ways to go about achieving this goal: purchasing a house or building it from scratch. But beyond the price of the house itself, there are several costs associated with buying a home that can catch buyers by surprise.
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It’s important that you understand these costs, especially in a country such as ours, where housing transactions can be complicated by legal and infrastructural realities.
What’s the First Step in Buying a Home in Nigeria?
The first step in buying a home is not looking for a property. It’s conducting due diligence. Land ownership disputes, fake property documents, and multiple sales of the same house are common issues in our climate. So, before committing your money, you should do these things:
- Verify the property’s title at the Land Registry in the state where the property is located.
- Hire a trusted lawyer or real estate professional to confirm ownership and ensure that there are no encumbrances.
- Budget for extra costs beyond the purchase price, which we will explore in detail below.
Hidden Costs Associated with Buying a Home in Nigeria
When budgeting for a new home, it’s easy to focus only on the listing price. However, these hidden fees can add up significantly:
Legal Fees
If you want to safeguard your investment, hiring a lawyer is a step you shouldn’t avoid in most situations. Legal fees typically range from 5% to 10% of the property value, depending on the complexity of the deal.
Agency Fees
Most real estate agents in Nigeria charge 5%–10% commission for connecting buyers with sellers. Some agents may also require “inspection fees” for showing you properties.
Survey Plan
If the property does not already have a survey, you’ll need to commission one. And you’ll have to pay surveyors to get it done. This can cost between ₦100,000 and ₦500,000, depending on the location and size of the land.
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Governor’s Consent and Land Title Perfection
In parts of Nigeria, even if a seller transfers ownership, the buyer must secure the Governor’s Consent to formalise the transaction. The cost varies by state but can run into hundreds of thousands of naira. Additional fees for Certificate of Occupancy (C of O) or deed registration may also apply.
Stamp Duties and Taxes
Property transactions may attract stamp duties and other statutory charges. These differ across states but can add a significant percentage to your overall expenses.
Development Levies and Estate Fees
If you’re buying in a modern estate, developers could request infrastructure or service fees to cover roads, drainage, and electricity. These can be a lump sum or annual payments.
Renovation and Utility Setup
Older buildings will require some level of renovation, whether it’s painting, plumbing, wiring, or even borehole drilling and fixes. Other costs you might be confronted with include connecting to the public grid and water supply. Taken together, these may constitute substantial additions to the total cost of acquiring a home.
Is It Cheaper to Buy a Home or Build a Home in Nigeria?
This is one of the most common questions Nigerian homebuyers ask. The answer depends on several factors.
For example, buying a home is often faster and less stressful, but you’ll face high upfront costs, agency fees, and potential renovation expenses.
On the other hand, while building a home may seem cheaper because you can spread expenses, inflation in cement, iron rods, and labour costs may push budgets higher than expected.
In urban centres like Lagos and Abuja, building may be cheaper in the long run, especially if you already own land. However, in other cities with established estates, buying might be more convenient.
A lot also turns on who you’re buying from. A safe place to look for homes for sale is Connect Nigeria Real Estate. It’s an online platform that lists hundreds of houses for sale, from many parts of Nigeria. On the site, you’ll find descriptions and pictures of these houses, along with the contact details of sellers.
If you would like to have a look at the homes on sale at Connect Nigeria Real Estate, click HERE.
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Final Words
There’s a lot you need to weigh before buying a home in Nigeria.
The true cost of buying a home includes a host of hidden fees such as legal charges, agency commissions, taxes, and infrastructure levies. If you want to avoid surprises, you should always conduct proper due diligence. Also, engage professionals, and budget at least 10–20% extra beyond the purchase price.
When you know the costs associated with buying a home, you’ll avoid costly mistakes. And when asking yourself, “Is it cheaper to buy a home or build a home?” make sure you compare the hidden expenses against your long-term goals.
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