10 Problems Of Real Estate Professional Practice In Nigeria. Real estate is also known as the property market/industry, simply defined, is the buying and selling of properties majorly lands and houses, or the leasing of houses or buildings for multipurpose functions to interested clients.
The real estate industry contributes to the housing delivery system in Nigeria as it caters to the housing or accommodation needs of millions of people.
The real estate business is one of the most lucrative and profitable business in Nigeria as of today, and it is safe to say many Nigerians are venturing into the industry.
Challenges/ Problems Of Real Estate Practice In Nigeria
Sadly, the professional practice of real estate in Nigeria is vexatious as the industry is full of disorganization, unprofessionalism, and it is mostly unregulated.
Though not all the challenges come from the end of the practitioners, some of these challenges are beyond their control due to one reason or the other. Some problems from the end of the practitioners include but not limited to the following:
1. Unprofessionalism Of The Staff
Many Nigerians are venturing into the real estate business because of the profitability of the business without having proper knowledge of what the business comprises.
The industry is not an industry that can be undertaken by just anyone, one needs to take pieces of training, or courses related to business to be successful in the industry, and to be able to give maximum result to the clients.
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2. Use Of Technology
It will not harm real estate practitioners to employ the use of technology in their business. Most practitioners in Nigeria don’t have a functioning website, some even go as far as not having a working email which is saddening.
Using the GSM for just making calls or texting is not enough for a real estate practitioner. To attract more clients and improve the industry in the country, the real estate practitioners should make the most of technology in delivering their services.
3. Accessibility Of The Office And Office Layout
Many real estate offices in Nigeria are not easily accessible or even visible as they are always in a corner of the street. Even worst, some of these offices don’t have banners indicating it is a real estate agency. Real estate practitioners need to be intentional about the location of their office or firm.
The office should be easily accessible to the clients and it should also be visible. The more the accessibility and visibility of the office, the higher the patronage. If possible, the address of the office should be put on the Google map to be found easily.
Besides, a real estate agent office should be spacious enough to accommodate many visitors at a time because people are always in a search of houses day-in-day-out. The office should also be kept clean all the time.
4. Trickery Attitude Of Practitioners
Some real estate agents indulge in misconduct by exploiting their clients because of their ignorance in the real estate business. For instance, a real estate agent can mislead a property owner on the actual worth or price of a property by presenting to the owner a value below what is actually obtainable in the open market.
The agent thereby convinces the property owner to permit him to sell at the lowest value, when the owner agrees, the agent sells the property for the actual price in the open market or even higher compared to the price he and the owner agreed on, and the agent takes the rest as his commission.
This crook practice of some real estate agents has made the public distrust the real estate practitioners in Nigeria.
The other reasons beyond the control of the practitioners are:
5. High Cost Of Property Development
The cost of developing a property in Nigeria is very high, especially in cities like Lagos, Port Harcourt, Abuja, and so on and this poses a big problem for the real estate practitioner.
The high cost of property development is due to the high cost of building materials, and the high cost of hiring skilled labor. Building materials are more expensive in Nigeria when compared to that of neighboring countries, and this is making housing expensive in the country.
6. Difficulty In Land Registration
The bureaucratic process involved in land registration in Nigeria is very annoying. The country is one of the worsts globally when it comes to the registration of property.
The registration process takes a long time due to many procedures the real estate practitioner goes through during registration.
Registering doesn’t just take long; it is also very costly. And this is a big problem for the real estate practitioner.
The tax paid by the real estate practitioner is just too much. Real estate practitioners are subjected to multiple taxations in Nigeria, some tax and levies paid by the practitioner include property tax, the land use tax, income tax, building plan approval tax, development tax, and so on.
There are also cases where the practitioner has to pay renovation tax whenever they want to renovate their properties.
8. The “Omo-Onile” Saga
The existence of omo-onile is one of the greatest problems in the Nigerian real estate industry. These people extort money unnecessarily from property developers.
They demand levy for almost all the development done on the building site, starting from the foundation to the fencing of the site.
They even collect money for materials transported to the building site. These people thereby contribute to the cost of developing a property in the country.
These “omo-oniles,” because they are children of the owners of land goes as far as selling the same piece of land to two different clients, which causes battles between clients. A good number of land cases in courts today are as a result of the dubious attitude of the “omo-oniles.”
See Also: 6 Tips to Save for Retirement in Nigeria
9. Slow Judicial Process
Another infuriating problem of real estate practice in Nigeria today is the slow judicial problem of land cases. A land case can take 10 to 30 years to resolve in Nigeria.
This makes no sense at all as most of these cases are usually sensitive. But without the court judgment, that piece of land remains untouchable.
Unarguably, the significance of the real estate industry in Nigeria cannot be underestimated as the industry solves the housing delivery system in the country, but sadly, the industry is still burdened with numerous challenges that are hindering its growth.
If the government and regulatory body can see to these challenges and ensure that no unprofessional element is in the industry, there would be a stupendous growth in the Nigeria real estate industry.
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