How to Spot and Prevent Real Estate Frauds
In real estate market, rule of thumb is: If something is too good to be true, it probably is.
Like other premier industries, the real estate sector attracts heavy investments; that is enough to entice fraudsters hoping to con would-be investors. Remember, frauds abound at all levels so it becomes hard to know when there is a legitimate opportunity and right time to invest your hard-earned money in realty sector. Working with reputable real estate portals can be a great way to avoid fraud but there are certain other things, you can do to protect yourself. Let’s begin by identifying the most common real estate scams and the ways you can adopt to protect yourself from being scammed.
Title Deed Fraud
Though it is not so common yet it is one of the most devastating real estate frauds. It starts with the identity theft, when a fraud person uses duplicate (yet false) property documents to appear as a property owner, and attempts to sell that property ahead. Sometimes after securing some percentage of total amount and sometimes after getting full payment, they vanish and leave owner on the hook.
Every property owner must know how to protect himself against identity theft and every property buyer should not purchase without thoroughly inspecting the legal status of the property.
Overseas Property Investment Fraud
Buying an overseas property is new global trend. However, investing without conducting a thorough research can open ways for potential fraud. Few fraudsters put up fake listings of luxury properties on international property portals to attract overseas investors. Once you contact those property owners, they get agree to show you property only after you sign a contract or deposit a particular amount in advance.
Never invest in overseas property without paying personal visit in advance or conducting thorough research. Professionals suggest taking legal advice from your lawyer and make offer, only after being cent percent sure.
Land Development Fraud
Besides being cautious about big investment, property investors should also be alert about smaller level frauds as well. It happens in different ways such as, when a reliable property developer inaugurates a new housing scheme without allocating specific land and asks potential investors to invest in scheme. Believing the previous reputation, people purchase property files or forms blindly but keep on waiting for land development, plots allocation and balloting – that never happens. Moreover, few reputed developers are also there, who launch new residential society or introduce a new phase in the existing society with proper land allocation to entice potential investors to invest in real estate. Most of the potential buyers invest after seeing the land acquisition status and after that, the endless process of installment begins. Later on, the developer does not pay attention to the development work and land remains barren and unestablished. People keep on waiting for the development work to begin so that they can get to know about their plots for years. Once the money changes hand, you will probably never see those developers or land development there. It is one of the most devastating kinds of fraud in real estate market.
To avoid this kind of fraud, professionals suggest buyers to check references from concerned land departments, reliable online portals and ensure that the developer has a reputation for fair dealing and quality work delivery. Always invest after taking advice from legitimate real estate agents.