Are you looking for a new home?
If you are thinking about investing in real estate, it is important to be aware of the potential for real estate scams and the types of Real Estate frauds happening these days. When the markets are volatile, it’s important to be cautious and sceptical of any investment opportunity that comes your way.
Don’t let yourself become the next victim. Arm yourself with the knowledge, as it will help you protect yourself from any such fraud. Get started today by reading our guide on avoiding Real Estate Phishing Home Buying Scams.
What are Real Estate scams?
A real estate scam is a fraudulent practice that uses misrepresentation, lies or illegal practices to exploit unsuspecting homeowners or buyers. Scammers will often target those desperate to sell and buy new homes and those who may have recently inherited property.
Be on the lookout for red flags that indicate you are being scammed, such as an unusually low purchase price, promises of a quick and easy sale, or pressure to sign the deed to your property without consulting a lawyer.
While real estate scams can happen anywhere, they are particularly common in areas where housing prices are high and demand is low. Be extra vigilant if you’re considering buying or selling property in an area with a tight housing market. If you suspect you’re being scammed, you must contact local law enforcement immediately.
Types of Real Estate Frauds
There are many types of real estate frauds or scams, but some common ones are:
- Rental scams: In these types of scams, the scammer poses as a landlord or property owner and offers to rent out a property that doesn’t exist.
- Mortgage scams: These are such scams in which the scammer promises to help you get a mortgage but instead pockets the money you provide as a down payment.
- Property flipping scams: Real estate scams in which the scammer persuades you to buy a property at an inflated price with the promise that they will sell it back to you at a profit after making improvements.
- Title insurance scams: These are scams in which the scammer tells you that you need to purchase title insurance to complete the sale of your home but then keeps that money instead of using it to pay for the insurance.
- Deed theft scams: In these types of scams, the scammer persuades you to sign over the deed to your property without consulting a lawyer. This scam is often used to commit mortgage fraud or foreclosure rescue scams.
5 ways to identify Real Estate Phishing Home Buying Scams
Following are 5 ways to identify the real estate scams:
- Proper research about the real estate firm is always worth researching the company before signing a contract. The best way to do this would be by looking up reviews online and asking other people who have used them in the past if they were satisfied with the service provided. After all, an investment in a property is worth research.
- Delayed Projects: There’s a new twist in the world of real estate, and it has to do with delayed projects. The developer promises possession of your product within a certain time frame, but in reality, you never receive it, and there is no way for you to get back what was paid. The best way to handle this is by contacting your developers frequently and obtaining status on your project! But if they are cancelling calls and appointments or show unnecessary delays in construction projects, then file a case against the company with a solicitor who can help you fight back.
- Misrepresentation of Title: This is a serious problem many people in India face. In this situation, the property’s true owner has not been portrayed correctly and is misrepresented by someone else who is not the actual owner and sold to others as their own when being somebody else’s. The customer should verify the title with an attorney before buying or renting out properties. Hence, they know who the actual owner is and can avoid unforeseen situations in the future.
- Mandatory verification and tangible proofs: Though most of us live in a digital world where transactions are done digitally, it is important to go for tangible proof and verified information from developers. It will help avoid any fraudulent activities on your end. It will help avoid any fraudulent activities from developers, so make sure you request written statements that specify the authenticity of the data provided before agreeing to anything.
- Slight changes in the approval plan: Sometimes, to misguide customers, developers may make slight changes to their approved plans. But the question is whether these alterations were verified and reviewed by a Civic Authority? If at all, these developers could be charged with the demolition of property and sued accordingly. Alternatively, a buyer may file complaints against developers for conducting such fraudulent activities.
What are the most commonly practised Real Estate Scams in India?
The Indian housing market is booming, but it comes with its downsides. Rental scams are a common practice in India because most people prefer renting instead of buying a home or apartment for themselves and their families in this country, where land prices constantly rise yearly!
When it comes to avoiding real estate scams, knowledge is power. By being aware of the potential risks, you can protect yourself from being a victim. It would be best if you didn’t fall into such traps; this guide is for you. Also, we suggest that if you are thinking about buying or selling a property, you should always consult a qualified real estate agent who can help you navigate the process safely and securely.
Real estate scams are just a bucket in an entire clean ocean. Real estate transactions and investments are still as lucrative for investors as they were years ago. If you are planning to buy a home, it’s time to go for financing with TATA Capital. With home loan interest rates starting at just 7.75% per annum, TATA Capital offers one of India’s most affordable home loan schemes. Further, home loan interest and principal repayment are tax-deductible under the Income Tax Act, 1961. Buy your home now!
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