As one of the most lucrative – if not the most lucrative – and least risky investments the world has come to know, real estate has been an equally lucrative playground for con artists. Real estate scams are many; they come in different forms and they have been under continuous development.

Needless to say, as the technologies and the landscape of the market continue to shift, so does the real estate scams. Whenever you hear about a scam from a friend, you always tell yourself, “Well, it will never happen to me”. That’s a kind sense of self assuring steaming from self-confidence and strong background. Truth is, however, real estate scams can happen to anyone, and no one is totally secure, especially if you have no previous experience in the market and this is your first time in selling or buying a property.

The first step to avoid falling as a victim for real estate scams is, of course, being able to successfully identify those scams. In this article, we will go through the most notorious scams to help you outsmart the swindlers’ cunning techniques

You can read too

Stock Market vs. Real Estate

 

  • The Impersonator:

Probably the most common real estate scam. In this act, the con artist impersonates the person you are dealing with. They could impersonate the owner of the property, get fake contracts and papers, and choose a time when the real owner is not in town to rent the property to a tenant or more, as much as your absence period would allow.

Furthermore, some real estate scammers would take it a step further and steal your identity through creating fake documents to utilize the property in any way they see fit. In which case, the inflicted damages would be much more disastrous.

How to avoid it?

Carefulness is the keyword here. Do not carry confidential information like your credit card pin number or your social security code around with you in the wallet. Also, make sure to terminate any unused credit card accounts that you own. On the other hand, keep all of your confidential documents in a safe secure place.

However, if your identity has been stolen or your confidential information has been jeopardized, report to the police immediately. This will not only help you in restoring your stolen information or cards, but it will also help clear your name in case this information was used to facilitate illegal activities.

 

  • Beware of door-to-door contractors:

While you are enjoying your weekend at home, watching TV with your kids around, a sudden door bill will ring to spoil this moment, a contractor at the door asking for a quick meeting to display a number of services with decent prices.

Door-to-door contractors are a rising trend taking place in our societies, their agents take advantage of enticing sales techniques in order to grab your attention and get your approval on their offers as fast as possible.

How to avoid it?     

Just take care before casting a deal with them; and remember, not all that glitters is gold. Make sure that you have done a thorough investigation of the property to verify the contractor’s credibility and that you have all needed details they are selling before signing the offer.

real estate scams

  • Realtor posted prices:

Realtor may tend to adapt some fishy advertising techniques like posting fake properties prices for the sake of grabbing audience attention. It’s a trap, beware, you will probably hear many justifications when you find out that the realtor hiked the price in the middle of negotiations like: surprising price surge, real estate “season”, and stuff like that.

How to avoid?

Similar to the previous scam, do not take a single realtor’s information for granted. Do your own market research: ask more realtors, check the price range of the properties that are similar to the one that you are considering in the same neighborhood, take your time before taking a final decision as most of the real estate markets tend to go through seasons where the prices would surge up at one point during the year and drop down at another.

Also, to avoid the hassle, you might prefer to go with exclusive listing method and not MLS. In this link, you can find out more about the two real estate marketing methods and their differences.

  • Exploiting online listing:

Another one of the modern-age real estate scams is piggybacking on existing property listings. Scammers could exploit a property listed online through very simple ways in a fraud, by downloading the property picture, copying its information and faking another contract and papers. This way, they could ask for money as a deposit fee or broker fee.

How to avoid?

Be cautious to not pay any deposit or any amount of money beforehand to the broker or the realtor. Make sure the contract is not fake – best practice here is to request the help of a lawyer to examine the contract’s validity – before signing it.

  • Phony application fees:

This kind of real estate scams is more prevalent in the west, however, there is no harm with posting it. Some brokers could show some pictures of supposedly available apartments to rent, then ask the customer for special application fees for the apartment. Most of the time realtors ignore the applicants call or continue to delay the move-in dates forever after getting the money.

How to avoid?

Well, this procedure is not really considered one of the best practices that you would want to do while buying a property. If a realtor requested a special application fees for the apartment you are seeking, do not waste your time or effort and find yourself another one.

real estate scams

 

 

 

 

 

 

  • Illusion tricks:

In online listing sites, sellers, and even brokers, could use some photography and shooting techniques in order to show different facts about the listed unit, like for example make it feel bigger.

How to avoid?

Obviously, you need to examine the property yourself and fact check all the specifications the advertisement said it had. Do not hesitate to ask any questions to erase any doubt or confusion you have regarding the property.

.

real estate scams

 

 

 

 

 

 

 

 

see also:

Real estate market components

Discover the main features of Bahrain real estate market

Comparison between the biggest real estate markets in the region (Infographic)

  • Overrated investment potential:

It is not unusual for the realtors to exaggerate the market value of the investment they are selling you and share stories about the unit’s potential as an investment, and others who became rich after flipping apartments that are similar to the one you are considering.

How to avoid?

Maintain realism in your expectations and, most importantly, do not rush the deal just because it looks like a once-in-a-lifetime chance. Take your time in considering all the different variables that affect the property’s price (seasonal surges, price range of similar properties in the same neighborhood, services, … etc).

 

In short, in order to not fall as a victim for one of the real estate scams you’d better walk the walk, do your research, and hire a trusted broker. We posted an article before dubbed: advice for dealing with your realtor, you can find it useful.

Related Posts

Load Comments