7 Common Real Estate Frauds and How to Avoid Them

REAL ESTATE FRAUD ALERT

Real estate fraud is a crime that involves deceiving the seller, buyer, or other parties with the intent to get money, property, or services.

Real estate frauds are becoming more and more prevalent as the market becomes more competitive. Scammers trick many consumers and potential property owners into buying fake properties, which leads to financial loss.

What are the seven common real estate frauds?

1. Home Flipping

Home flipping is a type of real estate fraud in which the perpetrator buys a property, usually at a higher price, and then quickly resells it for a profit. It involves misrepresentation, deception, and fraud.

2. Fake Listings

Fraudsters use fake listings to lure in potential buyers and sellers. They often come with a high-end image and promise, but they are not always what they seem. Additionally, listings created by someone else without the owner’s consent or knowledge are considered fake listings.

3. Bait-and-Switch Tactic

A bait-and-switch tactic is a deceptive sales tactic in which sellers lure potential buyers into purchasing a property that they believe is worth the price.

The most common type of bait-and-switch tactic is when the seller offers a low price on a property but then asks for more money if the customer wants the property.

4. 'Colorum' Real Estate Brokers and Agents

Colorum real estate brokers and agents are individuals who sell real estate without a license. Most of them use social media to promote their business and attract buyers.

In 2009, RESA, or the Real Estate Service Act of the Philippines, implemented rules and regulations for real estate service practitioners. There will be a penalty and fine for those who violate this Act, including the implementing rules and regulations.

5. Fake Buyer

Fake buyers are the most common type of fraud in the real estate industry. They are not only trying to steal money but also steal property. The bogus buyer usually inquires via email or social media to sellers about the property they want to buy.

The risk factors associated with fake buyers can affect real estate agents, investors, and developers.

6. Fake Seller

The fake seller will include an attractive price and some other details about the property that seem legitimate, but the seller has no intention of selling the property. Some sellers will even ask for money as a “deposit.”

Fake sellers usually ask for personal information like your financial accounts, email addresses, phone numbers, and more to process the transfer.

7. Fraudulent appraisals

When someone claims to have done an appraisal on your property, they give you a fake appraisal report with a low value. It’s essential to check with your realtor before agreeing to anything because they can help you figure out whether this is something legitimate or not.

How to avoid these real estate frauds?

DON'T GET SCAMMED

Real estate frauds can happen in many ways. With the advancement of technology, it has become easier for them to occur. Real estate agents, developers, and even home buyers can perform the crime.

Don’t hesitate to ask for comparatives to see if you’re getting a fair price for the property to avoid these frauds. Do your research prior to your purchase of property as well. Ask for the agent or buyer’s authentic proof of identification.

Moreover, if someone offers you a deal that seems too good to be true, it’s probably a fraud. If they make unrealistic promises or ask for money upfront, don’t do business with them. Lastly, buy from a trusted or legitimate developer. That is the best way to avoid being a victim of real estate fraud.

Keller Williams Philippines is a real estate company that provides services to both the buyer and the realtor. They offer an online platform for transactions, which is very safe and legitimate.

As a potential property owner, you must go through all the steps of buying or selling property with caution. This includes ensuring that the transaction is safe and legitimate by using a realtor specializing in this area.

Follow us on our social media accounts (Facebook, Instagram, and Youtube) for more updates!

Roz

Roz

Leave a Reply

Real Estate Blog

Recent Posts

Subscribe now

Subscribe