Important red flags in property deals to look out for
Category Advice
Important red flags in property deals to look out for
Property scams and cybercrime have become prevalent, and ever more sophisticated. From scam emails to confidence tricks, these scammers are getting craftier as they intercept emails, messages, banking apps, and everything possible.
Property transactions have become a target for fraudsters and scammers. Whether you are buying, selling, or renting, you need to be vigilant and look out for "red flags" which could undermine the property transaction, or worse, scam you out of money.
If you're a buyer, you can check the credentials of your agent by asking for their Fidelity Fund Certificate number and checking this with the Property Practitioners Regulatory Authority. Then contact the Head Office of the property company they work for to confirm the agent and their branch is listed with them. Ideally, complete all paperwork in person at their office. Double-check with the relevant bank to ensure that your deposit is being paid into a trust account.
It is just as important for landlords and tenants to take similar care. Managing property agencies, offer protection to tenants by placing rental deposits in trust accounts and partnering with regulated providers.
Be especially vigilant with requests for money transfers and payments. It is well-known that scammers are cloning emails to scam money out of unsuspecting customers. Fake email addresses, fraudulent emails and invoices are all part of the scams.
Always guard your private and banking information, and never transfer money unless you have personally verified the source of the email, the nature of the request, and most importantly, the bank details provided.
You should never part with any money or pay any deposit unless you have verified the request and it will be held in a trust account, preferably that of the respective conveyancing attorney.
In any property purchase and sale agreement, you must make sure that you are dealing with a registered estate agent. This also goes for tenants as they often get scammed. You can verify the name of the agent and agency on the Property Practitioners Regulatory Authority website.
To avoid falling victim to property scams follow these tips:
1. Always use a reputable estate agent registered with the Property Practitioners Regulatory Authority. Using the PPRA's website, you can search for an agent's name to see if they are registered.
2. Conduct thorough research to verify the legitimacy of the property and the seller or landlord. Does the property exist on Google Maps? Is the landlord/seller willing to provide identification documentation to you for verification?
3. Insist on meeting with the agent at their office or the landlord/seller in person before viewing the property to ensure they are who they say they are.
4. Be cautious when providing personal or financial information online and use secure platforms for transactions.
5. Be wary of deals that seem too good to be true, as they are often signs of a scam. Is the rental incredibly low for the value you'd be receiving? Is the sales price far cheaper than the average for the area?
6. Never pay money upfront - legitimate agents and property developers will not require upfront payments other than to draw up your lease and complete your credit checks. If a landlord wants you to pay a deposit before seeing the property, walk away.
7. Consult legal professionals and bona fide property experts to ensure all documentation is legitimate and accurate. They have experience checking these kinds of documentation and have an eye for picking up any discrepancies.
8. Trust your instincts and walk away if something feels suspicious.
Property buyers must make sure that the property that they are viewing belongs to the owner or landlord as scammers will often only show you a property from outside stating that the owner is not home to view. Never purchase "sight unseen" without verifying that the agent and property is legitimate. If you are unable to view it, find someone trustworthy in the area to help you.
Property purchasers should also check that a signed disclosure document is available which discloses all defects, both patent and latent. Approved plans should also be available and up to date. Sellers should be careful of unscrupulous agents who purport to have a buyer for the property, but do not produce a written offer to purchase.
Take care not to respond to fake properties. These fake properties are often advertised with cloned photographs and information from other properties and can be difficult to spot. If you cannot find information about the person advertising the property online, it should immediately raise a red flag.
Legitimate agents will have a verifiable digital footprint, he says. Rental agents must also be registered with the Property Practitioners Regulatory Authority (PPRA) so that you can also verify their status online.
Be especially vigilant if the asking price or rent looks too low. If you are being pressured to make certain payments upfront, it should raise a red flag. No rent or deposit should be paid over without the verification of the agent and property, and a legitimate lease agreement drawn up and signed by both parties.
Landlords should also take care to verify the tenant. While it is common for tenants to pay rent in advance, be careful of swindlers who pay a few months in advance, and then don't pay again. Tenants who offer to pay a higher rental may also be a red flag. Be clear about who may reside in the property, as there are instances where the tenant looks to secure a property for someone else to occupy.
If the tenant starts paying late, or starts skipping rent payments without alerting the landlord, it should be an almost immediate red flag. As soon as you sense there is a problem, you should immediately address this with the tenant, and follow it up with proper legal procedures.
Extract from Property 24
Author: Extract from Property 24
