The real estate industry in Nigeria presents a lucrative opportunity, and many Nigerians in the diaspora are capitalising on it effectively. While some successfully generate significant returns from real estate investments due to their expertise, others face challenges, including fraud perpetrated by land scammers, family members, or friends.

Indeed, investing in real estate in Nigeria carries inherent risks and demands considerable expertise and courage. With the right knowledge, however, it is possible to achieve substantial financial gains regardless of your location. Conversely, a lack of understanding can lead to severe financial losses. Therefore, it is crucial to proceed with caution and seek advice from real estate professionals.

Although real estate investment in Nigeria is risky, especially if you are unable to oversee the purchasing process personally, it remains a viable and achievable venture. Many investors successfully navigate this field and avoid falling prey to real estate fraudsters.

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Advancements in technology have facilitated global transactions, making it possible to legally purchase real estate properties in Nigeria from anywhere in the world without a physical presence. To ensure success in this endeavor, adhering to specific guidelines is essential.

In this article, we will be taking a look at five steps on how people overseas can buy properties in Nigeria.

Location

The first point to consider before purchasing land or property in Nigeria is the location. I strongly advise potential clients to avoid buying land in villages unless they are natives of that area. Generally, it’s wiser to invest in land located in towns.

When evaluating a location for land purchase, there are several important questions to ask yourself.

• What will you use the land for?
• Is the area designated for residential or commercial purposes?
• Are you planning to build for rental income or for personal residence?
• Is it a suitable environment for raising children?
• What is the proximity of the land to your place of work or business?
• What is the state of the road network in the area?
• Areas with good road networks tend to develop more rapidly.

Consider also the ease of moving from a rural to an urban area. Unlike in the U.S., where even rural areas often have access to modern facilities, many rural areas in Nigeria may lack the hospitals and schools you might need. Thus, location is extremely important.

Think about how the area will develop over the next four to five years. By the time your construction is complete, will the area be suitable for your family? In Nigeria, people often buy undeveloped land and build from scratch. The mortgage system is structured to allow payments over a long period, but it’s still crucial to consider the future of the area.

Avoid buying property in locations with frequent security issues, such as crime or kidnapping, especially if there are no nearby police stations.

While properties in highly developed areas like VGC, Lekki, or Victoria Island can be expensive, you don’t need to focus on these high-end locations if your budget doesn’t allow it. Instead, find a place where you’ll be comfortable living and raising a family. Remember, location is key.

Budget

Purchasing land involves more expenses than just the cost of the land itself. When you buy land, you must also account for several additional costs. For instance, if an agent facilitates the transaction, you will need to pay an agency fee. Other expenses include legal fees, survey plans, local government fees, urban and rural planning fees, and various informal costs.

In Nigeria, there is also a customary expense known as “homage.” This involves making a payment or settlement to the original descendants or owners of the land. This practice must be factored into your budget.

If your budget for purchasing land is 4 million naira, it is important not to spend the entire amount solely on the land. You should avoid depleting your finances to the point where you have no funds left for additional costs such as securing and fencing the land, or even for personal sustenance. Doing so could lead to financial strain and force you to sell the land to recover your finances.

To prevent this, if you have a total budget of 4 million naira for land acquisition, consider purchasing land that costs approximately 2.5 million naira. This will leave you with 1.5 million naira in reserve to cover the additional expenses associated with the purchase.

Search Verification

The third step in purchasing land involves conducting a thorough search and verification. This process can be approached from two perspectives: the progressive or modern method and the traditional or conventional method. Both approaches are crucial.

Clients and prospective buyers are advised not to let the allure of affordable land compromise their commitment to due diligence. It is essential to ensure that the property does not become a source of trouble. Conducting due diligence entails verifying several key factors: Is the seller the original and rightful owner? Does the seller have the legal authority to dispose of the property? Is the land encumbered in any way?

By “encumbered,” It is better if the land has been used as collateral for a loan. It is possible to secure a bank loan using land as security. Therefore, it is crucial to determine whether the land is pledged as collateral or subject to any family disputes. For instance, if a concubine has three sons and two families are contesting the land, purchasing it might lead to unforeseen complications.

Additionally, it is important to establish whether the land is involved in any litigation. Some individuals may attempt to sell land that is currently the subject of a legal dispute, thereby putting the unsuspecting buyer in a precarious situation. Peace of mind cannot be guaranteed in such scenarios, making it imperative to conduct a thorough search.

It is strongly recommended that you enlist the services of a lawyer. Cost-cutting measures should not come at the expense of your peace of mind. The expenses you avoid now may eventually multiply if issues arise with the land. A lawyer can perform a search at the land registry and the Corporate Affairs Commission (CAC) to verify the property’s status.

Moreover, it is advisable to personally visit the site as part of a traditional search method. This does not necessarily require legal assistance. I advise potential buyers to discreetly visit the area and inquire about the property.

Purchasing land is akin to marriage; making the wrong choice can lead to lifelong difficulties. Similar to the “Egyptian” inquiry conducted by the Igbo community when considering a marriage, due diligence is vital when acquiring land. Engage with the community, ask about the seller, and gather information about their family and reputation. Is the seller known to be troublesome or hostile to outsiders? Some indigenous individuals may sell land to outsiders while still believing they retain rights to it, causing ongoing issues for the buyer.

It is essential to communicate in the local dialect or vernacular when making inquiries. Ensure there are no ongoing disputes over the land. Occasionally, land that is not genuinely for sale might be fraudulently offered, leading to significant problems. Therefore, it is crucial to investigate the seller’s background, family history, and reputation. Some individuals are notorious for selling the same piece of land to multiple buyers.

Payments Documentation

The fourth critical aspect to consider before purchasing land in Nigeria is the matter of payments and documentation. It is well understood that the court’s language is solely that of evidence and documentation.

The primary rule for payments and documentation is this: avoid making payments in cash. When purchasing land, it is advisable to use methods such as wire transfers, in-bank fund transfers, or mobile app transactions. These methods provide documentation that can be referenced in the event of any disputes.

In land and property transactions, there is no such thing as excessive documentation. Every piece of documentation is important, and being thorough or cautious is always acceptable. This is because land disputes can turn close relationships into adversarial ones, causing conflicts among family members and spouses. Therefore, approach the transaction with the mindset that you are purchasing from an adversary.

To further safeguard the transaction, consider having a lawyer draft a purchase receipt. This document should be signed by both the buyer and the seller. Relying solely on transfer evidence can be risky, as the seller might later claim the payment was for a different purpose and not for the land.

A lawyer can draft a detailed purchase receipt that clearly states the land was successfully sold from the seller to the buyer on a specific date for a specified amount. This type of receipt is standard practice in legal transactions. After making the payment, ensure that every aspect of the transaction is thoroughly documented.

Registration

The last crucial step in purchasing land is to ensure full registration. This involves updating all previous documents to reflect you as the new owner. This is essential for several reasons, but primarily to prevent the previous owner, if unscrupulous, from posing as the owner and attempting to sell the land to a third party. If someone else conducts a search, they might still find the previous owner listed as the proprietor in the land registry.

Therefore, if the land is already registered, make sure the ownership is transferred to your name. Alongside registration, it is important to request the original title documents. Many people overlook or are unaware of the importance of these details in land purchases.

Once the title has been transferred, it is crucial to retrieve all original documents from the former owner, including the original deed of assignment, survey plan, certificate of occupancy (C of O), and any other relevant documentation. The previous owner should not retain custody of these documents, as possession of the originals could enable them to pass a valid title to another party. Ideally, this should be done even before making payments. When conducting a search, you can request photocopies of the documents to verify their authenticity at the land registry.

However, once you have decided to proceed with the purchase, ensure that the original documents are handed over to you or your representative, such as a lawyer, at the time of payment. If you are residing abroad, it is essential not to overlook any detail. Purchasing property without obtaining the original documents is akin to attending university without receiving a degree. Just as a degree serves as proof of education, original title documents are the only evidence that you are the rightful owner of the land.

Do not proceed with payments if the previous owner claims the documents are unavailable but will provide them later; this is a significant red flag. Make payments only when you have possession of the original title documents.

After completing the payment and securing the original documents, the next vital step is to protect and monitor your property. Leaving it unsecured exposes it to potential intrusions and other claims.

As mentioned earlier, it is wise to budget for fencing the land. If your finances permit, erect a high, sturdy fence with a secure gate. Padlock the gate, but do not stop there; ensure regular monitoring of the property.

Land disputes can be quite problematic, and you do not want to experience them. Even with all the documents, legal battles can be protracted. The Nigerian legal system can be slow, with cases lasting 15–20 years and spanning multiple courts. During a dispute, a court may place an injunction on the land, preventing any development until a judgment is reached. Avoid such hassles by being vigilant.

If you are not residing in the country, consider hiring a relative or an estate management company to oversee the property. They should visit monthly to clear the grass, inspect the area, and establish your presence.

Do not purchase property only to leave it unattended. Failure to monitor it could lead to losing it, even with proper documentation. Land disputes can involve underhanded tactics, so it is better to be proactive. Secure your property by fencing it, locking it, and regularly visiting it to ensure there is no encroachment. Clearly mark the fence with signs indicating that the land is not for sale, and use any other necessary measures to prevent encroachment.

Conclusion

Remember, Nigeria is peculiar, and wisdom involves adapting to the peculiarities of your environment. It is not comparable to the UK or the US. Be aware of your surroundings, as land disputes can escalate to severe consequences. Adhering to these steps is imperative for safeguarding your investment.