What Are the Hidden Costs of Home Ownership in Nigeria?
Owning that dream home is not all about buying a house, there are various other costs to think about when making this purchase of a lifetime.
Buying a new home can be even more expensive than you expect. There are lots of hidden costs that can add more than 10% to the total cost of buying a home, which you need to properly take into consideration and budget for.
Below are some of the top hidden costs of owning a home in Nigeria to help guide you in your purchase decision;
1. Agent Fees
Purchasing a home most often than none comes with hiring real estate agents who are charged with the responsibility of helping you find the best deals in terms of money, location and your preferred specifications. Searching for the property you desire by yourself is not impossible but it could be quite time-consuming so who better to negotiate well on your behalf than a skilful real estate agent?
However, an experienced and skilful real estate agent don’t provide their services for free so be prepared to pay the agreed commission to them for finding the perfect ad to closing the deal and signing the necessary documents.
Ensure you do due diligence before working with a real estate agent, so as not to fall victim to any kind of property scam
2. Service Charge
Depending on the type of property you want to purchase, you may be required to pay the service charge. The service charge is usually used for general property maintenance. Usually, this fee is charged every year and should be paid for the first time when you’re paying for your property. Depending on the location of your new house, its age, size and a considerable amount of other features, the service charge may sometimes turn out to be a whole lot of money.
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3. Moving Costs
One event that goes hand in hand with buying home is the Big Move! Whether you want to employ the services of a professional moving company or you simply want to do it yourself or with family and friends, there are going to be costs associated with whatever route you take. Ensure you do not forget to factor in these costs to your general budget.
ALSO READ: Advice for First Time Home Buyers in Nigeria
4. Legal Fees
The attorney’s fee should be paid separately from the agent fees. The two should not be taken as the same. Ensure you give pay both to your real estate agent and your legal attorney only after the deal is signed and you become the rightful owner of the property, as the deal can be cancelled due to several reasons, but if you’ve already paid the fees, there is little chance of you getting your money back.
Ensure your lawyer’s quote includes all related expenses and disbursements, not just legal fees and makes sure your interests are protected by discussing your Offer to Purchase with your lawyer or notary prior to signing.
Nowadays without paying the applicable taxes, it’s impossible to buy any type of real estate in Nigeria. Usually, these taxes include; property registration fees, personal income tax, amongst others. The amount of taxes levied on you largely depends on the location, the size and the kind of property you’re willing to buy.
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6. Redecorating costs
Although some new homes need no work done to them, others need some redecoration or some minor building works. Fixing it up yourself can cut costs, but most new homeowners spend far more than they expect on fixing up their new place. Again, how much you spend completely depends on how much work you are having done and the kind of property you intend on purchasing.
7. Infrastructural Development fee
This type of fee is usually paid when buying apartments in newly built apartment complexes and in developing neighborhoods. The fee is used to develop the area’s infrastructure.
In order to be able to use the modern facilities available, you need to contribute to the creation of the infrastructure.
Before buying the property, make sure you consult your real estate developer to find out if there are any mandatory infrastructural development fees and how much it is. If there are, ask the developer to include the fee into the final version of the purchase contract so that there are no additional fees and charge.
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