Introduction
Buying property is one of the most significant financial decisions you’ll ever make. While the process may seem daunting, understanding the power of an initial deposit can transform your property-buying journey.
This crucial first step not only secures your desired property but also sets the tone for your financial commitment. Let’s explore why the initial deposit is so powerful and how it benefits you when buying property.
What is an Initial Deposit?
An initial deposit, also known as a down payment, is the amount of money a buyer pays upfront to secure a property. This payment is typically a percentage of the property’s total price and acts as a demonstration of the buyer’s commitment to the purchase.
An initial deposit also demonstrates your commitment to purchasing a property. This deposit reserves the property under your name and signals to the seller that you’re serious about the transaction. It’s often the first binding financial action in the property-buying process.
ATTENTION: If you want to own property in Nigeria and want to leverage on initial deposit. Please send us message below.
The Benefits of an Initial Deposit
1. Securing the Property
With the power of an initial deposit, you can secure your property while giving you the liberty to spread the payment across several months.
2. Strengthening Your Negotiating Position
Sellers are more likely to favor buyers who can provide a substantial deposit. It signals financial readiness and commitment, giving you leverage during negotiations.
With the help of an initial deposit, negotiating property prices will benefit you.
3. Lower Loan Amounts and Interest Rates
A larger initial deposit reduces the amount you need to borrow. This not only lowers your monthly repayments but may also help you secure more favorable interest rates from lenders.
For civil servants or corporations who want to buy property and don’t have the bulk money at once. With the deposit you have, you won’t need to borrow much and it will definitely reduce your interest rate.
READ THIS: 7 BENEFIT OF BUYING CORNIER PIECE PROPERTY
4. Building Equity from Day One
Your initial deposit immediately establishes equity in the property. This equity is an asset that can grow as property values appreciate, providing a financial buffer for future endeavors.
Initial deposit helps you to make more money when you buy a property before it appreciate in price. With this, you are buying it more cheaper before it get increase.
5. Demonstrating Financial Discipline
Saving for an initial deposit requires planning and discipline. You become more financial discipline because you know that there is portion of money you are to set aside monthly to pay off your property.
Why You Should Leverage on Initial Deposit When Buying Real Estate?
1. It Protects Your Investment From Price Increases:
Buying a property with down payment prevent you from price increase. So to lock down any property investment, you need to levarage on the down payment or else you will either miss out or you buy at an higher rate.
2. It Increases Your Offer Credibility:
Yes, initial deposit enables you to enjoy an offer with the seller. In case of property negotiation, you need to quickly show your seriousness by making a down payment or initial deposit for that property.
READ THIS: THE PARLIAMENT – PREMIUM ESTATE BY THE NEW LEKKI INTERNATIONAL AIRPORT
3. It Makes You a Property Owner:
The first step to become a property owner is by making an initial deposit. Bear in mind that, initial deposit secure your property but full payment gives you possession and allocation of the property
How Much Should You Deposit When Buying Property?
While the ideal deposit amount varies, some real estate companies recommend at least 10-20% of the property’s value. A higher deposit often leads to better financial terms and reduced overall costs.
I recommend that you sometime pays above the initial deposit to ensure smooth subsequent payment of the property. For example, if a property initial deposit is 10 million naira, you can decide to pay 15 million naira for easier transactions.
How to Sustain Your Investment After Initial Deposit?
Fingers are not equal. In mky real estate journey, I have seen investors paying a property one time off. And have seen some people spreading their payment within 3 months and some 12-18 months.
If you are leveraging on initial deposit when you buy property, these tips below will help you to sustain it and it will help you to avoid “DEFAULT IN PAYMENT.” And note that, default in property payment, attract additional charges. So you need to avoid this completely.
– Set a Clear Goal
Determine the deposit amount needed based on the type of property you want and its price range. Always request for the initial deposit before making any property purchase.
– Create a Savings Plan
Automate your savings by setting aside a fixed percentage of your income monthly. You must have an income or a means that generate money for you.
– Cut Unnecessary Expenses
Trim down discretionary spending and allocate those funds toward your subsequent payment. To avoid default in payment, make sure you plan your expenses very well.
– Decide How You Want To Pay The Money:
How do you want to pay the money for the property you buy. Is it at a specific date of the month or is it every 3 months? It depend on you. If you are a salary earner, know how much you will be setting aside monthly.
ATTENTION: The first step to buy property is to leverage on initial deposit. You don’t need to break the bank before investing in real estate. Send a DM to investt in property either in Lagos, Ibadan, Abuja and in the East.
When Should You Secure a Property with an Initial Deposit?
Timing is everything in real estate, especially when it comes to making an initial deposit. Though an initial deposit can come anytime but it has come in at the right time. Don’t delay in making deposit when you have the means
1. When You’ve Found Your Dream Property
Once you’ve identified a property that meets your needs and budget, it’s essential to act quickly. The real estate market can be highly competitive, and delaying the deposit might result in someone else securing the property.
Also note that, why you are thinking or delaying to make payment, the property might be sold out or sales closed or have a new price. So once you identify a property that suit your needs, take action immediately.
2. When There is A Rush.
I have come to understand that, a property that is in rush or property that people are investing in don’t last in the market. This is the reason why we see property SOLD OUT within weeks and few months.
In such cases, securing the property with an initial deposit as soon as possible gives you an opportunity not to miss out if you love the property.
For example, there was a housing estate we launch on January 2024, then by February 2024, the property was SOLD OUT. Some miss out simply because they didn’t secure it with an initial deposit.
3. After Completing Due Diligence
Before making any financial commitments, conduct thorough due diligence. This includes:
- Inspecting the property if you can.
- Verifying ownership documents
- Ensuring the property is free from all Government Acquisition.
Once satisfied, proceed with the deposit to avoid unnecessary delays and missing out or buying at an higher rate.
4. When The Property is about to appreciate or When It Is On Discount or Promo
There will certain seasons that property will be discounted. Such seasons include Company Anniversary, Birthday of the owner, Festive Seasons, Independence Day, Children Day and any major celebration.
These seasons are best for you to secure that property with deposit because those prices won’t last at all.
5. When the Property Is On Pre-Launch Sales or Off-Plan Offers
Many developers offer discounts or favorable terms during the pre-launch or off-plan stages of a project. Securing a property with an initial deposit during this phase can save you significant money.
In fact, the best time to secure a property is when it is on prelaunch sales. At this time, don’t sleep on it if you like the property property.
What Are The Risks of Delaying the Initial Deposit?
- Losing the Property: Popular properties can sell within hours or days. Waiting too long might cost you the opportunity.
- Price Increases: Property values can rise due to property appreciation, rapid development, and building infrastruture and materials
- Sales CLose or SOLD OUT: When you delay, you might hear SOLD OUT or SALES CLOSED
How to Get Started With Your Initial Deposit By Owning The Property?
– Get Your Funds Ready
Yes, this is the first thing. DO you have the fund to secure the property? Get your funds ready.
– Understand Payment Terms
Familiarize yourself with the seller’s or developer’s deposit policies, including deadlines and refund conditions. In addition, you meed to know how many interest will be added if you are spreading for 6 months or 12 months respectively.
– Work with a Trusted Realtor
I am your good to go realtor you should reach out to. You need an experience realtor like me to guide you through the process of owning your property investment
Conclusion
The ideal time to secure a property with an initial deposit depends on factors like market conditions, financial preparedness, and property availability.
Acting promptly and decisively after conducting due diligence can make the difference between securing your dream property and missing out.
For further detaikls, please call or WhatsApp Peter at +234 901 509 4850 or click on the WHatsApp button on your sreen
