Investing in a new home isn’t as easy as it sounds. Right from house-hunting to setting it up, the stumbling blocks don’t seem to soften. With the ever-growing demand for property, real estate scams have become frequent. It becomes tough to identify and check the credibility of the property that you are willing to buy.
However, having a real estate consultant by your side can work wonders but some common scams can easily be avoided with a bit of common sense. Here we bring you some common real estate scams and tips to avoid them:
1. Title Frauds
The most commonly occurring scam is when fraudsters duplicate the title of vacant properties or even the disputed ones. In this type of scam, buyers fall victim to scam artists and individual sellers as well. The buyers are tricked using fake documents to get home loans and get hold of the money. What next? We know you are smart enough to guess!
To avoid such frauds, it is important on the buyer’s part to undergo title verification by an attorney. You can opt for title insurance as prevention to future encroachments errors associated with the property. All in all, staying alert is the key!
2. False Promises
Unlike title frauds, the least expected scams of all time, it doesn’t entail fly-by-night operators. The continuously increasing demand and competition in real estate push builders to lure buyers through false promises.
Many a time, the builders embezzle the buyers during the initial phase of the projects to snatch as much money as possible. Other days, the builders lure buyers by advertising low-priced property, but later, they propel them to invest in property that is higher than what was advertised. This practice is the ‘Bait and Switch’ scheme.
A diligent approach and checking the builder’s track record can help you ease out the home buying process. Moreover, you can begin talks with a defamation solicitor to know if there are any defamation cases against the builder. Furthermore, a buyer should always ask for a written document and consult an expert before deciding their course of action.
3. Rental Frauds
With the real estate frauds taking the speed, the rental frauds are probably where the deception occurs the most. It all starts when the fraudster shows you a listing of properties that are too good to be true in terms of rent price. They ask for upfront deposits by luring the buyers into high demand and competitiveness clauses. Once the amount is paid, then whoosh!
Besides, a lot of times, the person trying to defraud you denies the home tour and rushes their way to receive the money somehow. A clear red flag!
Such situations can be prevented by doing your in-ground and online research about the prices and even the location of the property. A quick private conversation with the immediate neighbors should be done to stay on the safer side.
Moreover, always keep in mind that a genuine property owner will never hesitate to meet you in person.
4. Deviation from the Approved Plan
This sounds like a downright gyp, isn’t it? One of the major issues faced by the homebuyers, the builders deliver projects that are not following the initial approved plan.
This causes the buyers to make compromises on building amenities, finishing, and promised luxuries. It is important to note that the permissible limit for deviation is up to 5 % that comes under the unintentional deviation, but beyond this, it becomes unacceptable and against the rules.
A smart move would be to keep a continuous check during the construction process. And, if you crossed this phase, then make sure to hire a legal professional to settle claims.
5. Deliberate Delays
Another red flag is when the developers deliberately delay the projects, mentioned against the time in the contract. The builders keep on shifting the project finish dates until they find the requisite number of buyers.
Furthermore, they keep diverting the money from one project to another, making it a labyrinth of scams. Sometimes, the builders even give possessions to the buyers without finishing off the utilities like water connection, electricity connection, etc.
To make sure you don’t suffer this, it is important to check for the delay clause in the agreement along with a copy of the approved plan. The time frames for delay should be mentioned in the contract. Therefore, a mix of legal help and a healthy dose of caution goes a long way in saving you from such real estate scams.