Real Estate Investing
MODULE 2: Real Estate Mistakes and Frauds, Lesson 1
How to avoid property fraud?
Adnan Ul Haq
Module 2:Real Estate Mistakes and Frauds
How to avoid property fraud?
Adnan Ul Haq
Investing in properties or real estate is a long-term commitment. We want you to have your investment as secure and stable as possible so that it can grow with time like any other valuable asset would do!
We're here for one reason - To make sure that everyone's investments profit them when they need them the most and to make you aware of all the property frauds that can hinder this goal.
Let us begin with the major types of property fraud.
Hiring a trustworthy agent is the best way to avoid being scammed. They want an easy commission and will take your money away from you if you're not careful with your research. So doing some homework first can save both time and cash in this type of situation!
The overseas Pakistanis are trapped by the wrong information they receive from fraud agents. For example, agents create a fake listing of already sold property and sell them to overseas Paksitani for less amount. These overseas nationals get trapped because there is no actual property available. Due to this, all their money is lost.
Do yourself a favor and only go through websites that provide verified information. Don't waste time or money on unverified sites - they can't be trusted!
Some people may try to take advantage of you by fraudulently claiming ownership or management over the property. Before making such a large investment, it's important to know the people to whom the property actually belongs - especially if they're associated with your purchase in some way!
It is important to know your sellers and what they offer before making a purchase. You can save yourself from being taken advantage of by conducting some checks beforehand!
When you buy land, it should be joint ownership with both parties, which share the profits of land if it is sold. However, fraud agents often change this allocation so that they get more than what was originally agreed upon. Moreover, in some cases, all of your investment may end up going towards the clever agent due to the wrong allocation on the document. So you must read and check each document before signing them.
Sale Agreement Frauds
Making an agreement with someone is never easy, but if they don't meet their end of the bargain, you're left hanging. For example, you agree to pay them 20-25 Lacs for something that isn’t delivered or fulfilled on time, so then all your money would go down the drain!
To avoid any future complications, it is important to read the agreement carefully and seek legal help if needed.
When buying a property, make sure that the title is clear and up-to-date. If there are no titles, or if the property is not transferred in your name solely, then you'll need legal help to secure this purchase before moving forward with it!
Many of the overseas properties face problems caused by unclear documentation of ownership.
You should always be cautious when buying property as the price may not match what you think it is. This can happen if someone offers to buy your house for more than it is worth. They might do this just to break your original buyers' interest.
For example, a house may be of 1 crore, but the fake buyers may bid more, and you get it at 2 crores. So you lose your money due to fake buyers.
Beware of fake document fraud. Get your documents checked through a certified lawyer. We all know that real estate is a competitive market, and there are plenty of people looking to take advantage.
You should always do your research before putting money into anything, including buying property or selling existing properties on the market.
You should never buy property without having seen it first, especially if there is any chance that the seller might be fraudulent or trying to swindle you out of your money. Always do research on a company and make sure everything checks out before wiring anything over.
False Communicated Market Value
Sometimes the buyer doesn’t communicate correctly and conveys the wrong information related to:
- Market Value
The most effective way to avoid any wrong information is by getting all of it in writing and setting up conditions for penalties if there are errors.
Plot Lottery Fraud
If you receive a call from someone claiming that they have won the lottery and need to know your credit card number in order for them to transfer all of its funds, please ask questions. Or if they ask you to send some registration fee, it is also a scam.
It's most likely an automated fraud trick designed by criminals who want access to your money!
Power of Attorney Fraud
Giving someone power of attorney means that they're in charge and can make decisions on your behalf. However, if you give any person this authority, make sure he/she is a reliable person and will never sell your asset for his own benefit or greed. Never do so without fully knowing each party’s expectations from one another!
If you plan on purchasing any land, make sure that it actually exists and has not been sold fake. This is important because there could be legal issues if the sellers are lying about its existence. Go for a visit on-site yourself and then make a decision.
You might become a victim of bank fraud! The lower interest rates that they advertise are actually not true. You should always read through all documents before signing them. It could save you from getting scammed and paying more than necessary for your loans or mortgages.
When you buy a property, it's important to check for any cases on the land. You can do this by going straight away to your local registry office and looking through all litigation records that may be related.
The title of your property is important. If you want to sell it, make sure that the name on file is the same as registered in local registry office records. So there are no problems later down the line when someone asks for proof from an auction house or elsewhere.
Haq Shaffa Frauds
It's always best to get permission from your neighbor before buying property. You can avoid any potential disputes by checking with them and making sure that they don't object, but you should also check the Haq Shaffa beforehand.
Property scams are a huge problem in today's world. Make sure to perform proper due diligence when you are about to invest in property. Make sure to go through these tips, so you'll be safer than ever when it comes to avoiding any kind of property scam!