Technology has made it so much easier to find property for sale or the perfect rental property - on the flipside, property scams have also become easier and if people aren't aware of the dangers they could increase their risks of falling victim to these scammers.
It is not just unsuspecting buyers, sellers, landlords, and tenants that could fall victim to these scammers, sophisticated scammers can also trick agents with their scams.
We take a look at precautions with regards to sales and rentals to minimise the risks of falling victim to real estate fraud in either category.
Rental Property Scams
If any of these red flags come up, it would be advised to safeguard yourself immediately:
- When a landlord or agent asks for a non-refundable deposit to secure the property even before you, as the tenant, have viewed it or before the agent/landlord has met you.
- When they keep cancelling show days. Consider whether there is even a property to show.
- When the rental rate seems too good to be true.
- When the agent/landlord keeps stalling/ignoring you or not getting back to you within a reasonable time frame.
- When you are put under pressure to pay a deposit or to fill out paperwork before the required procedures have been followed. If an agent or landlord tells you that it’s not necessary to check your credit score or call for references, this should also raise concern.
- When you can’t find any information on the “agent” on the internet or when the agent does not provide an office number and email address in addition to their cell phone number.
- When an internet search shows that the agent has been reported for doubtful dealings in the past.
- When you can’t find info on the real estate agency online or their website seems amateurish.
- When you call the agency that the estate agent claims to work with and either they don’t know who the agent is or the agent does not work there anymore. The status of both the estate agent and estate agency can be checked on www.eaab.org.za
- When the agent cannot produce a valid Fidelity Fund Certificate.
Furthermore, starting your rental property hunt long before you need to move out of your current accommodation is the best way to avoid becoming desperate and thus more vulnerable to rental scams. Desperation may lead to hasty decisions and unnecessary shortcuts or may force you to settle for a place that you either don’t like or can’t afford.
Property Sale Scams
Outlined below are some pointers that should raise red flags when considering a sale:
- When the selling price is too good to be true. No seller would want to sell their property for less than market value.
- When the agent or seller does not want to disclose their location of offices or when they are of no fixed abode.
- When the agent/seller goes AWOL on request of paperwork of the property in question.
- Inconsistency in the paperwork i.e. land size, description, registered owners etc.
- When a seller demands that funds be deposited directly into their account without the involvement of a reputable lawyer or agent to handle the transaction.
- When immense pressure is put on the buyer to sign an agreement of sale and to pay a deposit as soon as possible.
- When the purchaser is a cash buyer but cannot provide proof of the cash.
- When a title deed search of the property shows another person as being the registered owner.
- When the buyer insists on taking occupation before any deposit has been paid or a bond has been granted.
How we can help
We have reputable real estate agents across South Africa advertising their properties for sale and to rent, you can find a professional real estate agent in your desired neighbourhood here. Furthermore, find a real estate attorney and lastly, we have a dedicated team of home loan specialists to help you get the best home loan for you!
