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Scams to Avoid When Buying Property

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Where there is money, there are scams and scammers. The property market has it’s fair-share of swindlers and fraudulent activity.

Money laundering, for example, has occurred just about everywhere. No doubt it still goes on today, but’s it’s not just with the sale and purchase transaction, one area that has had the spotlight on it over the years is property investment education. In this article, we cover a few ways money, and you can be parted when dealing with property.

Real Estate Education

In real estate education, there have been many spruikers fined for false claims and poor practices. In Australia property spruiker Rick Otton and We Buy Houses was hit with a record $18 million fine for false information about how you could buy a house for $1. Always do your due diligence before committing to an education program that parts you from your money. There are plenty of free options to get yourself up to speed with the ins and outs of investing in property, including discussion forums like PropertyTalk.

Other options to learn up on investing in real estate include:

  • Webinars
  • Podcasts
  • Books
  • Social Media groups

Mentor

As well participating in all the options mentioned above, engage a mentor who has nothing more to gain from the relationship with you apart from the satisfaction that they are steering you in the right direction to avoid major costly mistakes. Mentors enjoy the process, and without their income attached to your success, their input will include the pros and cons of property investment.

Once you understand the basics and you’ve made a couple of purchases, paying for real estate education is worthwhile. You’re no longer a novice so you can do your due diligence on the educator before investing in the course or seminar.

Real Estate Transactions

Where you can have many parties involved in real estate sales transactions, there are vulnerabilities which can be attacked by hackers and criminals. Even your local Real Estate Agent may not be honest. Some real estate agents find the temptation to earn a few extra dollars too much. Plus you need to be careful when communication is online, especially when it comes time to deposit funds into an account.

Unfortunately, the scams don’t stop with Agents, and email phishing, buying offshore property can also be fraught with security holes.

Is the Property For Sale Real?

Viewing a home for sale on a website and then attempting to purchase it sight unseen is risky at best. Does the property exist? In much the same way Airbnb has had their scammers listing rooms for short let that don’t live to part people and their money, i.e. you pay for your Airbnb accommodation to secure the booking before your stay, the same scam can occur for real estate sales.

Use Local

Always have someone you trust to view the property before you commit to the purchase. Make sure to use a local real estate agent and check their credentials and operating licence.

Engage A Lawyer

Plus never follow through with a purchase without legal advice and your lawyer involved in the sales agreement. This tip goes for all property transactions. Even the most seasoned property investors know to use a conveyancer or property lawyer to manage the transaction on their behalf.

Email Scam

Hackers use technology to part you from your money as happened to a homebuyer in the USA. However, many countries experience the same criminal activity. Hacking the email of the person who is involved in the transaction, allows the criminal to monitor all the emails sent to you then they can spoof an email to make it look like it came from the other party involved in the real estate sales agreement. This is similar to the Nigerian scams.

Check the link before clicking it

Using the same logo branding and sender email address, it is hard for most people to recognise a fake email. The best way to do this is to hover your mouse over the link in the email. This is the link you are to click to be taken to a website that the hacker wants you to use to deposit funds.

When you hover your mouse of the link in the email the link URL will appear at the bottom of your monitor – if it does not have the correct domain name – do not click. Paypal and top tier banks are all targets of scammers. Never just click a link in an email always check the link URL matches what you’d expect to see, i.e. it matches the real sender’s website address.

Summary

Real Estate transactions are fraught with security holes when there are many parties involved, i.e. lawyers, real estate agents, the buyer, the seller etc. Scammers target real estate in a variety of ways from laundering money to getting stealing purchaser’s funds. And then there are the educators, are they as good as they say they are? Caveat emptor (buyer beware) should be your ‘mode operandi‘ for all things to do with your property.

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