Pricing your home too high can scare away buyers because they may think it’s not worth the money. On the other hand, pricing it too low means you could lose money and sell for less than your home is really worth. So, how do you find the right balance?
To price your home correctly, you need to understand the local market; as yourself what similar homes in your area are selling for, the condition of your property, and the demand from buyers. Location also matters a lot, as homes in good neighborhoods with easy access to schools, roads, and markets usually sell for more. It is also helpful to get advice from professionals like estate agents or valuers who know the market well and can give you a fair price estimate. In this informative guide, we will show you how to get it right when pricing your home in Nigeria.
Uniqueness of the Nigerian real estate market
The Nigerian real estate market is a large and growing sector that plays a key role in the country’s economy. It is expected to reach a value of about $2.61 trillion by 2025, with residential properties making up the biggest part of this market. This growth is driven by Nigeria’s rapidly increasing population and the movement of many people from rural areas to cities, which creates a strong demand for housing.
Nigeria faces a big challenge with housing because there is a large shortage of homes. Experts estimate a housing deficit of over 20 million units, meaning many people do not have proper homes to live in. The demand for houses is growing faster than the supply. While housing demand grows at around 8% per year, the supply only increases by about 5% annually because of high construction costs, limited access to financing, and other difficulties. This imbalance pushes house prices up, especially in cities where many people want to live.
The government is trying to help by launching programs like the Renewed Hope Cities initiative, which aims to build thousands of affordable homes and offer flexible payment plans such as rent-to-own schemes. Still, the overall market remains competitive and challenging for both buyers and sellers.
Regional price variations within Nigeria
House prices in Nigeria vary greatly depending on the location. For example, Lagos, Abuja, and Port Harcourt are among the most expensive cities to buy property. Lagos, being the commercial hub and the most populous city, has very high demand but limited land, which causes prices to rise quickly—sometimes by 10-15% annually. Abuja, the capital city, is known for luxury homes and commercial real estate, attracting wealthy buyers and investors. Port Harcourt’s real estate prices are influenced by the oil industry, with high-end properties in demand.
In contrast, smaller cities and towns like Ibadan, Kano, and Uyo generally have lower property prices. These places are becoming attractive for buyers who want more affordable options and are willing to live outside major urban centers. Understanding these regional differences is important when pricing a home because the same house could be worth very different amounts depending on where it is located.
Factors driving real estate prices in Nigeria
Several key factors influence real estate prices in Nigeria:
- Demand: Nigeria’s population is growing at about 2.5% yearly, and more people are moving to cities. This creates a strong demand for housing, especially affordable homes for middle- and low-income families.
- Scarcity: There is limited land available in prime locations, especially in big cities like Lagos and Abuja. This scarcity pushes prices higher because many buyers compete for fewer properties.
- Speculation: Some investors buy properties expecting prices to rise, which can drive prices up further. This speculation sometimes leads to overpricing, making homes less affordable for regular buyers.
- Economic factors: Inflation, rising costs of building materials, and interest rates also affect prices. For example, when fuel prices go up, transportation and construction costs increase, which raises the price of building new homes.
What is home valuation and why it matters
Home valuation is the process of finding out how much your property is really worth in the current market. This means estimating the price a buyer would be willing to pay for your home if you decide to sell it today. Getting this right is very important because it helps you avoid two big problems: overpricing and underpricing. If you price your home too high, buyers may not be interested, and your house could stay unsold for a long time. If you price it too low, you might lose money by selling for less than it is worth. So, accurate valuation helps you set a fair price that attracts buyers and gives you a good return on your investment.
Methods of home valuation
In Nigeria, there are two common ways to value a home:
- Professional appraisal:This is when a trained estate surveyor and valuer—professionals registered with the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON)—inspects your property and uses their experience and data to estimate its value. They look carefully at your home and compare it with other properties to give you a reliable price.
- Comparative Market Analysis (CMA): This method involves comparing your home to similar houses that have recently sold in your neighborhood. By looking at prices of these comparable homes, you can get a good idea of what buyers are willing to pay. Adjustments are made for differences like size, condition, or special features to make the comparison fair.
Both methods help you understand the real market value of your home so you can avoid guessing or relying on emotions when setting a price.
Role of location, size, condition, and unique features
Several key factors affect the value of your home in Nigeria:
- Location: This is the most important factor. Homes in good neighborhoods with easy access to schools, markets, good roads, and security usually have higher values. For example, a house in Lekki or Victoria Island will generally be worth more than one in a less developed area.
- Size: Bigger homes or those with more land tend to be valued higher because they offer more space and flexibility for the buyer.
- Condition: Well-maintained homes that do not need repairs are more attractive to buyers and can command better prices. New or recently renovated homes usually get higher valuations than old or damaged ones.
- Unique features:Special things like a modern kitchen, a swimming pool, a large garden, or a good security system can increase your home’s value because they add extra appeal compared to other houses.
Research comparative sales (Comps)
Comps are recent sales of properties that are similar to yours in the same area. Looking at these sales helps you understand how much buyers are willing to pay for homes like yours, so you can avoid pricing your home too high or too low.
How to find and analyze recent sales of similar properties nearby
The first step is to find recent sales of homes that are like yours in your neighborhood or nearby areas. You can do this by checking online real estate websites, visiting local estate agents, or asking friends and neighbors who recently sold their homes. The key is to find properties that have similar size, type, and location as yours. For example, if you have a three-bedroom bungalow in Ikeja, you want to look for other three-bedroom bungalows sold recently in Ikeja or close by.
Once you have a list of these comparable sales, study the prices they sold for and note the dates of sale. Recent sales, ideally within the last six months to a year, are the most useful because the market can change quickly. This way, you get a clear picture of the current market value for homes like yours.
Adjusting for differences in property features and upgrades
No two homes are exactly the same, so after finding comps, you need to adjust for differences between your home and the others. For example, if a comparable home has a newly renovated kitchen or a swimming pool but yours does not, you should consider that the other home might sell for more because of those upgrades. On the other hand, if your home has a bigger land size or better location, you might price it higher than the comps.
Adjusting for these differences means adding or subtracting value based on the features. This helps you make a fair comparison. For instance, if a similar home sold for ₦50 million but had a swimming pool, and your home does not, you might reduce the price by a certain amount to reflect this difference. This step is important to avoid overpricing or underpricing your home because of unique features.
Using comps to set a realistic price range
After analyzing comps and adjusting for differences, you can set a realistic price range for your home. Instead of picking one fixed price, it is better to have a range that shows the lowest and highest reasonable prices based on the market data. For example, if comps show homes selling between ₦45 million and ₦50 million after adjustments, you might price your home within that range.
Setting a price range helps you stay flexible during negotiations with buyers. It also shows that you have done your homework and are pricing your home fairly based on real market information. This approach increases your chances of selling your home quickly and at a good price without scaring away buyers or losing money.
How to avoid overpricing
Overpricing means setting the price of your house higher than what buyers are willing to pay or what the market can support. This often happens for a few common reasons described below:
First, emotional attachment plays a big role. Many homeowners feel a strong connection to their property because of the memories and time spent there. This makes it hard to be objective, and they may think their home is worth more than it really is. Another cause is simple overestimation;sometimes sellers believe their home’s features or location make it more valuable than similar homes nearby.
However, overpricing has serious consequences. When a house is priced too high, it tends to stay on the market for a long time without selling. Buyers usually ignore homes that seem expensive compared to others, so interest drops. This can force the seller to reduce the price later, sometimes multiple times, which can make buyers suspicious or think there is something wrong with the property.
To avoid overpricing, it’s important to find the right price based on facts, not feelings. One way to do this is by looking at recent sales of similar homes in your neighborhood. This is called market research. You want to compare your home with others that have the same size, condition, and location. This helps you understand what buyers are actually paying.
Another useful step is to consult a professional estate agent or property valuer. These experts know the local market well and can give you a realistic price estimate. They can also advise you on how to present your home to attract buyers. Staying objective means focusing on market data and expert advice rather than personal feelings or hopes.
Check below for some simple tips to avoid overpricing your home in Nigeria:
- Do thorough market research: Check online listings, visit open houses, and ask about recent sales in your area.
- Consult estate agents: Get at least two or three opinions from trusted agents who understand your neighborhood.
- Be realistic about your home’s condition: If your house needs repairs or updates, don’t expect it to sell for the same price as a fully renovated one.
- Avoid emotional pricing: Try to separate your personal attachment from the business side of selling.
- Watch the market trends: If prices are stable or falling, don’t try to push your price up too high.
How to avoid underpricing
While seems like a quick way to attract buyers, underpricing can bring several problems thatcould hurt you in the long run; some of these problems are discussed below:
Risks of underpricing your home
When you set the price of your home too low, buyers may become suspicious. They might wonder if there is something wrong with the property or if you are desperate to sell quickly. This suspicion can reduce interest from serious buyers who might think the low price means hidden problems. Also, underpricing can cause you to lose money because you sell your home for less than it is worth. This means you miss out on the full value of your property, which is a big loss especially if you have invested in improvements or if the location is good.
Another risk is losing the chance to create a bidding war. When a home is priced fairly or slightly below market value, it can attract many buyers who compete by offering higher prices. This competition can push the final sale price above the asking price. But if you underprice too much, buyers may just accept the low price without bidding, and you lose the chance to get a better price.
When underpricing can be strategic
There are times when underpricing can be a smart move. For example, if you need to sell very quickly because you are moving, or if the market is slow and homes are not selling, setting a lower price might attract faster offers. It can also help in situations where you want to avoid long negotiations or reduce the cost of keeping the property on the market. However, this should be done carefully and with a clear plan, because underpricing without reason can cause financial loss.
When underpricing is harmful
Underpricing becomes harmful when it is done without understanding the market or the true value of your home. If you simply guess a low price to attract buyers, you risk selling for far less than your home deserves. This is especially true in cities like Lagos or Abuja, where property values can be high and demand strong. Selling too low can also affect your reputation as a seller and may make buyers question your intentions or the quality of your home.
Balancing competitive pricing without undervaluing your home
The best approach is to find a price that is competitive but still reflects the real value of your home. To do this, research similar homes in your area and see what they are selling for. Consider the condition of your home, its location, and any special features it has. You can also get help from a trusted real estate agent or a professional valuer who understands the Nigerian market well.
Setting a fair price will attract genuine buyers, avoid suspicion, and may even create a bidding situation that benefits you. It also helps you avoid long waiting times on the market, which can happen if the price is too high or too low. Remember, the goal is to price your home so that buyers feel they are getting value, and you get a fair return on your investment.
Importance of market trend and timing
Know the current market conditions: buyer’s vs. seller’s market
In Nigeria, the property market can be either a buyer’s market or a seller’s market. In a buyer’s market, there are more homes for sale than buyers looking to buy. This means buyers have more choices and can negotiate for lower prices. If you price your home too high in this situation, it might stay unsold for a long time. On the other hand, in a seller’s market, there are more buyers than homes available. This gives sellers an advantage because buyers compete to buy, often leading to higher prices. Right now, in many Nigerian cities like Lagos and Abuja, demand is strong due to rapid urbanization and population growth, which can create a seller’s market in certain areas. Knowing which market you are in helps you set a price that matches what buyers are willing to pay.
Seasonal impacts on pricing and sale speed
The time of year can also affect how fast your home sells and at what price. In Nigeria, the dry season (usually November to March) is often the best time to sell because people find it easier to visit homes and move around. During the rainy season, buyers may delay house hunting, so homes might take longer to sell. Also, festive periods like December can slow down sales as people focus on celebrations rather than buying property. Pricing your home competitively during slow seasons can help attract buyers despite these challenges. If you wait for the busy season, you might get better offers, but you also risk your home staying on the market too long if priced too high.
Adjusting pricing strategy based on market trends and timing
Because the Nigerian real estate market is changing fast, it is important to adjust your pricing strategy regularly. For example, rising inflation and construction costs have pushed property prices up in recent years, especially in big cities. If you set your price based on old market conditions, you might underprice your home and lose money. But if you ignore current demand and price too high, buyers will look elsewhere. You can watch recent sales of similar homes in your area to get an idea of the right price. Also, consider government policies, economic changes, and new housing projects that might affect supply and demand.
How you present your home can determine the price
The way a home looks and feels can change how buyers see its value. Good home presentation, including staging and keeping the house in good condition, helps you avoid pricing mistakes like overpricing or underpricing.
How staging and home condition affect perceived value
Staging means preparing your home to look its best for buyers. This can include cleaning, arranging furniture, and adding simple decorations to make the house inviting and attractive. In Nigeria, where many buyers first see homes online or during quick visits, a well-staged home creates a strong first impression. Buyers are more likely to feel positive about a home that looks clean, organised, and welcoming. This positive feeling makes them see the home as more valuable, which can justify a higher asking price. On the other hand, a home that is dirty, cluttered, or poorly arranged may seem less valuable, causing buyers to offer less or lose interest altogether.
Investing in repairs and upgrades to justify pricing
Before putting your home on the market, it is smart to invest in necessary repairs and small upgrades. Fixing broken doors, leaking taps, or cracked walls shows buyers that the home is well cared for. Simple upgrades like fresh paint, new light fixtures, or modern kitchen fittings can make your home look newer and more attractive. These improvements help justify a fair or higher price because buyers won’t have to spend money fixing problems after purchase. In Nigeria’s competitive real estate market, homes in good condition sell faster and often for better prices than those needing lots of repairs.
Presentation as a factor in competitive pricing
A well-presented home will always stand out from the crowd. When buyers visit several properties, the one that looks neat, stylish, and move-in ready usually wins their interest. This can lead to quicker offers and sometimes even bidding wars, which help sellers get the best price. Also, good presentation makes your home look more valuable compared to similar homes that are not staged or well maintained. This means you can price your home competitively but still attract serious buyers willing to pay a fair price.
Additional costs to consider when setting the price
There are some extra costs that can come with selling a home, and knowing these will help you set a realistic price so that you do not sell at a loss. These extra costs include agent commissions, closing costs, repairs, and upgrades. Also, you must understand how to calculate your net proceeds, which is the actual money you will receive after all costs; this will help you have clear expectations before selling the home. Some of these important additional costs will be discussed below:
Agent commissions
These agents help you to find buyers, negotiate prices, and handle paperwork. For their work, agents charge a commission, which is usually a percentage of the home’s sale price. Typically, this commission ranges from 5% to 10%, but it can sometimes be negotiated lower or higher depending on the property and the agent’s services. For example, if your home sells for ₦50 million, and the agent charges 6%, you will pay ₦3 million as commission. This amount is deducted from your sale proceeds, so you need to include it when setting your price.
Closing costs
Closing costs can include legal fees for preparing and checking documents, stamp duties, and other administrative charges required by the government or local authorities. These costs vary depending on the location and value of the property but can add up to a significant amount. It is wise to budget for these costs so you don’t lose money unexpectedly at the end of the sale process.
Repairs and upgrades
Fixing broken doors, repainting walls, or improving the garden can make your home more appealing. However, these improvements cost money, and you should include them in your pricing plan. Sometimes, small repairs can increase your home’s value enough to cover their cost, but expensive upgrades may not always give a good return, so be careful to balance costs and benefits.
Calculating net proceeds
To set a realistic price for your home, you should calculate your net proceeds. This is the money you will actually get after paying all the costs mentioned above. The formula is:
Net Proceeds = Sale Price – (Agent Commission + Closing Costs + Repair/Upgrade Costs)
For example, if you want to receive ₦40 million after all costs, and you estimate agent commission at 6% (₦2.4 million), closing costs at ₦1 million, and repairs at ₦600,000, then your sale price should be:
₦40 million + ₦2.4 million + ₦1 million + ₦600,000 = ₦44 million
This means you should price your home around ₦44 million to cover all expenses and still get your desired amount.
Why this matters
Failure to include the right amount of extra costs can lead to overpricing or underpricing. Overpricing can scare buyers away, while underpricing means you lose money after paying commissions and other fees. By including agent commissions, closing costs, and repair expenses in your pricing, you avoid surprises and set a fair price that matches your goals.
Negotiation Strategies you can apply for Pricing
Good negotiation will help you to avoid selling your home for too little or scaring away buyers by asking for too much. Here are simple strategies to help you handle offers, use flexible terms, and work with real estate agents to get the best deal.
How to handle offers below asking price
Sometimes, buyers will offer less than the price you want. This is normal in real estate, so don’t be upset or reject the offer immediately. Instead, take time to think about it. Ask yourself if the offer is fair based on the current market and the condition of your home. If the offer is too low, you can politely explain why your asking price is higher; maybe your home is in a good location or has recent improvements. You can also make a counteroffer, which means suggesting a price between your asking price and the buyer’s offer. This shows you are willing to negotiate but still value your home properly. Remember, being patient and respectful during this process can help keep the buyer interested.
Using flexible terms to close deals on competitively priced homes
Price is not the only thing you can negotiate. Sometimes, offering flexible terms can help close a deal faster, especially if your home is priced fairly. For example, you can allow the buyer to choose a convenient date to complete the sale or offer to include some appliances or furniture in the deal. You might also agree to cover part of the closing costs or fix minor repairs before the sale. These small adjustments can make your home more attractive without lowering the price. Flexibility shows you want to work with the buyer, which can lead to a quicker and smoother sale.
Working with real estate agents to negotiate effectively
Real estate agents are experts who know the Nigerian property market well. Working with a good agent can make negotiation easier and more successful. Agents understand current market prices and can advise you on a fair asking price. They also handle communication with buyers professionally, helping to keep negotiations calm and clear. Agents can suggest when to accept an offer, when to make a counteroffer, or when to hold firm. Because they have experience, they can spot serious buyers and avoid wasting time with unrealistic offers. Using an agent gives you confidence and increases your chances of selling your home at the right price.
Some of the common pricing mistakes you must avoid
Overpricing due to unrealistic expectations
Sometimes, the desire to get the highest price possible can cause you to setting a price that is much higher than what buyers are willing to pay. Overpricing your home can scare away potential buyers because they will compare your price with similar homes in the area and see yours as too expensive. When a property stays too long on the market without selling, buyers may think there is something wrong with it. This can make it even harder to sell later.
Ignoring market data and trends
Prices change every time in real estate, depending on the location, demand, and economic conditions. If you ignore recent sales data or current market trends, you might price your home too high or too low. For example, if many similar homes in your neighborhood are selling for a certain price, setting your price far above or below that can reduce your chances of a quick sale. It’s important to research recent sales of similar homes and understand the market before deciding on a price.
Neglecting to update pricing based on market feedback
If your home is not attracting offers or viewings, it is a sign that the price may be too high. Ignoring this feedback and refusing to adjust your price can cause your home to stay on the market for months. Being flexible and willing to lower your price after some time can help attract more buyers and lead to a successful sale.
Failing to consider additional selling costs
These costs can include. If you don’t factor in additional costs, like real estate agent commissions, legal fees, taxes, and other charges like stamp dutyinto your pricing, you may end up with less money than expected after the sale. It’s important to calculate all these expenses beforehand so you can set a realistic price that covers your costs and still gives you a good profit.
Tools and resources to help you sell better
Access to the right tools as a property seller can help you to better understand the market, compare your home with others, and get a fair price. Some of the main tools and resources you can use are highlighted below.
Where to find reliable market data and comparable sales in Nigeria
To price your home correctly, you need good information about what similar homes in your area are selling for. This is called comparable sales or “comps.” In Nigeria, reliable market data can be found from several sources as follows:
- Nigeria National Bureau of Statistics (NBS): This government agency provides official data on housing and the economy. Their reports include information on property prices and trends across Nigeria.
- Nigeria Mortgage Refinance Company’s housing market information portal: This portal offers data on affordable housing and finance markets in Nigeria.
- Real estate market research websites: Platforms like Estate Intel provide detailed data on historic property prices, vacancy rates, and market trends in Nigerian cities.
- Reports from real estate companies: Some companies publish annual property price index reports, such as BuyLetLive’s Nigeria Property Price Index Report, which tracks price changes in major cities like Lagos, Abuja, and Port Harcourt.
The sources helps you see how much homes like yours have sold for recently, so you don’t guess the price blindly.
Professional services: real estate agents, appraisers, surveyors
Another important resource is professional help. These experts know the local market well and can guide you to price your home fairly. Some of the professional service providers are:
- Real estate agents: They help sell homes and have experience with local prices. Agents can give you a market analysis showing what buyers are willing to pay.
- Appraisers: These are professionals who inspect your home and give an official value based on its condition, size, location, and market trends.
- Surveyors: They assess the land and property details, which can affect the value. Surveyors ensure your property boundaries and measurements are correct.
Hiring these professionals will usually cost you some money, but their advice can save you from pricing mistakes that could delay your sale or cause you to lose money.
Online platforms and listings for price benchmarking
Today, you can use online platforms to check property prices in Nigeria. These websites list homes for sale and rent, showing asking prices and sometimes recent sales. You can use them to compare your home’s features and prices. Some of these online platforms are highlighted below:
- Property websites like PropertyPro, Jumia House, and BuyLetLive: These platforms have thousands of listings across Nigeria. You can search for homes similar to yours in your neighborhood and see their prices.
- Real estate marketplaces: Some platforms also provide market reports and price trends, helping you understand if prices are going up or down.
- Social media and real estate forums: Sometimes sellers and buyers share information about prices and market conditions, which can give you extra insight.
The online listings helps you benchmark your home’s price against what is currently available in the market. This way, you avoid setting a price too high or too low compared to similar homes.
Conclusion
The information provided in this guide would have opened your eyes to the importance of setting the right price for your home when you want to sell it. If you set the price too high when selling your home, buyers may not be interested, and your home could stay on the market for a long time. If you set it too low, you might lose money and sell for less than your home is worth. We have mentioned several helpful tools and resources in this guide that can help you to get it right when setting a price for your home. You can check reliable market data, talk to real estate agents or appraisers, and look at online property listings to see what similar homes are selling for. By doing this, you can find a fair price that matches the current market so that your home will not be overpriced or underpriced. Remember, pricing your home correctly helps attract serious buyers and makes the selling process smoother and faster. Taking time to research and get advice will pay off in the end.
