Don’t Get Scammed: Five Ways to Identify Real Estate Fraud
Don’t Get Scammed: Five Ways to Identify Real Estate Fraud
Land is a crucial commodity craved by men, organizations, and countries. We all understand the joy of freedom, ownership, and being in control of a space that is eternally or momentarily ours. So, it comes as no surprise that real estate fraud is on the rise.
The perpetrators are often land owners, real estate agents, and property developers, preying on unsuspecting buyers who may not be well versed, on the proper steps to take before committing to pay for a property.
In Lagos, for example, 50 cases of fraud were adjourned for further mediation, while 40 were referred to concerned agencies, with another five cases pending in Gbagada, Ketu, Ajah, Yaba, and Ikorodu courts.
Have you been a victim of estate developers who make false promises but fail to deliver?
Or maybe you got your fingers burnt when you paid a sum to an agent who has swindled several other victims selling or renting out the same land or apartment.
Either way, this article hopes to show you five ways to identify the fraudulent predators lurking in the real estate development community. Several tips on how to avoid these miscreants are also included.
5 Ways to Identify Real Estate Fraud
Wading through the murky waters of property ownership in a hostile clime requires a measure of vigilance, knowledge, and caution. Here are a few pointers to look out for:
1. Pressure To Make a Financial Commitment
One of the red flags to look out for when seeking to acquire a property is a persistent, almost forceful demand for a down payment, as a means to tie down the property. Whenever a seller, be it an agent or a property developer, consistently makes such a demand it is advisable to back out from such a deal.
Do well to resist all gimmicks that suggest that the said property is a rare commodity, that is being sought after by many willing buyers. In the case of a rented property, some may even offer you the incentive of handing you a key that will allow you to start moving your property into the building. Do not fall for this and do your due diligence before making any commitment.
2. Absence of sufficient paperwork
The absence of proper paperwork for any transaction screams danger. Being issued receipts for the purchase of basic commodities is a norm, so for a major undertaken like a property ensure that you acquire access to all necessary documents.
Some of the documents that must be provided by the property seller include:
- Survey Plan: The survey plan shows an aerial view of the land showing its dimensions and land boundaries at a glance. It also bears other information such as the Owner’s Name, Address of the Land, Size of the land, the name of the surveyor, and the date of the survey stamp.
- Deed Of Assignment: Another important document is the deed of assignment. It is an agreement between the buyer of the real estate property and the seller. It serves as evidence of the transfer of ownership, title, and rights to the buyer. A follow-up procedure of recording the deed assignment to the public land registry is essential to serve as a form of legal proof.
- Certificate Of Occupancy: The Certificate of Occupancy is a document that shows the identity of the current owner of a piece of land or property. It is one of the most asked for when buying a house. It is issued by a local government agency or building department, attesting to a building’s compliance with applicable building codes and other laws and indicating that it is fit for occupancy.
3. Request for payment in cash
Watch out for land owners and real estate agents that demand payment in cash. Ignore every attempt to justify this request as transactions made with cash payments are not traceable. This makes it easier for them to cart away your money and leave you high and dry.
Online transfers, paying at a bank, and issuing a cheque can come in handy when things get ugly. Instead of paying in cash, it is advisable to write checks or pay at the bank because your teller or online receipt will include the name of the receiver and the amount paid.
4. The promise of unrealistic returns and bogus offers
If the offer sounds too good to be true then it is probably too good to be true. Don’t get swayed by mouthwatering offers like cheap rent, boycotting associated fees, and returns on investment packages that promise too much.
Unsolicited offers are frequently too tempting to pass up. Carefully consider your options, if the offer promises a quick return on your investment, as it may be risky. Do not be easily convinced if fraudsters attempt to assure you on the safety of the investment is certain. Big returns are always accompanied by significant risks. As they often say, there is no shortcut to success.
5. Absence of a Track record
When buying or renting a property it is crucial to verify the identity of the organization or individual you are transacting with. Dealing with shadows and proxies only makes you more vulnerable to swindlers. Make sure that the agent, realtor, or homeowner you are dealing with is a real person, and be certain they are who they claim to be.
Double-check and verify, websites, and official addresses as most real estate fraudsters lack a solid track record. Deal only with companies and individuals who have a standing in the real estate market, and possess clean track records with years of proven experience.
How To Avoid Getting Scammed
Knowing how to identify fraudsters in the real estate sector is not enough, you also need a foolproof plan on how to avoid them and protect your interest. Here are a few ways to avoid getting scammed:
Get A Lawyer
Yes, Lawyers are expensive, but they understand the terrain better than you do. They also know the questions to ask before, during, and after you acquire a property and how best to avoid loopholes and bottlenecks. Employing the services of a lawyer guarantees your safety.
Never skip Inspection
In most cases, during the period of negotiating for a property, it is expected that you will be offered a trip to inspect the site. This allows you to see what you are paying for to decide whether or not you are going for the property.
Do not pass up this opportunity. Verify the current state of the property and know the adjustments you may need to make (if it’s a rented apartment).
You must ask as many questions as possible before making any financial commitment. For properties that are being developed, several fees may need to be paid even after paying the full stated amount for a property. These fees sometimes run into millions of Naira.
These additional payments may not be mentioned by the agent or real estate company only for them to ambush unsuspecting buyers after several monies have been paid. Asking questions allows you to understand what you are getting into from the onset.
The real estate sector provides amazing opportunities, long-term returns, and financial security. As a result, it attracts both the pleasant and the unsavory, hence, navigating safely requires great caution. Understanding the procedures involved in home ownership, employing the service of a legal counsel, and asking the right questions are ways to keep yourself safe.
Wow….nice write up
A very interesting write up