Property fraud is one of the major types of fraud because of the value involved. Property counts as one of the most valuable assets that a person can own. If one needs to raise some cash, they can sell or mortgage their property. This explains why property can be a very attractive tool for scammers.
Some of the most targeted properties include empty properties, tenanted properties, and properties without a mortgage. There are several investors, even those with many years of experience, who have been defrauded in property transactions. It is very hard to tell between genuine sellers from fraudsters. To avoid falling a victim of such fraudsters, it is important to take some preventive measures before taking part in any property transaction.
Below are 5 simple ways to avoid being defrauded in a property transaction.
#1: Appoint a lawyer
Appointment of a lawyer should be one of the first things to do before buying any property. A lawyer should be appointed or hired before signing any document/contract or paying any money. The lawyer should have no connection with the individual or company selling the property. This lawyer will provide advice whether the transactions are valid.
#2: Get an independent valuation of the property
Find a valuer to carry out an independent valuation of the property. The valuer should have no connection whatsoever to the individual or the company that you are transacting with. In Singapore, qualified valuers can do valuation of property for approximately $500 to $800.
#3: Seek complete and clear information about the seller, Estate Agent / Salesperson, and the property
Before entering into any property transaction, it is important to inquire into the background of the seller, the estate agent / salesperson representing the seller, and the property. The information sought should include whether the seller has any pending litigation cases, whether the estate agent / salesperson is reputable and properly licensed by the Council of Estate Agencies. You and/or your estate agent / salesperson should also carry out a detailed search on the property find out important information such as ownership, tenure, size, any encumbrances and when the property was last transacted.
#4: Avoid heavily discounted or low priced property
To attract unsuspicious property investors, fraudsters sometimes offer very good and attractive deals. They are ready to take in any amount of money that is placed on their hands. One of the things they do is providing large discount rates on the property but yet not allowing you to view the property. So before buying a heavily discounted property, it is important to have the property assessed very carefully and conduct all the checks and due diligence highlighted above.
#5: Keep away from online transactions
Fraudsters nowadays advertise “their” properties online by impersonating property owners or managers. They will indicate that they won’t be available to meet the prospective buyer or renter at the property. They will ask for meetings away from the property where they will collect rental deposits or signing of document and transfer of money. Such online deals should be avoided completely. Do not carry out any transaction before conducting physical inspection of the property on sale and conduct all the necessary due diligence.
Property investment usually involve a large some of money. It is important that you take extra care before jumping into the investment to prevent any loss of money or property due to property fraud.
To gain more insights on how to protect your property investments, click here to register for a free 2 hours workshop on Safeguarding your Property Investments by legal advisor for Singapore Estate Agents Association and CEO of Fortis Law Corporation, Mr Patrick Tan.