Common Real Estate Scams
- August 19, 2015
Real estate scams are a big problem in today’s real estate market largely because most clients on their part are always in a hurry to conclude transactions without taking time out to carry out their due diligence. It’s usually never a difficult task spotting a legitimate or fraudulent opportunity in real estate transactions.
Many a time when a deal seems very attractive based on price and location then that is the perfect time to do your due diligence irrespective of what the agent or who so ever is in charge of the property says. In most cases it is better to get referrals from people you trust.
The most advisable way to get started in a real estate transaction is, start out with a reputable estate firm or a reputable legal firm especially if that opportunity seems too good to be true. Working with a reputable real estate agent can be a great way to avoid the most common types of real estate scams but there are other things you can do to protect yourself.
Let’s start by identifying the most common real estate scams you may face while either searching to buy a house or rent a house then talk about a few ways you can protect yourself from being scammed.
Renting Off Plan
This is a very common instance where you see a building undergoing construction; you contact the agent or owner and then they ask you to pay part or in some cases the full rent in order for them to do the completion of the house at a quicker pace so you can move in.
Out of desperation to outdo the competition you quickly make payment. After you have done this you discover that these agents have collected money from several other people under this pretense. At the end of the day, you lose the property and in most cases, your money as well.
Agents without a Registered Office Address/Paying into Agent’s account without owner’s written authority
A situation whereby you contact a property agent by phone and he says you can meet at a restaurant, this agent obviously does not have an office. He takes you to see a property for rent and tells you the apartment is vacant. When you show interest, he tells you that you can pay directly into his account. Out of desperation, you do so. Next day, his phone is off permanently.
Buying a property without proper investigation
For example you see a house for sale, make contact with the supposed agents in charge. You are given property documents that you haven’t verified or sighted the original and then go ahead to pay. Thinking you have become the owner of the property you find out down the line that the property is encumbered (owner might have taken a loan with the originals or the document itself is a fake or worse still the owner owes millions in land charges to the state government)
Watch out for my second article on more common real estate scams and tips on how not to fall victim. Have a pleasant day at work.