Property transactions are increasingly becoming targets for fraudsters and scammers. Whether you are buying, selling, or renting, it’s crucial to be vigilant and aware of potential red flags that could jeopardize your property deal or even result in financial loss. Here are some essential tips from real estate experts to help you stay safe.
Watch out for scammers
Property scams and cybercrime are on the rise, with scammers using sophisticated tactics to deceive unsuspecting victims. Be cautious of requests for money transfers and payments, especially those received via email. Scammers often clone emails and create fraudulent invoices to trick you into transferring money to their accounts. Always verify the source of any email and the bank details provided before making any payments.
Verify agents and agencies
Ensure you are dealing with a registered estate agent. You can verify the name of the agent and agency on the Property Practitioners Regulatory Authority (PPRA) website. This step is crucial for both property buyers and tenants to avoid falling prey to scams.
Confirm property ownership
Property buyers should confirm that the property they are viewing belongs to the owner or landlord. Scammers may show properties from the outside, claiming the owner is not home. Never purchase a property without verifying its legitimacy. If you cannot view it yourself, find someone trustworthy in the area to assist you.
Check disclosure documents
A signed disclosure document that lists all property defects should be available for review. Ensure that the approved plans are up to date. Be cautious of agents who claim to have a buyer but fail to produce a written offer to purchase.
Be wary of fake property listings
Fake properties are often advertised using cloned photographs and information from other listings. If you cannot find any information about the person advertising the property online, this is a significant red flag. Legitimate agents will have a verifiable digital footprint and should be registered with the PPRA.
Rest assured that on MyProperty, only agents with valid Fidelity Fund Certificates are able to advertise their listings. If you are a registered real estate agent looking to advertise on our website, you can find out more here
Evaluate rental agreements carefully
If the asking price or rent seems too low, be cautious. Pressure to make payments upfront is a red flag. Verify the agent and property before paying any rent or deposit. Ensure a legitimate lease agreement is drawn up and signed by both parties.
Here are our top tips for avoiding falling prey to property scammers:
1. Use secure communication channels:
Avoid using email for sensitive information. Instead, use encrypted communication channels or face-to-face meetings when possible. Always manually input email addresses from your address book to avoid sending information to similar-looking fake addresses.
2. Be skeptical of sudden changes:
Any sudden changes in banking details or payment instructions should be treated with suspicion. Be vigilant for signs such as spelling errors in emails, sudden and unexplained changes in terms, refusal to communicate over the phone, and any form of pressure to make hasty decisions. Verify these changes directly with the parties involved through a phone call or in-person meeting.
3. Insist on face-to-face verification:
Whenever possible, important documents and agreements should be signed in person. This includes verification of bank details and any changes to the contract.
4. Use reputable agencies and professionals:
Work with well-established and accredited property professionals. Experienced conveyancers and estate agents affiliated with recognized brands are more likely to have systems in place to detect and prevent fraud.
5. Report suspicious activity immediately:
If you suspect fraud, report it to the fraud department of both your bank and the recipient bank immediately. Quick action can sometimes stop a fraudulent transaction.
By staying vigilant and following these best practices, you can significantly reduce the risk of falling prey to property scammers and protect your investments.
To ensure you get the best rental property for you, we put together a rental property checklist to help you make an informed decision in any market
Tenant verification for landlords
Landlords should verify tenants thoroughly. Beware of tenants who pay a few months in advance and then stop paying. Tenants offering to pay higher rent may also be suspicious. Clearly define who is allowed to reside in the property to avoid issues where the tenant secures the property for someone else.
Here are 5 questions every landlord should ask when choosing a tenant:
1. When can the tenant move in?
This should be one of the first questions to discuss with potential tenants. If the landlord’s and the prospective tenant’s timelines do not match, then a landlord will save themselves (and the prospective tenant) the time and hassle of going through the rest of the screening questions.
2. Has the tenant ever been evicted or broken the lease agreement?
Most people will be hesitant to answer truthfully about this if they have indeed been evicted or broken a lease agreement before. However, if a prospective tenant has been evicted before, asking them about it will at least offer them the opportunity to (at the very least) explain the circumstances that led to the eviction. In some cases, a prospective tenant may never have had an eviction, but because they broke their rental agreement, they were forced to end the lease early. This may be understandable though. For example, in the case of a new construction or unruly neighbours. However, without significant reason, this could be considered a red flag.
3. Can the tenant comfortably afford the first month’s rent and security deposit?
If any prospective tenants display hesitancy when asked about the affordability of the deposit, this could indicate that they are not in a financial position to honour the rental agreement. Landlords should avoid tenants who try to negotiate to pay it off later or in instalments along with the rent.
4. How many occupants will move in?
The industry standard is that a landlord should not allow more than two people per bedroom, which is why this screening question should be asked. What landlords will also often want to know is whether any of the occupants are smokers and whether they are expected to smoke outside or cover the cost of the extensive property damage that smoking inside the unit can cause. Again, landlords might not get an honest answer here, but it never hurts to ask.
5. Does the tenant have pets?
Whether a landlord has a pet-friendly unit or not, this question still applies. If the tenant has pets and the rental accommodates them, find out what types of pets (and how many) will be occupying the space. This is also a great time to discuss any ground rules about keeping pets on the property.
Address payment issues promptly
If a tenant starts paying late or skips payments without informing the landlord, this is an immediate red flag. Address the issue promptly and follow proper legal procedures to resolve it.
Here is how to evict non-paying tenants
Staying vigilant and aware of these red flags can help you avoid falling victim to property scams. Always verify the legitimacy of agents, properties, and payment requests to ensure a safe and successful property transaction.
