Real estate transactions, whether renting or buying, can sometimes become targets for fraud. To safeguard against potential scams, it is essential to recognise warning signs in both rental and sale scenarios. Below are critical red flags and precautions that can help minimise the risks associated with real estate fraud.
Red Flags in Rental Transactions:
Non-Refundable Deposits Before Viewing: Avoid situations where a landlord or agent requests a non-refundable deposit to secure a property before allowing you to view it or meet them in person.
Cancelled Show Days: Repeated cancellations of show days might indicate that the property in question does not exist or is unavailable.
Unrealistically Low Rental Rates: If the rental price seems exceptionally low compared to the market rate, proceed with caution.
Delayed Communication: Consistent stalling or ignoring from the agent or landlord, especially regarding timely responses, is a concern.
Pressure to Pay Deposits or Sign Paperwork: Be wary of pressure to pay deposits or complete paperwork before the standard procedures are followed.
Skipping Credit Checks or References: An agent or landlord who skips checking your credit score or calling for references is suspicious.
Lack of Agent Information Online: If you cannot find information about the agent online or if they fail to provide a proper office number and email address, consider this a red flag.
Past Reports of Fraud: An internet search revealing past reports of the agent or landlord’s fraudulent activities should deter you.
Unprofessional Agency Websites: An amateurish or non-existent website for the real estate agency should raise concerns.
Unknown Agent by the Agency: Contact the agency the agent claims to work for. If they do not know the agent or if the agent no longer works there, proceed with caution.
Valid Fidelity Fund Certificate: Ensure the agent can produce a valid Fidelity Fund Certificate. You can verify the status of both the agent and the agency on the Estate Agency Affairs Board (EAAB) website.
Red Flags in Property Sales:
Unrealistically Low Selling Price: Be sceptical if the selling price is significantly below market value as it may be too good to be true.
Undisclosed Office Locations: An agent or seller who avoids disclosing office locations or has no fixed office should be approached cautiously.
Unresponsive to Paperwork Requests: An agent or seller who avoids providing property paperwork is a potential red flag.
Inconsistent Paperwork: Pay attention to inconsistencies in the property documents, such as discrepancies in land size, descriptions or registered owners.
Direct Fund Deposits: Avoid situations where the seller demands funds be deposited directly into their account without a reputable lawyer or agent managing the transaction.
Pressure to Sign Quickly: Be cautious if immense pressure is placed on you to sign an agreement of sale or pay a deposit immediately.
Proof of Cash for Cash Buyers: A cash buyer should always provide proof of funds. Failure to do so is a warning sign.
Title Deed Discrepancies: Ensure the title deed search shows the correct registered owner. Any discrepancies should be thoroughly investigated.
Occupation Before Payment: Insist that no occupation is taken before a deposit is paid or a home loan is granted.
Final Advice:
Prospective tenants and buyers should start their search early to avoid desperation, which can lead to hasty decisions or unnecessary shortcuts. By being vigilant and recognising these red flags, you can significantly reduce the risk of falling victim to real estate fraud.