The Internet has created wonderful technological opportunities for humankind, but unfortunately, scammers are also enjoying the sometimes dubious benefits of the Web. The property market has not escaped and despite precautions, buyers, sellers, renters and developers are targeted in fraudulent property scams.
Property Scams
Raul Flores, CEO of TITAN Property Group (TPG) says property scams thrive in all areas of the market. “Always check that an agent in properly registered with the Estate Agency Affairs Board and is in possession of a valid Fidelity Fund Certificate, “he urges. These certificates, without which no property agent is allowed to practise, are annually renewed and the date on it should reflect the latest date.
Be aware of property scams and ensure you are dealing with a reputable company. Agents should provide banking details which can be checked against that of the real estate group employing them. The most predominant current property scams in the South African real estate market are highlighted herewith.
Identity Theft
Despite harsh sentences imposed on criminals with regards to identity theft, it does not deter them as they are technologically astute and are becoming more experienced. They use personal details to empty bank accounts, obtain credit accounts and even home loans.
Posing as a property owner (seller or rental landlord), forged documents will indeed show that a property is in their name, allowing them to obtain additional mortgage against the property. With a secure credit line, the criminal and the money would disappear.
Intercepted Emails
Scammers hack into emails of those involved in property transactions - agents and lawyers - diverting funds to them instead of the appropriate parties. A generic email address would provide banking details after which the money disappears without any paper trail.
Changes regarding payment details should preferably be done by the seller in person and not via email alone. Real estate buyers and sellers should double check everything, even from trusted parties, and to require verification of a bank account.
Fraudsters Posing as Buyer
Here again, it is imperative to read the fine print if the sale is done privately and without a properly accredited and known real estate agent. Scammers will not be dealing with reputed realtors but prefer to meet the seller privately to put in an offer or even act as an agent and marketing the property online, using images of properties from various real estate company websites.
“Check every detail with regards to property transactions, as documents can be falsified and email addresses cloned,” – Raul Flores
Duplicated Rental Listings from Fake Rental Agents
Legitimate rental listings are taken from websites and advertised at a much cheaper price. Many people fall prey to this and wire money to the owners of the fake listings. Once again, when looking for a rental property, do your research and ensure you are working with a reputable real estate company or agent.
Viewing a Property
These bogus agents promise to meet prospective clients at the property. However, on short notice they would call to say they cannot make it but that the landlord will show them around. However, they promise to negotiate a lower price with the landlord.
Upon arrival at the property, you will find many others also interested in renting the same place. You call the “agent” back to negotiate a better price which they agree to do; all you have to do is transfer the money for the first two months to secure the place.
On moving day, you find someone else is also moving into the property and the agent wasn’t an agent; they just found the property online and reposted it with their own contact information. They purposely send several interested people at the same time to view the property to generate a sense of urgency for potential renters.
How Not To Become a Property Victim
You should not be required to make a payment for something such as a credit check or security deposit and would not be able to recoup this money as scammer cannot be traced.
If the price looks too good to be true, it probably is. Real estate prices are considerably higher than a few years ago. If the “agent” says it is not possible to show you the property, it is most probably a fake listing. A registered agent will make time for anyone interested in a property and always accompany you.
If you find a “bargain” online, call the estate agency to find out if the deal is real. Do not call the number at the bottom of the ad because this number could lead to a fake office. Find the actual office number and ask the receptionist to give you the number of the specific agent or branch you are looking for.
Some listings hide an email address when you send a message. Scammers usually use free email servers with a series of random letters to make it difficult to trace.
The faster a scammer gets you to agree to a business deal, the faster they can steal your money and avoid getting caught. The seller will often use high-pressure tactics that attempt to push you into acting quickly in order to purchase the home. DO NOT be forced by any seller to send money and when the term – wire money – is used, you are probably dealing with a scammer. It should either be sent through your bank or a lawyer. However, even here, prospective property buyers and sellers, or renters, should still be wary of who they are dealing with.
Red flags should be raised when the buyer or seller is foreign and wants to buy a home unseen; most people want to see a property before making a large investment. Foreign buyers who do not ask questions, act in haste and don’t care to see the property, indicate a high likelihood of fraud. However, not all foreigners are suspect and would be prepared to go through the normal, if lengthy, process.
Be well informed about market related prices within the area you are looking to rent or buy. If a property is advertised way below the market related price for that area it should raise your concerns. This is why it is preferable to deal with a reputable and well-known realtor such as TITAN Property Group.
Be wary of agents and a landlord who seem too eager or pushy. A legit agent or landlord will always conduct the necessary checks. If the agent is constantly making excuses as to why they are not able to meet you or show you the property, you should be worried. Chances are they don’t have access and are stalling for time until they can think of a clever way to get you to pay the deposit. Never pay a deposit before you have viewed a property.
Speak to one of TITAN Property Group’s knowledgeable staffs for free advice regarding the evolving SA real estate market and investment across, not only the commercial sector, but also the high performing commercial opportunities countrywide. Call them on 010 023 2764 or 082 734 0688. With their knowledge of the market, their advice can mean failure or success and most of all, not being scammed.