When it comes to buying or selling property in Nigeria, many people focus solely on the cost of the property itself. However, there is often more to the transaction than meets the eye. Hidden fees can quickly pile up, turning what seemed like a straightforward investment into a financial strain. If you are planning to venture into the Nigerian real estate market, it is crucial to understand these extra costs so you can make fully informed decisions and avoid unwelcome surprises.

Let us break down the most common hidden fees in Nigerian real estate transactions.

1. Agency Fee

One of the most common hidden fees in property transactions is the agency fee. In Nigeria, real estate agents typically charge a fee for helping you find or sell a property. The standard rate is usually five to ten percent of the property price. While some agents mention this upfront, others only bring it up after a deal has been finalized. Always clarify agency charges early in your negotiations to avoid confusion.

2. Legal Fee

You will need a lawyer to handle the verification of property documents and the drafting of the deed of assignment or lease agreement. Legal fees typically range from five to ten percent of the property value. Some lawyers may also charge consultation or processing fees separately, so ensure you have a clear agreement on the total legal cost from the beginning.

3. Survey Plan Fee

Especially in land transactions, the buyer is often responsible for preparing a new survey plan. This document officially outlines the boundaries and measurements of the property. Surveying costs can vary based on the location and size of the land, but generally fall between two hundred thousand to five hundred thousand naira or more.

4. Governor’s Consent Fee

In Lagos State and other parts of Nigeria, obtaining the Governor’s Consent is a legal requirement when transferring property ownership. This is an essential process that gives the government recognition of your ownership. However, it comes with significant fees that can amount to up to six percent of the property’s assessed value.

5. Registration Fee

After purchasing property, you are expected to register the title with the state government. Registration fees differ from state to state but can add another three to five percent of the property value to your total expenses. Skipping this step puts your ownership at risk, so it is a necessary but often overlooked cost.

6. Development Levy and Infrastructure Fee

For properties in new estates or developing areas, developers often require buyers to pay a development levy. This fee is meant to cover the cost of building infrastructure like roads, drainage systems, electricity, and water supply. It can range from a few hundred thousand to several million naira, depending on the scale of the development.

7. Service Charge

For buyers purchasing properties in serviced estates, a service charge is usually applicable. This covers the maintenance of communal areas, security, waste management, and sometimes electricity and water supply. Service charges can be billed monthly, quarterly, or yearly and are often a significant additional cost.

8. Agency Commission for Property Inspection

In some cases, agents demand a token or commission just for taking prospective buyers on property inspections. Though it is not standard practice everywhere, it is becoming increasingly common in certain markets. Be sure to ask if the inspection comes with a fee before setting up appointments.

9. Documentation and Administrative Fees

Apart from legal and registration costs, developers and property companies may impose documentation and administrative fees. These cover the preparation of sales agreements, allocation letters, and other internal processing. Though often small compared to the property cost, they can still run into hundreds of thousands of naira.

10. Miscellaneous Costs

There are several smaller fees that buyers might encounter depending on the specific transaction. These could include community development fees, security levies, ‘Omo-Onile’ fees (especially for land in rural or semi-urban areas), and courier fees for document delivery.

How to Protect Yourself from Hidden Fees

Navigating hidden costs in real estate transactions can be overwhelming. However, with careful planning, you can minimize their impact. Here are a few tips:

• Ask for a comprehensive breakdown of all charges upfront before committing to any transaction.
• Work with reputable agents and legal practitioners who are transparent about their fees.
• Budget an extra ten to fifteen percent of the property price to cover hidden costs.
• Insist on written agreements that list all fees and who is responsible for paying them.
• Verify all land documents and check if any outstanding government charges exist.

Hidden fees are a reality in almost every Nigerian real estate transaction. Being aware of these charges helps you plan better, avoid unexpected expenses, and ultimately enjoy a smoother property buying or selling experience. At BCH Properties, we believe in full transparency. We guide our clients every step of the way, ensuring there are no unpleasant surprises.

Ready to make a smart and stress-free real estate move? Reach out to us today and let us help you navigate the Nigerian property market with confidence.