land contract

Can you actually buy land in Lagos or London without walking into a bank first? Yes, and a land contract is how many people calmly do it.

Here is the arrangement in plain terms. The seller agrees to sell you the property, but instead of you paying a bank and the bank paying the seller, you pay the seller directly, in instalments, over an agreed period. The seller keeps the title until you finish paying. Only then does the property legally become yours.

Say a man in Ibadan owns a plot worth ₦8,000,000 but does not want the stress of one buyer showing up with a suitcase of cash. He agrees with a young couple that they will pay ₦300,000 monthly for a set number of years. They move in, or start building, while payments continue. If they stop paying halfway, the seller can take the land back, because the title never left his hands.

This is different from a mortgage, where a bank is the one financing you and holds an interest in the property through a lender's claim. In a land contract, there is no bank at all. It is just you and the seller, and the whole thing rests on trust, a well written agreement, and both parties keeping their word.

People use land contracts when the buyer cannot get a mortgage, perhaps because of an irregular income or no long credit history, which is common for young professionals and for Nigerians abroad sending money home to secure family land through a relative acting as the seller's representative. It gives access, but it also carries risk, because if the paperwork is weak, a buyer can pay for years and still lose the property on a technicality.

The lesson is simple. A land contract can open doors that a bank would keep shut, but it demands an even sharper eye on the agreement, since there is no bank standing between you and a bad deal.