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Property Valuation

Property valuation, real estate appraisal, or land valuation is the process of developing an estimated value for real estate properties. In simple terms, it is a well-detailed report of a property’s value in the market. The process can be very complex, ranging from knowing what your residential property is worth, to knowing how to invest in real estate, it is important to have knowledge on how property valuation works, and how it can vary based on the type of the property involved (residential or commercial), and how it will be used.

Knowing the value of a real estate property can be very difficult because no property is the same. Each has different and unique features such as the number of bedrooms, bathrooms, square footage, rentable units, location, etc. A key determinant in knowing the value of a property is the real estate market itself; it is the reason why a duplex in Ajah can be millions of naira less than the same property type in Banana Island, so the real estate market matters. For example, areas with high supply and low demand will be lesser in value compared to areas with high demand and low supply.

In this article, we’ll be touching on two important things as regards property valuation, they are:

  • Conditions that affect property valuation
  • 3 Methods of property valuation

Conditions that affect property valuation

There are 4 conditions that affect property valuation. Hence, to make an estimate of a property’s value, economic and social trends, governmental regulations and environmental conditions must be taken into consideration. These conditions are:

Transferability: How easy it is to transfer ownership rights from buyer to seller

Demand: The desire of a person to be a property owner, and having the financial means to fulfill this desire

Scarcity: The limited amount of competitive properties that are supplied

Utility: Being able to satisfy the desires and needs of a prospect or intending buyer.

3 Methods of property valuation

The primary method of carrying out property valuation is referred to as a real estate appraisal. Engaging in appraisal can be a very complicated method, and it includes some of the methods or processes that are preferable for determining the value of such property. Whatever method will be applied in an appraisal is solely dependent on the type of property involved, and the reason for the appraisal. Real estate professionals or appraisers, use 3 major methods of appraisal or property valuation to determine the value of such property. The 3 most used methods of property valuation are:

  1. The Sales Comparison Process

This method is one of the popularly known and most used methods known to real estate professionals and appraisers. This method is solely used for appraising properties, mostly for the reason of wanting to apply for a mortgage. As the name states, the sales comparison process makes use of information or data from the real estate market, the sale prices in particular, so it can be used to estimate the value of a property.

It involves the appraiser or real estate agent making use of the sales price of a property in a certain area to compare to a similar property that is about to be appraised, the property with which another property is being compared is referred to as comparable or comps. Here’s an example, you’re looking to purchase a residential property and it has 2 bedrooms and 3 bathrooms, then the comparable should have the same thing, and the location of both properties must be close.

“Should” because, as earlier stated no property can be the exact same thing, so in a situation when there are differences, adjustments are usually needed in order to account for these differences. Appraisers must be skilled in identifying the differences between the comparable, and how to value these differences in order to make the right adjustments to the property that is to be appraised.

2. The Income Approach Method

The income approach method is a method of property valuation that specifically common to rental properties and commercial real estate, the overall process revolves around the ROI (Return on Investment) value of the property, and this ROI value is usually estimated by how much the said property can generate.

This method involves the appraiser or real estate agent calculating the gross potential income, and then subtracting the expenditure and vacancy period, in order to figure out the total income that is gotten from such property. After this is gotten, the appraiser then applies a capitalization rate in order to get an estimate of the total value of that property.

 A capitalization rate is defined by as “the rate of return that is expected to be generated on a real estate investment property”.

3 Cost Approach Method

The cost approach method involves considering the value of a property as the cost of that property plus the cost of replacing that property (costs of construction) and subtracting the functional and physical depreciation. It deals with different estimates of value for the property, and taking depreciation into consideration, these estimates are then added together to get the value of the entire enhanced property. This method is commonly used for specialized and unique properties that are not easily sold like government buildings, hospitals, and schools.

8 Tips for Home Sellers in Nigeria

Having read our previous article titled 4 Essential Tips for First-Time Home Buyers in Nigeria, it will be easy to deduce that whoever is out to buy a house, already has the image of the type of house they want to buy in mind while searching. They most likely have written out the features they want it to have, the location of the house, and its size – all of which are dependent on the buyer’s preference.

What these mean for you as the seller is that, the property you’re about to sell has to be very similar to the image your potential buyer has in his/her mind. Hence, to see to it that your property is sold, a list has been compiled, to give you expert advice on how to turn that no-longer-needed property to cash.

Ask yourself, “What Next?”

It may seem funny that “what next?” is coming as the number one advice or tip, instead of coming as maybe the second, third, or last point. Well, think about it, you’ve decided that you no longer need the house and so you want to sell it. What next? After deciding that you want to sell a property, the next thing to do is to carry out research.

Research on what exactly? Research on the real estate industry: commercial properties. Except you bought the house just now, or yesterday, things have changed, like mortgage rate. So study the market to know what to expect, or you can just have a professional do a property evaluation for you.

Fix up the house

You sure don’t want to sell a “worn out” house to a buyer, do you? No one will even buy it, it has been stated earlier that your potential buyer already has a mental image of the kind of house they want, and if your house is lacking in those details, you are not closing that deal. So, if need be, the house should be renovated, the walls should be taken care of, the pipes and storage should be fixed, the doors, nets, and windows should be repaired, the house should be well furnished by an interior decorator for the best experience, and the surrounding should be conducive – see to these things.

Know the persona of your potential buyer

Knowing the personality of your potential buyer will be dependent on the location of the house, the state, the neighborhood, the size and features of the house. Say, for example, your house is a bungalow in Ajah, you can already have a rough idea as to what type of buyer to expect, and if it is a 3 bedroom flat in Surulere, you also know what type of buyers to expect. Knowing the persona of your potential buyer will assist in how you renovate the house and how you add any new features you might want to add.

Get a real estate agent/agency

This is as important as any other point above, or that will appear below. If need be, conduct an interview for selecting the best fit – the real estate agent/agency. This will form a basis for a relationship as you start/proceed on your home selling journey. Picking the right real estate agent/agency will ensure that you get good sales. This agent will help in valuing your house based on certain details like the texture of the soil, the materials used in constructing the house, etc.

List the property as available and market it

Once the necessary repairs have been made to the house, and you have gotten a good agent/agency, the next thing is to market it. Before marketing your property, timing is important. You don’t just sell anytime or any day, your agent/agency will know when best properties sell and when they really don’t. When the time is known, time your marketing with this period; take the necessary steps to make your potential buyer know that such property is available for sale.

Give room for creativity; let your real estate agent/agency play a major role in how the marketing/advertising goes as it will play a key role in how the sales will go. Agree with your agent on how the marketing should go – offline or online, and what platform will be utilized – online platforms like social media, real estate agents, or one-on-one approach.

Have an open house

This means showcasing your house to a potential buyer or buyers. Based on the agreement between you and your real estate agent/agency, the person or people who will be eligible for an open house can be based on those who state good offers after having seen your advert. When they come around, take them through each compartment, one after the other, and have them imagine how wonderful or amazing it will be if they started their lives there.

Negotiate the price with anyone that shows interest

When you already have a lead on who is interested in purchasing the property, have a sit down with them to negotiate the price. During negotiations show genuine interest by listening attentively to them while they speak, ask questions, or while expressing certain fears or concerns. Answer their questions and make it simple, when they ask for time to think about it give them time, don’t disturb or pester them, they will get irritated and never come back. Don’t force the decision on them, allow them to think things through, be warm and friendly.

Close the deal

Only those who apply the above tips can get to this stage. This is where you and the buyer get to shake hands on an already agreed deal, they sign paperwork and the property is sold – it is an official process to show a transfer of ownership.  

4 Essential Tips for First-Time Home Buyers in Nigeria

Buying a home in Nigeria or any other place in the world is a key decision. This is because it is not about your financial commitment; it also deals with your emotions, and psychology- because you’re about to spend hard-earned money. It can be challenging, as there seems to be so many tasks, demands or requirements involved in the process, and it’s your first time.

You are anxious and you sure don’t want to make a costly error. This article will serve as a guide for you, if you’re about to make your first purchase. You sure don’t want to spend your money on what you don’t like, or worse get duped. Below is an outline of 5 key tips, or things to consider if you will, before making your first purchase:

  1. Check your financial capability

This should be your primaryconcern; you sure can’t purchase your dream house if you don’t have the means or enough means to do that, now can you? So before hopping on to the website of a real estate company to scroll through available listings, and then find yourself mesmerized in the awesome wonder of an amazing house, do a critical audit of your finances.

You need to make sure that you don’t just have enough money to procure the house, but you also much more to manage the regular expenses required for running a home. So, when the audit is done, it will inform you of whether you’re financially muscular to go ahead with purchasing the house, or you need to chill a little. To have up to 6 months or more worth of home catering funds, you can do the following:

  • Start an emergency savings
  • Live on your means or below. Don’t spend money on unnecessary things, cut down your spending to only essentials.
  • Have a good credit if you hope to apply for a home loan. Having a good credit means having a history of paying bills on time.

2. Know your ideal kind of home

You won’t just walk out of your home one day or search through a real estate because you want to buy a house, what type of house exactly? There are many options available when it comes to purchasing a residential property; there is a duplex, a condo, a house with 2-4 units for more than one family, a normal single-family home, etc.  Each property has its own advantage and disadvantage depending on whichever you want to go for. So you need to decide home meets your description, and go for it.

3. Create a feature list for the house you want to purchase

After deciding what kind of structure your house will be, you need to have a list of features that will characterize where you stay – this is where emotions and psychology come in. so, while making a list, make sure to keep it flexible so it can be easily adjusted, you’re about to make one of the biggest purchase ever and so you need to make sure that whatever you go for meets your needs or wants as much as possible. Your list can vary from as large as the size of the house and the neighborhood, to the arrangement of your kitchen, and if you want to have a pool or not.

4. Get in touch with an Agent

Once you have sorted numbers 1-3 above, get in touch with a real estate agent. Hiring a real estate agent will save you unnecessary stress and time. These people already have an idea of the terrain; they know where best to look for your ideal home after you’ve given them the features, they will save you the stress of having to go through the stressful process of searching a house alone. So, in essence, they are skilled professionals who can help you navigate the tempest of owning a home. We deal in residential properties, and we’re always on ground to serve your property needs. If you’re looking to make your first purchase, you can contact us, we’re always ready and on ground to help. So, there you have it, 4 essential tips for first-time home buyers.

Difference Between Real Estate and Stock Investment

A vast majority are not aware of the fact that there is a difference between Real estate and Stock investment. A lot of people have invested in real estate and stocks respectively, but only a few can tell that there is a difference between them. Some people even argue which is better and which isn’t as they are solely concerned with the good returns their investments can get them, I mean, who doesn’t want good returns?

But just before you conclude on which is better and which isn’t, or which is riskier, it is better if we first discuss their differences, from which you can then choose your preference. That settled, we’ll be looking into the following areas:

  1. What is real estate?
  2. What is a stock investment?
  3. Differences between real estate and stock investments

What is real estate?

According to, real estate is property made up of land and the buildings on it, as well as the natural resources of the land including uncultivated flora and fauna, farmed crops and livestock, water, and any additional mineral deposits. So, real estate is largely beyond lands, it also refers to natural resources and it’s associating components. There are also types of real estate such as commercial real estate, industrial real estate, and residential real estate.

What is a stock investment?

Stock investments on the other hand refer to investing in part of a company that allows anyone to buy and sell on a stock exchange market on any other approved platform. Your investments thus serve as a share of what you own in that company, and it also stands as your entitlement to the assets and earnings of such company. In simple English, you invest in a company, as their stocks rise, so does your investment.

Differences between real estate and stock investments

Now that the definitions of both real estate and stocks have been defined, let’s get to the real deal: differences between real estate and stocks/stock investments. Here are some differences between real estate and stock investments:

  1. Real estate is a piece of land or property that has been procured for either personal use or for acquiring monetary gain, while stock investments simply refer to your cut in a company’s earnings.
  2. Stocks are relatively cheap, how much you invest depends on your objective. The stock price is volatile and the company’s financial performance has a direct effect on the price of the stock. So, whatever happens to the company’s stock happens to your money too. Real estate, on the other hand, is usually a one-time investment thing and it is determined by various factors such as the financial ability of the buyer, the size and amount of the property, the location of such property, the return on equity of that property and also the title document of the property.
  3. Real estate can span over for years as it is a long-term objective, but the stock investment is commonly short-term and it is dependent on the portfolio requirement, that is, the requirement of the investor.
  4. Real estate is less liquid. Hence, selling a property is relatively less easy as it is tied to many factors and legal processes. Stocks are very liquid as compared to real estate and they can be sold easily.
  5. Real estate does not in any way generate dividends, but if leased or sub-leased, it will generate an amount of rent regularly as agreed between the involved parties. Stocks generate dividends based on how well the finance of such company performs, and these dividends are not usually regular.
  6. Real estate owners are responsible for all the decisions they take which directly impacts the existence of the property, while a stock investment only makes the investor an owner when it comes to getting vote rights on diverse issues but cannot make decisions that involve the senior admins.
  7. The price of real estate doesn’t change anyhow, it changes gradually because it is affected by factors or happenings that influence the economy of a country such as unemployment, population, etc. The price of stocks on the other hand changes rapidly and every amount invested can make an interesting difference as they can be bought in bulk.
  8. Banks do not give out loans for stock investments, but you can receive loans for real estate transactions.
  9. If there is a need, companies can buy back their stocks from investors. But once a real estate property is sold, it cannot be bought back.

So here we have it, folks, some differences between real estate and stock investments. It is only advisable that before one delves into either investing in real estate or stocks, one should consider the risks involved and also study the performance rate of both industries in the past few months or years.


Hey there, in this article, we’ll be discussing 7 property documents you should be aware of. As a property purchaser or as one who is seeking real estate investments, you need to be in the know of property documents and what they or are saying about the property you’re about to purchase. In a previous article “How do I start investing in real estate? Part 1” we discussed the necessary and important things needed before one takes a deep dive into real estate investment.

Life is not hard; you just need to know your way around things so you won’t be caught “unfresh”. Property documents can also be referred to as land titles, so what exactly is a land title? A land title can be referred to as the legal right or ownership one has over a property. These documents govern property transactions or dealings, it is worthy of note to know that all lands belong to the government of that state. So, what then, are the property documents, or land titles (as they are commonly referred to)? Let’s get to it!

We’ll be discussing only 7 land titles one needs to know when it comes to properties in Nigeria as they are more than that. The 7 are; Certificate of Occupancy, Gazette, Deed of Assignment/Conveyance, Deed of Mortgage, Deed of Sub-Lease, Deed of Lease, and Survey Plan.


A certificate of occupancy, commonly referred to as a C of O is the document of a property given to you by the government and it attests to the fact that you have right to that property or land. The document is an official lease given by the government and as the owner of such property; you’re eligible to the property for 99 years after which you can apply for renewal.


A gazette refers to the official record book where the activity of a government is written in detail and then recorded. This document shows towns, communities or villages that have been granted excision and whatever amount of land, either in acres or hectares that the government of the state has given them. So, if anyone decides that he wants to sell his portion, it has to be within the area of the excised land.


This is a legal document that is used to transfer a property from one person to the other. It is an important document and it should always be at the front of your mind to request for it whenever a property transaction has occurred. The document contains relevant information for a real estate deal. For example, it contains the specific date when the possession of the property is transferred from the owner to the current owner. The document also gives a detailed description of the property that has been included in the conveyance of ownership.


This is a legally binding document that allows you to use your property as collateral for loans. It allows the lender to place a lien on such property until you complete the payment of the loan. So when people say something like “mortgage” or “mortgage payment”, they are in fact, referring to loan or loan payment while the document keeps the property safe for the lender.


Deed of Lease or Governor’s Consent is a document that you obtain whenever you purchase a land/property that has C of O. This is the land document that informs the Governor and every other person that the land/property involved has changed owner. It is the document that permits the rights of occupancy to that property by the new owner.


This land title document is issued by anyone who has a C of O who decides to give out a part of his/her property to a new owner or third party. This sub-lease is valid till the C of O expires, and the contract can be renewed upon the renewal of the C of O.


This property document is important as it shows that such property truly belongs to you and that it is not under government acquisition. This title document shows the boundary measures of a piece of land so that a precise measurement and detailed description of that land is given. If the property you’re about to purchase is without buildings on it, make sure you do a detailed inquiry on the land to be on the safe side.