The high cost of housing has become a source of concern for most real estate investors. This, combined with the rising cost of building materials, has pushed many home buyers to look for a cheaper alternative to acquire homes at a discounted rate. This low-cost property acquisition option is available in pre-launch, launching or introduction, and post-launch prices. These prices are the result of a home’s various discount variations as it is completed in stages. Essentially, purchasing a home early is less expensive than doing so later on, when the price is bound to rise.
How to Spot Home Discounts
The process of looking for a home to buy is typically difficult, and most property investors are unable to execute this house haunting flawlessly. But some property investment companies, both public and private, advertise their home-for-sale products in newspapers, magazines, and publications. Furthermore, real estate online sites are another way to find good deals on properties in Nigeria. In rare cases, you may have the opportunity to meet the developer while the home is being built. A deal can be finalised at this point, but you must act quickly because the longer you wait, the higher the prices become. One easy way to go about this is to connect to a realtor because some of these realtors get first-hand information from developers before the public get to know about the offers.
Pre-launch and Early Bid
There is no better time to get the best deal on a home than during its pre-launch phase. During this early stage, homebuyers typically receive a 15% to 25% discount, which may be higher or lower depending on the scope and cost of the house project. This is a time property companies assess the general public’s reaction to the project. The con is that available slots during this time are limited.
In addition, when a homebuyer expresses an interest in purchasing a home during this stage, the real estate company rewards the person for taking a risk by lowering the building’s purchase price. Following the goodwill customers, company begins to generate cash flow through bookings, reservations, and deals.
Launching or Introduction Phase
This is the stage at which the developer sells the house to a prospective buyer at a formal event. At this point, the brokers, who act as middlemen in the marketing chain, make the necessary arrangements and are tasked with ensuring that an agreement is reached between the company and the buyer. Also, during this stage, most real estate agencies offer discounts ranging from 10% to 17%. For smaller projects, the home discount may reach 20%.
This is an important phase because it marks the time when the terms and conditions of the home are agreed upon. Legal actions are also carried out in accordance with the law, as both the company and the client will sign the contract papers in the presence of their respective legal representatives. Once everything is in order, both the homebuyer and the property agency can set a date for the building’s official transfer of ownership. Meanwhile, because the house is not yet finished at this point, there is some execution risk. If things go wrong, the homebuyer will be refunded in full or depending on the agreement. Although this is a rare occurrence, it is important to involve a legal practitioner.
This is the stage at which the developer completes the home project and presents it in marketable ready-made form. During the post-launch phase, the house is open to the public and the price is set. This is due to the fact that the home has been completed and is well furnished, so the risk involved in this stage is minimal. Regardless, legal counsel is involved because there are instances where the real estate agency may wish to take advantage of the buyer. This is also the time when the property will be advertised in newspapers and on television for marketing purposes.
Risk is an inherent component of all businesses, including real estate. Early investments in real estate are more risky than later ones, and they are also heavily discounted. When an investor takes a risk by placing an early bid on a home project during its pre-launch phase, he or she will almost certainly be rewarded with a discount. Many homebuyers are hesitant to purchase a home at this early stage due to concerns about some unfavorable factors. Those who can muster the courage to invest in such circumstances are the prepared risk-takers.
As a project progresses, the risk involved decreases. Buyers are less risk-averse at this stage because the sole purpose of the house-building project will be revealed to the general public. In fact, property experts advise homebuyers to seek the advice and services of a professional real estate advisor before purchasing a home during its pre-launch phase. This is done for evaluation purposes, and it also protects investors from being duped. Nonetheless, adhering to the proper legal and formal procedures will ensure that risks are minimised. Two important documents used to verify the genuineness of the seller are:
- Intimation of Disapproval (IOD) Papers: This contains information about the developer’s different approvals by responsible government authorities.
- Commencement Certificate (CC): This document authorises the developer to start work on the home construction project.
Using the pre-launch strategy to purchase a property is a better way to save money on real estate investment, although it is more risky than buying it ready-made. That is why you need a real estate professional to advice you. The reasonable discount involved is too tempting and enticing for most real estate businessmen to resist. Furthermore, property investors who use this home buying method stand a good chance of saving up to 25% of their investment. When combined with its growing trend, the real estate sector may undergo a paradigm shift, and this development may continue to thrive into the near future.
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