Is there any words in real estate known as Hidden Charges? The answer is NO.
Then why do people wrongly use the words often in their real estate transactions? The answer is Hidden Charge is an English word.
In real estate, the words call Hiden Charge are called STATUTORY FEES and these fees are customary when land is purchased. The followings are statutory fees in real estates:
SURVEY FEE
This is a government fee charged for mapping out the portion of land you paid for and the fee differs for different locations. For example, Eti-Osa charges N1 million per 1,000sqm; Ibeju Lekki charges N500,000, while most reals estates companies collect between N250,000 to N350,000 for Ibeju Lekki and N800,000 for Eti Osa.
DEED OF ASSIGNMENT
This is the fee charged for the transfer of ownership from the estate developer to the buyer.
DEVELOPMENT FEES
This is the fee charged for the provision and development of infrastructure within the estate.
Statutory fees are therefore not hidden charges as they are clearly stated in the forms, frequently asked questions (FAQ), and terms & conditions of your client interested property.
Let’s take a case study of when you buy land from the popular and unregulated Omonile.
When you buy land directly from Omonile/indigenous landowners, you have to pay for a survey; engage the services of a lawyer to draft an agreement; and you also pay the Omonile-fees which is unpredictable. You pay the Omonile whenever you start work on the land such as owo foundation (foundation money), owo deckings (decking money), owo roofing (roofing money), owo fencing (fencing money) and even for your borehole. You have no choice but to pay the youths or else they will disrupt work on your land and the amount ranges from N200,000 to N3million in total package.
Another risk of buying from Omonile is, if you don’t develop your land under six months, they can sell your land to someone else and relocate you to the next available swamp.
There are also fees you have to pay within the community such as the Community Development Association (CDA) fee for connecting electricity to your house. Aside from these costs, there are other associated costs that you incur such as building your drainages and fixing the road in front of your house. This stress you don’t get when you buy from an estate.
What Statutory Fee Will Do For You
- It will save you from the stress of Omonile problems and unnecessary fees such as owo foundation, owo decking, owo roofing, owo fencing, owo borehole, and owo youths
- You get an Interlocked street and well layout estate
- Good Drainage system
- Electricity & Street lighting
- Secure gatehouse and perimeter fence
- You are saved from excessive documentation fee as most lawyers ask for 5% of the cost of land
- You also get your land survey done at a discounted fee.
As a consultant, it’s our job to properly educate our prospects of the importance of these fees and I put this question to you: when you buy a new car, it’s not yours in the eye of the government until you pay customs duties; pay for vehicle particulars; insurance and other papers.
Experienced investors will always ask for the total package. For newbie investors, our job is to educate them as their consultant.
If you need more details on this subject, you can call or WhatsApp me on 0805 544 4556
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