Real estate is a rapidly growing industry. Because of this, the industry is not safe from various scams lurking around.
If you are thinking about investing or venturing into real estate, take note of these most common scams that have become rampant in the industry.
- Online Sale Scams
The first step most property hunters take is to look at the internet and search for properties that are for sale. Unfortunately, this is also the place where scammers are rampant.
Their modus is to look for an enticing property, most of which they can easily have access to, and post the details online. Once interested buyers start contacting them, they often ask for tour fees, reservation fees, or the like. This is where the danger starts. If the seller asks you to give them money even if you have not yet seen the property yourself, do not engage.
The best thing to do to avoid this is to hire the services of licensed real estate agents whose job is to ensure that the property you saw online is legitimate. They perform various background checks and secure all documents to verify if the real owner has indeed posted their property for sale.
- Title Fraud
Although this type of scam is not so rampant compared to the previous one, it can yield great disaster for buyers. This modus involves that the scammer falsifying documents to make it appear as if he or she is the legitimate owner.
Once the buyer enters the engagement, the scammer leads him or her to apply for a new loan to finance the property, and the loan must be paid to the fake owner’s name. Once the loan has been approved, the scammer runs away with the cash, thus leaving the buyer with all the remaining payments.
To avoid this scam, you can avail of title insurance, which can shield you from fabricated documents that scammers may provide.
- Unreasonably cheap properties
As much as we want to stay away from expensive properties, it is equally important to stay away from unreasonably cheap properties. Although the seller is legitimate, their most common practice is to entice the buyer to a low-priced property so that the latter can buy the property the soonest.
The danger behind this scam is that the seller does not disclose everything about the problems related to the property. There might be some creeping structural defects or unresolved property conflicts still in court. These problems will only start to surface once all documents have been signed and by this time, the seller or the original owner is nowhere to be found.
To avoid these types of scams, do a background check on the property and the community it is located in. You can ask neighbors around if they think that the property is worth it’s price.
In today’s time where scammers in real estate have seemingly become cleverer, it always helps to engage the services of experienced professionals who can counter the modus of these scammers. It is equally important to protect your investments with insurance. Remember that if the deal seems too good to be true, then it probably really is.