Off plan property purchases are becoming more popular, but many people are often hesitant to invest their hard-earned money in a property they haven’t even seen.
If you want to buy a property that is under construction or off plan, should you buy or should you wait?
You want to make sure you make the right decision before investing your money in real estate or taking out a mortgage.
With so many off plan properties options on the market, it becomes difficult to find the best one. How will you know if you’re getting what you pay for?
Find out what questions to ask before signing up for an off plan property with this guide, so that you can get the best off plan property at the best price.
You can use this list of off plan property questions to make sure you’re getting the right property for you.
What Is Buying Property Off Plan?
What is off plan property? Off-plan properties are buildings that are not yet complete.
They are bought on the agreement that they will be completed in the future, usually between one and five years.
Off-plan buildings can be bought for prices below market value because their value is expected to increase once they are completed.
Buying off-plan property is a great opportunity to buy a property at a bargain rate and wait for it to appreciate once construction is completed.
What If The Off Plan Property Prices Fall?
If you are considering investing in off plan property, it is important to think about what is going to happen if the property prices fall after buying off plan.
The price is just determined at the time of purchase, and there are no guarantees that the price will not change in the future.
If you buy off plan then you should consult with a trusted real estate consultant before buying. They will be able to provide advice about what you should do if property prices fall after buying off plan.
Only with this knowledge can potential buyers make an informed decision on which of these steps to take; hold it until completion, sell at current prices, or sell at reduced price.
What Are The Benefits Of Buying Off Plan Property?
Investing in off-plan properties is a great way to get into the property market at an affordable price.
Moreover, these off plan properties are often located in upcoming neighbourhoods with excellent infrastructure facilities, so one would be able to see great returns on their investment.
Some other benefits of investing in off-plan properties are:
– Staggering prices. These properties are sold at lower prices than those that are currently on the market.
– Higher initial rates of return. These returns are usually higher than what can be gained from investing elsewhere because these projects give investors a chance to reap the benefits before they’re finished being built up and ready for occupation.
If you need help with how to buy off plan property – then contact us, let’s hold your hands through the process!
How Do I Get The Right Spot For An Off Plan Property In Nigeria?
Lagos offer the best off plan investment opportunities in Nigeria.
This is primarily due to the strong and growing demand for residential housing in this market.
The population of Lagos is growing every day, causing house prices to rise. This is expected to continue for some time.
How Do I Make Sure The Off Plan Property Is Finished To A High Quality?
Off plan properties are often sold before the building work is completed, and it can be difficult to find out whether the developer has a good reputation, unless you’re working with a realtor that knows the inside out of the property market.
It’s important to get a thorough survey before you buy an off plan property and make sure that the developer has a good track record.
With our Affordable Home Ownership Solution for Off Plan home buyers, we focus on just developers with solid track records and experience in building solid homes.
How Does The Buying Process Work?
The process of buying an off plan property is complex and varies depending on the country.
The first step is to decide whether you want to buy. This is because the process can be time-consuming and costly, so it’s important to make sure you are thoroughly researching before making a decision.
Next, you will need to research thoroughly your chosen location, as well as the developer. The developer will provide information on how much of the project has been built and what stage it’s at currently.
You should also ensure that you research all local laws related to property ownership in that particular country.
How To Identify A Good Developer Before Buying Their Off Plan Project?
The first step is to understand the developer’s track record.
For example, what are the developer’s previous projects? Were they successful? How long ago were they completed? These are all important factors to consider.
Secondly, it is worth checking out the location of the property.
Ideally, you want to invest in a good location with an interesting design and architecture. It will increase its value and make it more attractive for future buyers or renters.
The third consideration is whether the off plan developer has good land titles for their projects or not.
If they do, you can be certain that they know what they’re doing, and they want the best for their clients.
This means that your investment should continue to rise over time, too, without issues from the government over land disputes.
How Can I Be Guaranteed The Off Plan Property Will Be Delivered As Planned?
Off plan property can be delivered as planned if you select a developer with a proven track record and transparency about their business status and process.
If you want to be guaranteed the off plan project will be delivered as planned, it is advisable to partner with a developer with a proven track record and transparency about their business status and process.
This is the best way to go around it.
And only an experienced realtor in the Lagos State Real Estate Market will have the right information about the developers that perform and those that don’t.
Who Will Manage The Off Plan Property?
When you buy an off plan property, it is common for the developer to give you a list of people who they recommend you approach to manage your property when it is completed.
The developer offers a list of possible parties who could manage my property during the off plan period. We can also recommend trusted associates to choose from like agencies, architects, surveyors and management agents.
What Are Some Incentives For Buying Off Plan Very Early?
The main incentive for buying off plan property early is the potential for savings.
It is quite common to see buyers who are willing to buy units at a 10% discount or more than one year ahead of time.
This provides them with the opportunity to save money, even if they are not planning on moving in right away.
It is usually purchased by future homeowners who intend to occupy it. They are given the option to make periodic payments on the property or pay the purchase price in one lump sum.
There are many advantages to purchasing off plan property like financial security, low-risk investments, attractive interest rates and guarantees of return on investment (ROI).
One of the main reasons to buy off plan property early is that you can get a better deal on investment property, as prices are typically lower than for properties that are already complete.
Investors who buy off plan property when or before they hit the market can also try to predict future markets by investing in properties that could be worth more at a later date.
We’re sharing these tips for buying off plan properties so that you make a wise decision when you’re ready to invest in off plan property.
What Are The Risks Of Buying Off Plan?
Off-plan purchases are not guaranteed to be profitable due to various risks.
The main one is, the property may not be built by the time you want to move in, or maybe it will be built but at a cost that is much higher than what you paid for it.
It also doesn’t cover any additional costs that may arise after purchasing, such as an increased supply chain cost for building materials. There are risks of permanent damage to the economy or the location where construction takes place.
However, the developers are very much aware of these risks, so they make sure they stick to the timeline to avoid disappointing the clients.
To help you mitigate these risks, we’ll be writing a guide to buy off plan properties the smart way on our blog – watch out.
Can You Negotiate When Buying Off Plan?
Everything is negotiable.
Asking prices are often plastered all over the poster when properties are being built. Of course, the developers will tell you that this is the price you’ll have to pay – but it is only an asking price, and you should be prepared to negotiate.
The likelihood of success will depend on several things, such as where the property is, how many you want to buy and the level of demand, as well as how far along the development is.
If it’s very early days, there might be a deal to be done, as the developer may need funding to continue the project.
Conversely, if the project is nearing completion and the developer still hasn’t found a buyer, you could be in a strong position here too.
Whatever stage the development is at, it pays to do your research, looking at sale prices of similar properties nearby.
And most importantly, if you’re looking at investing in real estate in Lagos, contact a real estate consultant – because we often already know which property can be easily negotiated.
Are All The Off Plan Approvals In Place?
Ask the developer for the licence, which is proof that they have obtained permission from the area’s town planning authority to develop the project.
Also ask whether the developer has received the following approvals: building plan, water, environment and pollution, and height clearance (if the building is situated near an airport).
What If The Off Plan Building Layout & Design Changes?
Often, developers show you one building and layout plan at the time of sale but alter it midway through construction. The flat’s area could increase.
The original plan may have shown a swimming pool and club opposite your apartment. Instead, another block of apartments may come up in that space.
Always, read the buyer agreement closely to find out if any redress is available to you if the plan changes.
Is An Early Exit Permitted?
Sometimes you may change your mind and decide not to keep an apartment.
Ask if an early exit is permitted. Some developers require curbs on people who want to buy the secondary market if their inventory does not sell.
Has the developer blocked sales in the past? And what transfer fee will be charged for an early exit?
Typically, the buyer pays a deposit for this kind of purchase before construction starts.
However, developers are usually not obliged to permit buyers to exit from their contract too soon after purchasing it.
If you want to leave your purchase after buying into an off plan property, then it might be difficult because developers may refuse your request and require you to continue with your purchase for a certain length of time.
Or sell your slot to someone else after agreeing with both parties. There are multiple ways to tackle this issue. However, you must read the buyer agreement document before making payment.
What If You Don’t Pay My Off Plan Balance On Time?
Buying off-plan property usually has an initial deposit, followed by monthly payments until the total purchase price for the property has been paid.
There may also be other charges, such as ongoing fees for managing the project, which is paid during the construction phase.
The buyer pays for this type of property in advance and does not get to occupy it until it is completed.
Off plan properties are often marketed as an alternative to traditional bricks and mortar properties because they offer greater choice over what kind of home you want without tying up your capital in one big lump sum upfront.
Unfortunately, there’s a chance that you might not be able to own your off plan property if you don’t pay for it on time.
If a developer needs a buyer to pay a certain amount of money before the end date, this is called an ‘off plan payment’.
If the buyer doesn’t pay up by the end date, they could be liable to pay a penalty fee, or forfeit their deposit.
Again, you must read the buyer agreement document – everything will be there. Even if you’re buying land in any area of lagos – everything will be there.
When Will The Construction Be Complete?
The timeframe for completion is mainly dependent on how long it takes to build your property, which is often stated by most developers on their marketing materials.
If your property is one of the quicker buildings in the development, then it may be completed within a few months – which is another advantage of buying off plan early.
If it is a more complicated building with higher levels of specification, then this timeline could be extended to up to 18-24 months or even more in some cases.
If you are interested in buying an off plan property from a developer, then you should ask them questions about their completion date, how they handle delays and any compensation that they offer for a delayed completion or changes in plans.
Can I Customize The Off Plan Property?
There are many reasons why buying an off plan property is better than buying a finished and ready-to-live property.
For one, you get to customize your home to suit your needs and taste, which is not possible with ready-to-live properties where the developer decides what the house should look like.
This customization might be limited to the wide array of features that are provided by the developers without attracting additional charges.
Off plan properties for sale are usually designed in a specific way to accommodate various people needs. However, if you want special features, it might attract some extra charges to get what you truly want.
How Do I Make A Profit On Off Plan Investment?
There are 2 primary ways in which you can make money from Off plan property.
1) Buying and holding
An investor may opt to hold onto his or her investment for the long run and gain a discount.
Here’s how it works:
Let’s say you eventually get a 20% Off plan discount. You can use this money for other investments.
In a rising real estate market, where prices are always going up, price discounts gained can be upwards of 50% by the time construction has finished.
This strategy is highly recommended for investors who are new to Off plan investment.
2) Buying and selling before it’s completed
Here’s how it works
You buy an off plan houses for sale in lekki for 60 million Naira, putting down an initial deposit of 3 million Naira which is (5%).
As demand increases, 6 months down the line, properties in the neighbourhood rise by 5% meaning the house that is still under construction will be worth 63 million Naira upon completion.
You may be able to find a buyer looking for a home to live in, or an investor willing to pay you for the right to buy the Off plan property.
For instance, they may offer 63 million Naira for the right to buy the property at 60 million Naira upon completion.
You have sold the property for 3 million Naira profit. This strategy is extremely popular for development in prime locations. It is one of the strategies used by well-experienced investors.
How Much Deposit Do I Need To Buy Off The Plan?
The deposit you need to buy off the plan is determined by the developer but typically starts at 10%.
So any value from 10% is not out of place.
On some occasions, the initial deposit will be 20% – 50% which depends on the building and the developer.
When Is The Best Time To Buy Off The Plan?
During the initial phase of the project, real estate developers offer attractive prices discounts on pre-launched or new-launched projects to attract homebuyers and investors.
If you are planning to invest or looking for a home, this is the best time to book your dream home at the lowest prices.
So if you want to invest in a budget property, look no further than a new launch project.
The pre-launch phase of a residential project is when the builder makes an announcement about the project proposals and starts the sale of the same.
Can I Get A Mortgage To Buy Off Plan In Lagos Nigeria?
The short answer to this is yes.
However, when you buy off plan properties, you’re investing in a vision rather than a completed property and some lenders will have an aversion to this.
Due to the possibility of a property decreasing in value before it’s even been built, and potential delays and complications during the build itself.
Due to the higher perceived risk, lenders will generally require a higher deposit for off plan mortgages, which is not attractive to most people.
Why Is It Cheaper To Buy Off Plan?
Off plan properties are more affordable than on the market properties for various reasons, including that they can be purchased before construction is complete and developers want to sell them as soon as possible.
Which includes the ability to purchase units before construction is completed and the desire to sell properties soon after they are built.
This often results in a discount price and a high return on property investment.
Can First Home Buyers Buy Off Plan?
Yes, first home buyers can buy off plan to save costs and relieve themselves from the stress of building their house.
Most big developers can give you a good idea of what to expect with their off plan properties, even if you can’t view the property as it will be.
Some will offer you the chance to tour show homes that are identical to your chosen property, or are very similar to it so that you can get a feel for the space and even some décor inspiration.
At the very least, they should provide you with a package of computer-generated visuals and detailed floor plans, so you’ll know exactly what you’re buying.
However, it isn’t all smooth sailing. You’ll certainly need to do your research, and there are some unique challenges presented by buying a home in this way.
Your best friend is a realtor who cares about what you want, instead of just pushing any off plan property on you.
At Priment Realty, we care. Tell us the kind of off plan property you want, and we’ll help you with the process.
Where Are The Best Off-Plan Projects In Lagos, Nigeria?
The best way to get the best Off Plan Property Lagos has to offer is to be in touch with a trusted realtor.
Because the best off plan, projects are first sold off the market before it gets to the market.
Also, you’ll be getting up-to-date information based on your needs, that is why it’ll be important to check out our Affordable Home Ownership Solution and claim a free consultation here.
So before you click on the next Off Plan Property For Sale ad, remember, you need to ask all these questions above.
How Can Priment Realty Help You With Your Off Plan Property Investment?
We can help you before following our Property Investment Matrix™
STEP 1: CONSULT – Book a call with us to discuss your real estate investment needs.
STEP 2: IDENTIFY – During the consultation, we’ll uncover your investment needs.
STEP 3: ANALYSE – We swiftly rush into action to get the verified properties that meet your needs.
STEP 4: PRESENT – You’ll see your next investment through physical inspection or virtual tour.
STEP 5: ACQUIRED – Congrats, your new property is ready & we’ll take care of the paperwork.
STEP 6: SUPPORT – As a client, we’re prepared to give you all the necessary support you need.
Priment Realty will also be able to provide you with insights about the property market in the preferred location you’re interested in.
We will also handle all aspects of buying or selling property, so if you are looking for real estate agent for properties in Nigeria, then we can help.
Check out our Affordable Home Ownership Solution and claim a free consultation here.