PROPERTY TRANSACTION GUIDE

Land Buyers Flock Mowe As Developers Offer Instalment Payment

By Michael Simire and Bamidele Ogunwusi
Published: Daily Independent, Monday, 10th Nov 2008

The carrot dangled by developers has apparently caught as planned in Mowe, where aspiring buyers to landed property in the axis continue to multiply.

In what looks like a deviation from the traditional cash-and-carry scenario, real estate promoters in the neighbourhood seem to have devised a "convenient" payment scheme that appears to favour both buyer and seller.

Though not entirely novel, the idea of payment to acquire real estate, however, looks to have taken on a new identity among investors in fast-developing area, where rising supply is shooting up property values.

Courtesy of numerous press calls, the news is spreading fast and Mowe has become the toast of the sector, as numerous estates spring up.

For instance, Messrs. Propertymart Real Estate Investment Limited is offering, courtesy of an ongoing promo, a 19-month instalment payment at "Palms Garden Estate" wherein the beneficiary pays N25,000 monthly, totaling N475,000.

A buyer willing to pay at once will part with N425,000, even as the price per plot will revert to N750,000 when the promo ends by the end of November.

Similarly, the firm of Greensview Property and Investment Limited is offering two flexible options at its "Greens Garden Estate".

While an applicant seeking to pay within six months will cough up N82,500 monthly and pay a total N495,000, those who wish to within 12 months will pay N44,200 monthly and end up parting with N530,000. Outright payment attracts N450,000.

Messrs. Vetra Ventures Limited is likewise offering instalment payment at "Crystal Park Estate", where a beneficiary will pay N41,000 monthly within 18 months.

Also, at New Creations Properties Limited's "Covenant Garden City," buyers are to pay N45,000 every month within 18 months to by a plot of land that used to sell for N500,000 but jumped recently to N800,000.

Land at "Sherryview Garden Estate" (being developed by City Planning Properties Limited) that appreciated from N400,000 to N800,000 attracts a N33,000 monthly payment within 24 months. The same scenario applies for Jewel Realties' "Sky Garden Estate."

But Builders Trust demands an initial down payment of 10 per cent of the total N450,000 for a plot of land at its "Gloryland Estate". The buyer will then pay N25,000 monthly within 18 months.

In a reaction, industry stakeholders have expressed varying views over the development. A developer disclosed that the installment payment plan has made some of them liquid enough to continue work on the site as, according to him, the deposit is in most cases ploughed back into developing the site.

Another developer said the approach had made it possible for them to be able to negotiate with banks with a view of obtaining loans with less stringent conditions.

Yet another developer who pleaded anonymity said the payment plan made it possible for his company after the completion of the sale of land to begin the first phase of the housing project.

"One thing that really worked for us was that we have bought the land and completed all formalities on it before we began to sell the land through installment plan. Since buyers pay monthly, we have been able to get money to do things on our other projects in the scheme," said the developer.

Estate valuer, Mr. Ime Udoetuk, said, "Ordinarily, the idea of acquiring land through installment payment eases the financial burden on buyers and should stimulate the market.

"Word making the rounds is that the Ogun State Government is yet to grant title. Expectations are that title will be obtained before installment payment is completed. To that extent, the risk element is heightened and things could go wrong."

Another valuer, Mr. Samuel Ukpong, expresses support for the development but pleads for sincerity on the part of the developers. He fears that some may not have the appropriate personnel, mix or experience.

"Nothing can go wrong if the promoters are honest and sincere. Mortgages can work if they have long-term funding," he said.