As Real Estate business offers an easy way to earn passive money, it attracts many to invest in real estate properties. The real estate industry is expanding each day which not only creates room for new investment opportunities but also for fraudulent offers and deals that are not easily cognized. A lot of people get themselves trapped in bogus offers because of these fraudulent activities. You can avoid these real estate scams if you are familiar with them.
The common types of real estate scams are discussed in this article. Read on to know!
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Fake sellers would sell the property by issuing fake property documents. If you are a naive investor/buyer, you can easily become a victim of such fraud. Once you’ve bought such a property, you can’t resell or even claim this property as yours as you don’t possess the real ownership documents.
Moreover, some housing schemes sell plots while the project hasn’t been granted its NOC or has the land transferred in its name. Sometimes, the project owners misstate that the society has obtained NOC and present a fake NOC number to attract investors.
In some cases, the NOC is obtained for a certain area while the society oversells plots or files in areas without NOC or land acquisition. This becomes a case of misrepresentation of NOC document.
See more: how to check if a society is legal
Another prevalent real estate scam is the false development progress shown by the housing societies. The society would eagerly highlight the fast pace of development work by showing specific structures such as the main gate, main boulevard, or boundary wall but fails to deliver the necessary infrastructure such as sewerage system, Electricity and water connection, etc.
In such cases, the development work is often delayed after constructing a few things that are not enough to make the society liveable for the residents. Hence, the possession of the plot/property is delayed which makes the investor feel entangled in uncertainty about the investment he made.
In some cases, the development is halted due to the absence of NOC. The owner would construct a few structures to lure people/investors to invest. A delayed NOC can affect the market prices and scope of a society/plot.
Selling the same property to multiple buyers
The worst kind of real estate scam is to sell a property to multiple buyers, which many people fail to recognize until after they fall for it. This is an out-and-out deception.
The real owner of the property is usually unaware that his property is being sold to many people. Sometimes, this piece of land being sold is not registered or given a plot number by the society and fake sellers would take advantage by keeping things vague yet believable.
The seller would sell the same property to many buyers by issuing fake documents. This can give rise to legal disputes later which may cause distress for a prolonged time and the chances of recovering your money are not much.
Related: how to verify real estate documents
Fake agents have camouflaged themselves efficiently which is why the market is filled with them. Fake agents usually make unrealistic promises, collect funds, and disappear. If you are not careful enough, these agents can misguide you and loot you for selling fake property.
Many unprofessional persons claim to be real state agents and promise you high returns or would make other similar promises. If that fraudulent agent successfully convinces you, you’d willingly invest your money and ultimately lose it.
Fake ROIs to attract investors
With new projects being launched excessively, the competition has become high between sellers and real estate agents to win more clients/buyers. This is why sellers and agents would show fake ROIs to attract new customers and investors.
The agent would give you false examples or testimonials from fake investors to convince you of the scope of the so and so project/s. If you are not smart enough to confirm the status of these ROIs, you would feel no harm in investing in the project he is recommending to you. This will cause you disappointment or even failure in terms of earning returns on your investment.
If you are to invest in a real estate property, you must not believe whatever you see or hear about a project, no matter how much it may seem true. You should always check and confirm the status of a property you are going to invest in. If you notice something suspectful about the property, related documents, the agent, or the owner, you must keep away from such opportunities or only invest after you have confirmed everything is right.