Common Real Estate scams and how to avoid them
May 14, 2024
All industries have people whose jobs it is to rob unsuspecting individuals of their money with all sorts of tricks. The real estate industry is not an exemption from scammers. It is very important for you to be aware of the common scams that are prevalent in the real estate industry. Scammers often prey on unsuspecting and unknowledgeable investors, leaving them in a pit of financial losses. Being aware of some of these scams equips you with the right knowledge to tackle them if they ever arise. This article will not just expose some of these tricks but will also recommend tips to tackle them if encountered.
One very popular scam trick would be phony investment schemes. Scammers usually reach out to discuss very tantalizing investments that yield ridiculously high returns. These offers are usually accompanied by a sense of urgency. This is not to say that there may not be very attractive and real offers open in the market, but you must be very alert to not jump at every offer that comes your way. Be sure to perform your due diligence by doing your research on the property, the company, or the individual presenting such an offer. Remember, ‘awoof dey run belle.’
Some scammers even go as far as creating fake online listings for properties that do not exist or are not for sale. This means that they have gone the extra mile to provide you with a means of verifying whether or not they are real, knowing fully well that certain people will always believe whatever they find online. You must make sure that, with the help of a professional real estate agent and property manager, you verify listings found online. One more thing you can also make sure you do is never pay a dime on a property that you have not seen and confirmed its sale status (whether it has been sold or is yet to be).
You should also be on the lookout for scammers who involve themselves in appraisal fraud. Usually, as an investor, you may require the skill of a professional to help appraise a property so you know its value to aid your buying and selling process. What these scammers do is inflate the value of a property, leading unsuspecting investors to overpay for these properties or to pay for a property that is not as good as it has been appraised to be. Even if the cost of a professional may be a lot, it is safer to use the services of a professional appraiser and be very careful in reviewing and confirming the reports that come back to you.
In general, to avoid real estate scams, you must carry out very thorough research, work with certified professionals, be conscious of certain unbelievable offers, inspect properties before signing any agreement, do not rush into making investment decisions, and always verify the credentials of your professionals and their reports. What the knowledge of these scams does for you is help you take the necessary precautionary measures because it is no news that prevention is indeed better than cure.