Whether it’s land or a building, buying property in Sierra Leone can be an arduous and confusing process particularly for first time property buyers. Each transaction has its nuances but regardless, here are 8 steps you may want to follow:
Step 1 – Make sure you are in a position to buy
Before embarking on this journey, make sure you can actually afford it. Like any other transaction, you will need to know what it is going to cost you. For property, some of the more obvious determinate factors are the location and type of property (land, semi or fully developed structure). Additionally, you will also need to get an estimate of incidental costs such as solicitors and surveyor’s fees, charges for registration of your title deeds etc. Seek advice from a reputable real estate agent, lawyer or someone who has purchased similar property of a similar type within the locale recently. Wait until you have sufficient funds available before making an offer to purchase. Pulling out of a deal halfway is a waste of time for everyone involved and you may have already incurred costs such as legal fees that you will be unable to avoid or recoup.
Step 2 – Identify property
Engage the services of a reputable real estate agent to identify and advise on suitable properties in your preferred area and within your budget. Numerous factors will affect what property you choose to purchase, and it is best to seek advice before committing large sums of money to any project. For instance, when purchasing a property for investment purposes, you will need to make sure that the property identified is commercially viable; Some areas will offer greater potential return on investment for smaller-scale development rather than larger-scale development.
Step 3 – Open lines of communication with the vendor & inspect property
At this stage, a purchaser or his agent must ask pertinent questions, including age of the property, why the owner is selling it and how long it has been on the market. The answers to these questions will inform your decision to make an offer or the size of your initial offer. You will want to personally inspect the identified property to make a final decision. Question neighbours, ask about access to utilities, incidence of criminal activity etc. It is not too early to conduct some preliminary due diligence. For land particularly, immediate neighbours often have valuable knowledge and insight as to the property’s root of title (history of ownership).
Step 4 – Have the property valued
Seek permission from the owner to have the property valued. Engage a quantity surveying firm in this regard. Although your offer need not adhere strictly to the open-market value, it is still best to be aware if you are paying above or below market value and if so, by how much. In any event, the valuation report will inform the size of your initial offer.
Step 5 – Make an offer and crystallise the terms of the transaction
Make an offer to the owner through your agent (he or she is supposed to be skilled at negotiations). Generally speaking, in Sierra Leone, you will find that vendors set an asking price which is between 10-15 percent more than their final price. Act accordingly; don’t be afraid to make an offer which is far lower than the asking price. If your offer is accepted, the other important terms of the transaction must be crystallised at this stage. It is always better for payment to be staggered even if the full amount is readily available. You must decide what the amount of the deposit will be (10% is standard). You must decide when the deposit and the other payments will be made. You must decide which party will bear the incidental costs, including agents’ fees (usually each party pays its own agent), conveyancing fees (usually borne by the purchaser) and tax (payable by the vendor).
Step 6 – Instruct solicitors
Before committing to a transaction or making any payment, instruct solicitors with respect to the transaction. Your solicitors must conduct a legal due diligence exercise in respect of the property, ensuring that the vendor is actually capable of disposing of the legal and beneficial title to the property. This would include verifying that the property is registered, that there are no legally registered competing titles and that the property is free from any encumbrance (such as a legal mortgage or lease). This is a very important step which you cannot afford to skip. Failing to conduct this exercise would expose you to significant financial loss and litigation. If you are in the clear, you can proceed to instructing your solicitors to go on to draft a title deed – usually a conveyance – in respect of the transaction. If the vendor is represented, title deeds will be exchanged between your solicitors and the vendor’s solicitors until it accurately reflects the intentions of both parties and is ready to be signed.
Step 7 – Do structural/land survey
If buying undeveloped land, you or your solicitors should engage a reputable land surveyor to produce a survey plan. If the property includes a building, you need will need both a survey plan as well as a structural survey. A structural survey will be done by a structural engineer who will do a full assessment of the building and produce a report on the state of the building (structural integrity, damp, woodworm, drainage, timber condition etc.) and what work is needed, if any. It is very important and highly recommended that you do not skip this step. Conducting a proper structural survey could at best avert building collapse or at the very least inform the size of your initial offer.
Step 8 – Finalise transaction
Once all documents have been produced and you are satisfied with the legal as well as structural status of your new property, it is time for you to make the final payments and for the vendor to execute the conveyance in your favour.