Buying a real estate property is one of the life dreams of many people worldwide. Most people work hard to save money for their dream homes. Others sell their old properties and use the money to buy a better property they like.
Just thinking about buying your first real estate property is exciting. However, looking for the “perfect” home for you is not a walk in the park. According to research, it could take more than six months for a buyer to choose a property. One of the reasons it takes a long time to purchase a real estate property is credibility.
Since it is a massive purchase, people take the time to assess whether the real estate agents they’re working with offer the best choices for their needs. Also, since scams are prominent in the real estate industry, it’s critical to be careful and check that the property is real before transacting with an agent or seller.
If you’re planning to buy a real estate property this new year, here are six listing scams you should look out for this 2023.
1 - Pre-construction and pre-selling scams
One of the typical real estate scams first-time buyers fall into is the pre-construction or pre-selling scam. What usually happens here is that scammers pretend to be real estate agents–or they pretend to be a company managing the pre-selling of a property. You might wonder, how do people fall into that trap? The answer is selling properties at affordable rates.
Usually, those rates are too real to be true. But since professional scammers are experts in conning people, it’s easy to sway first-time buyers. Sometimes it’s difficult to tell whether the details that a scammer is saying are legitimate or made up. And if you’re not well-versed in those things, it’s easy to believe false information.
The best way to avoid this scam is by looking into certified and reputable real estate developers. You can first inquire from them so you’ll know the precise process, requirements, and negotiation details that real estate companies have.
2 - Catfish listings
Catfish is the term used when someone creates a fake online account or uses another person’s picture as theirs to deceive others. Usually, people do this to date people they like or to pretend to be someone they’re not. Unfortunately, even in business, catfishing happens.
Many real estate scammers use catfishing to attract as many people as possible into inquiring and buying from them. They do this by using other people’s homes, other companies’ listings, and online Stock photos as theirs. Sometimes, they also edit the pictures to look like they’re used homes and to make them look slightly different from the original.
Sadly, it can be tricky to tell if a listing is legitimate. But there’s a simple and free tool you can use to verify. Of course, this could not be 100% accurate since scammers have a lot of tricks up their sleeves in conning people. If you want to check a photo, you can use Google Reverse Image Search. It will show you images related to or similar to your photo, and you can see the websites that use it.
3 - Double Sale Scams
Real estate scammers are intelligent people using their talents in the wrong ways. They’re clever enough to use one property listing to deceive not only one but up to two clients simultaneously. Double sale scams are prominent, and you can easily fall into this trap if you’re uncareful.
What happens here is scammers would list a property. Then, they’d entertain more than one potential buyer simultaneously to double their profit. In other cases, a double sale happens when an initial buyer fails to transfer the property title to his name then the seller takes advantage of it by selling it again to a different person.
If it happens, you’ll have to take the case to court. However, in most cases, the court will recognise the person as the property owner if the property is under his name, he possesses the title in good faith, or he presents the oldest title.
4 - Wire fraud scam
Another scam that is still prevalent today is the wire fraud scam. Scammers pretend to be professional real estate agents and then ask you to make down payments or wire money for reservation fees to their fake company account. It’s difficult to tell if you’re experiencing a wire fraud scam because scammers use special software that copies official real estate companies’ details.
Usually, it’s difficult and impossible to claim your money back under this scam. Since scammers use special software, it’s difficult to trace their location and activity. That’s why it’s best to consult with official realtors and companies before buying a real estate property. Most of the time, companies won’t ask you to wire money before processing the documents.
In short, don’t let your funds out of the basket without validating the property for sale and proof-checking its legal documents.
5 - Rental properties scam
One of the scams you can end up with if you’re uncareful is a rental property scam. What happens is scammers list rental properties for sale without disclosing the legal documents of the property. As a result, the person buying the rental property won’t have any property under his name.
Scammers usually list rental properties located in provinces. The rates of rental property scams are lower in the city than in rural areas. Similar to my previous points, make it a habit to validate the documents your agent will give you.
It won’t be fun to suddenly move in your home furniture and personal belongings to a “home” where you’ll find strangers staying in for a week or so.
6 - Lock-out agreement bait scams
Lastly are lock-out agreement bait scams. This scam is about making a prospective buyer sign agreements with vague terms and conditions that don’t allow them to back out of the negotiation process. Since the buyer has no way out, the scammer will then demand to pay unreasonable fees to move through the turnover process.
That’s why it’s critical to read and digest every term and condition that comes with a real estate listing. If there’s something you don’t understand, don’t hesitate to consult a lawyer or professional real estate agent for clarification. Again, it’s better to be safe than sorry.
Scams are inevitable, but you can always be careful.
No matter how much we wish scammers would stop, it’s better to accept that they’re inevitable. Unfortunately, the chances of crossing or seeing a scam are high. After all, technology has become a space where scammers aim to thrive. But then again, you can always be careful. When in doubt, don’t hesitate to back out of a negotiation process and never sign anything unless you’re confident that the listing is legitimate.
About the author:
Bianca Banda is a writer for Bennett Property, one of the largest and most successful real estate agencies offering a full range of property services, including sales, leasing and development.