In the world of investing, the famous saying goes, “due diligence is the breakfast of champions.” Nowhere is this truer than in the Nigerian real estate market. The difference between a highly profitable investment and a devastating loss often comes down to one thing: the quality of your investigation before you buy.
But “due diligence” is more than just a buzzword; it’s a systematic process of verification. It’s about replacing assumptions with facts and ensuring that what you think you’re buying is what you are actually buying.
This ultimate checklist breaks down the due diligence process into clear, actionable steps. Use it as your guide to navigate the market with confidence and protect your hard-earned capital.
The 3 Pillars of Due Diligence
A thorough investigation covers three distinct but interconnected areas. Neglecting any one of them leaves a critical blind spot.
- Property Due Diligence: Verifying the physical attributes and status of the land/building.
- Legal Due Diligence: Verifying the authenticity and legality of the property’s title and ownership.
- Financial Due Diligence: Verifying the costs, value, and financial viability of the investment.
Pillar 1: Property Due Diligence Checklist
This is your on-the-ground investigation.
- Conduct an Independent Site Inspection: Go to the property yourself or have a trusted representative (like a sourcing agent) go for you. Do not rely solely on pictures or videos provided by the seller.
- Hire a Surveyor for Charting: This is a critical, non-negotiable step. Your independent surveyor will use the coordinates from the seller’s survey plan to chart the land against the government’s master plan. This officially confirms:
- The exact location and boundaries of the land.
- That the land is free from government acquisition.
- Assess the Land’s Topography and Condition: Is the land dry, or is it swampy/waterlogged? Swampy land requires expensive foundation work, which must be factored into your budget.
- Investigate Neighborhood & Accessibility: What is the condition of the access roads? What is the level of development in the area? Is there existing or planned infrastructure (electricity, water)?
- Talk to the Community: Speak with residents or shop owners in the area. Ask about the history of the land, security in the neighborhood, and any potential community issues.
Pillar 2: Legal Due Diligence Checklist
This is the official paperwork investigation, which must be handled by a qualified property lawyer.
- Obtain All Title Documents from the Seller: Request clean copies of the root title (e.g., Certificate of Occupancy, Deed of Assignment, Governor’s Consent) and the registered survey plan.
- Conduct a Search at the Land Registry: Your lawyer will take these documents to the state’s Land Registry to conduct an official search. This is the only way to definitively verify:
- The true legal owner of the property.
- The authenticity of the title documents.
- That there are no registered encumbrances (like a mortgage or a court judgment) against the property.
- Verify the Seller’s Identity: Ensure the name on the title document matches the name on the seller’s valid government-issued ID. If it’s a family property, ensure all relevant family members have consented to the sale.
- Check for any Unpaid Property Taxes: Confirm that the seller has paid all outstanding land use charges or other property-related taxes.
Pillar 3: Financial Due Diligence Checklist
This is about making sure the numbers make sense.
- Confirm the Total Purchase Cost: The asking price is just the beginning. Get a written breakdown of all other fees: legal fees, survey fees, agency fees, and any developmental levies.
- Conduct a Comparative Market Analysis (CMA): Research the prices of similar, recently sold properties in the immediate vicinity. This helps you determine if the asking price is fair market value. An experienced real estate consultant can provide you with a professional CMA.
- Assess the Potential for Return on Investment (ROI): If it’s an investment property, calculate the potential rental income and weigh it against your total costs. What is the likely appreciation rate for the area?
- Secure Your Funding: Whether you are paying in cash or seeking a mortgage, ensure your funds are secured and ready before you commit to the purchase.
The Final Word: Diligence is Your Best Defence
Conducting thorough due diligence is not a sign of distrust; it is a sign of a serious and intelligent investor. It is the professional standard for ensuring your investment is safe, secure, and poised for growth.
At MiraEmma Properties, due diligence is the bedrock of our business. We believe in verifying first, so our clients can invest with absolute peace of mind. Every property we recommend has already passed a rigorous due to diligence process, saving you time and protecting you from risk.
Don’t leave your investment to chance. Partner with a firm that puts your security first.
