How to avoid real estate scams

The real estate industry, like everything else, is full of scams. Scammers often target both buyers and sellers, taking advantage of their desire for a good deal or their lack of knowledge about the real estate process, which is why it is highly recommended that you use reputed and experienced real estate companies in Sri Lanka for your land, housing or commercial property for sale. Here are a few common scams in the industry:

●      Foreclosure scams: Scammers may approach homeowners facing foreclosure and offer to save their homes by transferring the property title or charging upfront fees for loan modification services. In reality, these scammers do not provide any legitimate assistance and can leave homeowners in a worse financial situation.

●      Rental scams: Fraudsters may advertise rental properties that they do not own or have no authority to rent. They may request security deposits or rent payments in advance and disappear once they receive the money, leaving the victims without a place to live.

●      Fake agents: Some scammers pose as real estate agents or brokers who sell plots of land like a Homagama land sale, offering to help buyers and sellers with property transactions. They may charge upfront fees and manipulate the process to their advantage, often resulting in financial loss or the sale of a property under false pretences.

●      Property flipping scams: Scammers may convince buyers to purchase properties at inflated prices by misrepresenting their value or potential for quick resale at a higher price. These scams often involve collusion between unethical real estate agents, appraisers and mortgage lenders.

●      Title fraud: Scammers may fraudulently transfer property titles into their names either by stealing identities or forging documents. They can then secure loans against the property or sell it without the owner’s knowledge.

These scammers can target a variety of individuals, but they often focus on people who are vulnerable or susceptible to their tactics. Here are some common groups that real estate scammers may target:

●      First time homebuyers: Individuals who are new to the real estate market and lack experience may be targeted due to their limited knowledge of the buying process and potential red flags.

●      Distressed homeowners: Scam artists often prey on homeowners facing financial difficulties, such as foreclosure or other financial hardships. These homeowners may be desperate to find a solution quickly and can be more susceptible to fraudulent offers.

●      Elderly individuals: They may target the elderly who may have significant home equity, limited technological literacy and a higher level of trust in others. They may exploit their vulnerability and manipulate them into fraudulent schemes.

●      Renters: Rental scams can target individuals seeking affordable housing or those who are in urgent need of a place to live. Conmen may take advantage of their desperation and lack of familiarity with the rental market.

●      Investors seeking high returns: They may target individuals looking for lucrative real estate investment opportunities. They may offer exaggerated promises of high returns or exclusive deals to entice investors into fraudulent schemes.

●      Individuals in distressed or high demand markets: They often target individuals in areas where there is a shortage of available properties or high demand for housing. The pressure to secure a property quickly can make them more susceptible to cons.

●      Individuals seeking financial assistance: They may target those people seeking loans, refinancing options or mortgage assistance. They may exploit their financial struggles by offering fraudulent services or false promises of debt relief.

It is important to note that anyone can be a target of real estate scams. Con artists adapt their tactics to exploit the vulnerabilities of their victims. Therefore, it is crucial for individuals to remain vigilant and exercise caution when engaging in real estate transactions, regardless of their background or experiences.

To protect yourself from real estate scams, it is essential to exercise caution and take certain precautions. Verify the credentials of real estate professionals, research property listings independently, and never make upfront payments or provide personal information without thoroughly vetting the other party involved. It is also wise to consult legal or financial professionals when dealing with significant real estate transactions.

What can you do to avoid these real estate scams?

To avoid falling victim to these types of cons, here are some preventing measures you can take:

●      Work with reputable professionals: Deal with licensed real estate agents, brokers and attorneys who have a good reputation and positive reviews. Research their credentials, check their track records and consider seeking recommendations from trusted sources.

●      Conduct thorough research: Independently verify the information provided about the property or a deal. Use reliable real estate websites, visit the property I person if possible and cross reference details from multiple sources. Be cautious of deals that seem too good to be true.

●      Secure independent appraisals and inspections: Obtain professional appraisals and inspections to ensure the property’s value aligns with the asking price. This helps you avoid overpaying for a property or purchasing one with hidden issues.

●      Be cautious with upfront payments: Avoid making upfront payments or providing personal financial information until you have verified the legitimacy of the transaction and the parties involved. Be wary of any requests for wire transfers or cash-only transactions, as they can be signs of fraudulent activity.

●      Scrutinise rental listings: If you are looking for a rental property, be cautious of rental listings that have unusually low prices or lack detailed information. Verify the ownership of the property, visit it in person, and meet the landlord or property manager before making any payments or signing any contracts.

●      Protect your personal information: Be cautious about sharing sensitive personal and financial information. Scammers may attempt identity theft and use your information for fraudulent purposes. Only provide information to trusted and verified entities.

●      Educate yourself: Stay informed about common real estate scams and their tactics. Understanding the signs of fraudulent activity can help recognise and avoid potential scams.

●      Seek professional advice: Consult with real estate attorneys, financial advisors, or trusted professionals before making significant real estate decisions. Their expertise can provide valuable insights and help you navigate complex transactions.

Remember to trust your instincts and if something feels suspicious or too good to be true, it is better to step back and investigate further before proceeding with any transaction.