When due process is followed, the real estate industry is an extremely profitable sector. However, like all other lucrative sectors, the property sector attracts its share of scammers- hoping to deprive property traders (buyers and sellers) from their hard-earned money.
Luckily, there are ways through which you can safeguard yourself from the attacks of these scammers. Here, you are three common scams in the marketplace- how to spot them, and how to prevent falling as their prey.
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Escrow Wire Fraud
In this kind of scam, scammers study the title or lending company you are working with. Then, they spoof. Phone calls, websites, and emails would appear very similar- with negligible differences- to the actual details of the title or lending company.
You would receive a call- a call giving your instructions on where to wire your escrow funds. Some other times, these directions would come as emails or texts. Whichever way, most individuals- especially unobservant ones- fall to this trick, and lose their hard-earned money.
So, while you might think the deal is going on as perfect as it should, you might just be the latest scammers victim.
How do You Protect Yourself?
Simple – BE EXTRA CAREFUL. If, per adventure, you receive any mail, text, or call from the supposed “lending company”, go back to the documents you received from your lender and call the phone numbers listed there to confirm the wiring instructions.
Property Management Fraud
Property agents act as the go-between for sellers and potential buyers. Under normal circumstances, all Australian real estate agents won’t take a dime out of the house proceeds asides their commission. However, the reverse is the case in this fraud.
Here, agents covertly direct payments into their bank account. This results in denial of payment by the seller, and hence, misunderstandings in days to come. In the worst-case scenario, you might have to make repayments, bring about miscellaneous expenses.
Through These Tips, You Can Avoid This Type of Scam:
To begin with, always choose to go with a reputable agency/agent. If needs be, make proper enquiries to ascertain the integrity of whatsoever agent you pick.
Again, ask agencies about the security/fraud prevention policies that have been put in place. While some have a second person cross-check the payout list, others make sure that bank accounts cannot be edited or added by more than one person. Whatever the approach they choose to go with, ensure it leaves your money in safe hands.
Dodgy Property Investments
Have you received an invitation to a free seminar of late?
“Look here! Come over to this free seminar and I would show you the 4-Bill-Gates-Proven-Steps to financial freedom”
To be honest, the seminars are quite engaging indeed. With a lot of humor thrown around and charming speeches by the speakers, you’d be left at awe at how amazing they truly are. If they know so much, they’ve got to be trustworthy people, right?
While they may come forward with unbelievable gains, and enticing personalities, these agents are nothing but wolves in sheep’s clothing. Immediately after blasting the speech-of-your-lifetime into your ears and the seminar ends, mortgage brokers would be waiting-in house to check your financial situation and come up with the best plan possible to get you out of debt.
They appear as angels! Sooner than you expect, contracts are drawn up and everything seems to be working in your favor.
Now that you’ve been fully convinced, they attack. They convince you that you should purchase the house and it’s the deal of a lifetime. Miss it and you’d regret it forever.
You are pressured to either make a decision or lose out. They tell you that you’d never find it anywhere cheaper, plus you would have huge rental returns. Everything looks perfect!
But then, take a deep breath and ask yourself: If these properties are ‘that’ good, why are they not brought into the market, where more people can tussle for it, and potentially sell it off at a higher price?
Here’s the truth, however: the seminar is a façade organized for property developers who wish to offload unwanted property at inflated prices. Through a carefully contemplated sales approach, they’d tempt inexperienced investors to buy-on-the-spot.
Here’s an Advice:
Don’t do that. Of course, there are legit seminars out there. However, have a third eye and a sixth sense whenever you are at these seminars. If you suspect any irregularities, flee. Most importantly, never buy during the first meeting
You’ve got a gut- trust it. When making a transaction and something feels out of place, pause. Even if you might not be able to pinpoint what’s wrong, take some time out to evaluate the whole deal. Doing so, and following the above tips, might save you thousands of dollars.