Common Real estate scams that you should avoid

Meaning of Real estate

Real estate means property that exists in the form of lands or buildings. Many people consider real estate only for houses. However, even the complexes built for industrial or commercial purposes also come under real estate. Real estate also refers to the producing, buying, and selling of properties for business.

Real estate scams

The cheating cases that occur in real estate are real estate scams. These scams are more dangerous as the people who invest money in a house or land often fall into deep trouble. Real estate scammers use many methods to fool the buyers, such as false promises, possession delay, etc.

For example, a person wanted to buy a 3 BHK flat in a posh locality for his family of five. He then visits the posh locality where the builder offers flats for sale. Generally, a buyer will first check the quality of the house physically before going ahead with purchase proceedings.

But, in this case, the builder does not permit the person to check the flat. Instead, he shows the picture of a sample flat in the catalog. Then the person gets excited and buys the flat. However, after purchasing the flat, he realizes it has a lot of cracks and is defective.

Recognizing real estate scams

Real estate frauds are risky, and victims often commit suicide due to the gigantic losses they face in these scams. Hopefully, the red flags below will help people in identifying real estate fraud and ensuring safety.

1. Sellers selling the property in a hurry is a clear sign of fraud for the buyer. Buyers must stay away from these deals. These sellers may have personal reasons for closing deals in a hurry, but forcing the buyer to purchase a property without them taking a thorough check is simply unfair play.
2. You might also come across real estate deals that offer properties at rates lower than the property prices in the real estate market. These offers often tempt buyers. They are nothing but scams. Please note that no real estate offers properties at rates lower than real-estate market rates.
3. If the owner has his or her property documents, then it is proof of their ownership. Buyers should go through the property documents themselves or proceed through legal experts. Without this step, it is not right to trust any claim about property ownership. If the seller does not show any genuine property documents to the buyer, that itself shows hesitation and intent at cheating from the seller’s side.
4. Buyers sometimes may decide to buy properties in a non-regulated area. It may not be a good idea as the purchaser may fear losing their property title.
5. Scammers may use a power of attorney to sell the property to the property buyers. It is a strategy used by scammers to cheat buyers. In this strategy, the so-called representative of an NRI seller would convey to the buyer that his client (property owner) would not be present at the time of the property transaction as he or she could not travel. More often than not, It is a red flag.
6. A property seller who does not permit the buyer to visit the property at his convenience indicates fraud. If the seller is genuine, there should be no objection if the buyer visits or checks the property before finalizing the real estate deal.
7. If the property buyer contacts a property seller only through email or text, then that is something to think about. Indeed it is a sign that the buyer is fake.
8. Sellers may share only telephone numbers and email addresses as contact details to the buyer. In these cases, there is a high chance of fraud taking place.
9. When the buyer is purchasing a property, and if the seller cannot complete the paperwork process properly, it denotes real estate fraud.
10. A landlord may tell a tenant that he is out of the country and may ask you to send the rental amount to a foreign account. It is a sign of fraud.

Categories of real estate fraud

Many real estate frauds occur, and people fall victim due to ignorance. To educate and save people from these types of fraud, here are some categories of real estate scams mentioned below.

Title deception fraud

In a title deception scam, the ownership of the property is unclear. It means two scenarios where, in one case, a person may make fake papers of the properties, further selling them to real estate buyers. In another case, the scammer may pose as a power of attorney holder and may try to fraudulently put the properties up for sale.

Hurried sale fraud

A seller may try to hurry the buyer into buying the property. For example, the seller may say that there are only a few flats left and may ask the buyers to purchase it immediately. Tensed by those words, people instantly buy it without researching the property’s pricing. Generally, they set these prices very high. Scammers employ this strategy to hide the facts and reality of the property, thereby pushing sales.

Real estate possession delay fraud

In this fraud, a buyer invests money in a real estate property and does not obtain it. Instead, the possession of his or her property gets delayed not just for one day but for years altogether. It is the most common type of fraud occurring in the real estate field.

Rental scams

The renters look online for a house to rent. The real estate scammers provide a list of fake non-existent properties online to trap the renters into sending rental money to them. For example, a person who wants to rent a house may check out a rental site to find one. Then a scammer may post a fake offer of a home that is available for rent on that site.

The person comes across this offer and gets in touch with the scammer. Then the scammer convinces the person to pay the so-called advance rent. The person does as instructed by the scammer. When the time comes for the person to visit the rented house, that is when he/she finds out that it does not exist at all. Then he realizes that the scammer has cheated him.

Bait and switch scheme

In bait and switch schemes, the buyer comes across an advertisement that offers a property which is at a reasonable price. However, that advertisement also specifies that the buyer must invest more money than the price mentioned in the ad.

Conclusion

People looking forward to buying any property, be it land, building, apartment, independent house, and so on, should make sure to check before purchasing it. In addition to that, people must educate themselves and others about realtor scams and their red flags.