The dangers of land with flexible payment are numerous, especially those ones that tell you to buy two and get one free. Usually, when something sounds too good to be true it is probably not true.
If a company does a promo of this nature, it doesn’t necessarily mean that you are going to get a free plot of land when you buy 2 plots. What this implies is that they’ve incorporated some cost of the original purchase or transaction you made into the cost of the supposedly free plot of land you will get even if it is just the break even cost of the free plot on the two plots of land you are paying for.
Ordinarily, it is expected that a company that runs this sort of promo has done their homework well, and calculations have been made on the cost implications of such transaction, invariably, that promo would be a success.
Nonetheless, there are quite a good number of juicy promotions that will appeal to the average Nigerian, still you need to be wary of such promo, because those spearheading the promotions probably don’t even know what they are getting themselves into.
Some companies promise three trips of sand, ten bags of cement e.t.c. Now, the problem with such incentives is that the cost control of building materials, especially cement is not dictated by the said company.
The prices may change in the next 1-3 years, considering the fact that a lot of these transactions are transactions you will get into this year but will take you another 2-3 years to complete payments, correspondingly, that’s just about the same time you begin to reap the dividends of the things promised.
Simply put, let’s say you start buying land in 2016, then it takes you another three years to complete your transactions. So, in 2019 you seal the deal, and that is when you will be given the cement, Iron rods, sand and the survey you were promised.
Assuming the prices of the building materials has skyrocketed by then, there is therefore every likelihood that the company won’t be able to sustain such promo or redeem the pledges they made. An unfortunate occurrence, yeah?
Indeed there have been many situations like that where companies were not able to fulfill their promises because of the fluctuating prices of the building materials. So I say again, when someone is promising you what seems too good to be true, it is most probably not true.
However, such situations may not always be as a result of an urge to rob you of your hard-earned cash. It may arise from a lack of experience and knowledge and not necessarily that the company is out to swindle the client.
Hence, there is a need to watch out for the red flags in any real estate transaction, but that doesn’t mean when you see a need to jump at a life-changing offer that gives you some level of assurance you shouldn’t mileage on it.
MD/CEO Realty Point Limited