When purchasing a property, whether as a buyer or an investor, the process must be smooth and thorough to avoid being scammed and losing money. Scams in real estate can come in many different forms, and they can pose in the most “legal” of ways.
The following pointers and red flags will explain how to recognize and avoid fraud as you encounter various offers and companies while looking to purchase a real estate property;
- If a deal sounds too good to be true, it probably is not true.
Real estate scams are everywhere. Fraudsters don’t just target the elderly or naive. They take advantage of people who are trying to save money, who don’t understand the law, or who are desperate to sell their homes.
The FBI estimates that real estate fraud costs consumers more than $1 billion every year.
The scammer poses as the owner or property manager of a house for rent or sale, often using pictures from ads posted by legitimate owners or agents. They advertise it online at an attractive price, usually less than market value, and ask potential tenants to fill out a credit application or pay a deposit to “hold” the house while they’re out of town. Once your money is paid, they disappear.
- Make sure your real estate company has a license and a clean record.
Many real estate scams target people who are hoping to buy a new home. Some scammers will even go so far as to sell or rent out homes they don’t own at all, pocketing the cash and running before anyone realizes what has happened. Fraudsters may also try to sell doomed properties that are set for seizure by local governments or redevelopment agencies, or target innocent homeowners and businesses with properties under dispute.
- Do your research on the company you’re working with.
Check their website and social media pages. If there’s no online presence, it could be a red flag. Sometimes, you can find fake reviews online which make the company seem legitimate when, in reality, it’s not. Also, Beware of ads that look too good to be true. A common sign of fraud is when the company offers services at prices that are extremely low compared to other companies in the area.
If you’re looking to invest in real estate, you’ll want to work with a company that works exclusively in the field of real estate.
- Always ask for written contracts.
Verbal agreements are worthless in court — if something goes wrong, you have no written proof that the company promised you anything. Legitimate companies have no problem giving you copies of their contracts and agreements. Every agreement must be recorded and duly signed by both parties involved in the transaction. This document should also include all relevant details about the transaction including the purchase price, interest rate, and other fees. If this contract does not exist or if it was made to look like something else (e.g a rental agreement), then it is likely that you are dealing with a fraudulent real estate company.
Do not pay upfront fees before getting any property documentation.
- Asking You To Wire Money With Suspicious Instructions
We’ll hit the hammer right where it fits with this first pointer. A very common behaviour of fraudulent businesses or companies is their embarrassing thirst for money as much and quickly as they can squeeze them out of you. It is wrong for you to be asked to wire money via a series of long and quite suspicious instructions without due legal documentation and process. You should not attempt to send money that has been asked through that method without your legal professional and bank account manager.
Inform your lawyer or bank manager of any emails you receive from a real estate company, especially those requiring you to make huge deposits – money wired to a fraudulent account is rarely refundable.
- Pressure To Buy The Property Fast!
Another tell-a-tale sign that you are about to be scammed is when you start getting pressured to make a deposit.
The process of acquiring a property in real estate is gradual because it is a big deal. Any loopholes will land an unsuspecting individual in big trouble, resulting in a massive loss of money. Plus, some dire legal consequences.
There are many reasons why a fraudulent real estate company will want to pressure you into buying a property.
One is that they are trying to sell a property that isn’t theirs. Another reason might be that they want to pass on the burden of dealing with the legal implications of buying a property. You surely don’t want that.
- Refusal To meet With You Face To Face
It is a known fact that the world has gone global to a high degree. However, some business deals are best conducted offline – and real estate is one of those things.
Real estate embodies land and housing property, and these components are very physical – you can not live in a house that is displayed only as a picture online. As such, you should be allowed to meet with the company agent you are looking to buy property from.
When a real estate agent you’re talking to declines appointments to meet up with inexcusable reasons, that is a pointer to look out for.
- Refusal To Inspect The Property With You
This follows the previous pointer, and it is a red flag that must be noted and avoided.
A real estate company is in charge of giving you a tour of your housing needs and that is their responsibility. You should not be told to go to a location or a property on your own without the agent in charge. You must watch out for this type of move because you might as well trespass and land in trouble of breaking into a property that you have no permission to access.
When that happens, you will have no answers to why you are there because you have little or no knowledge of the property in most cases. During a preliminary walk-over of a property, you must go along with a lawyer and your real estate agent. That’s how it should be.
- The Property Is Unusually Cheap
This is similar to the first point made above but deserves its section. Now, this is not to say that legitimate properties must be pricey to be considered real or legitimate, and a low price instantly indicates fraud. When shown a visual representation of a luxurious house, a land with a wide range of uses or rental property with well-crafted units and offered a low purchase price and many other “benefits”, resist the urge to think you’ve landed a big deal or your luck is playing out well for you.
You may just be heading for a really bad experience with the individual or company body giving out all that investment opportunity on a platter. What you should do in that situation is to go into full research mode and use all available resources like online search, ask family and friends, and be sure of the location and legitimacy of the property. Otherwise, consult your legal practitioner.
Housing properties are rarely out of season, and so are scammers whose aim is to strip unsuspecting individuals of their money.
When you are looking to be involved in real estate as a buyer, seller or investor, hiring a good lawyer and account officer is recommended to handle all matters involving legal documents and money.
You must always look out for these subtle signs of fraud and take your time regarding your real estate decisions.
Conclusion
Real estate fraud is a lengthy topic and an ever-present one, so many things about it are not included in this article. We have tried to give you as broad an introduction as possible to get you started. Hopefully, you will take some of the tips mentioned above and use them when working with a real estate company or agent. If you are in the market for real estate properties, contact our sales agents for your desired property. We have different house types including Duplexes with Penthouse, Duplexes, Semi-detached duplexes, Terraced buildings and Apartment buildings within Abuja Metropolis.
Call: 09030000313, 09030000323
Alternatively, you can visit our office at No. 11B Banjul Street Wuse 2, Abuja.
