Real estate transactions involve the leasing, renting, buying or selling of property and is viewed as a very profitable venture. Unfortunately, scams and frauds are a common feature within the sector. This article identifies red flags in real estate transactions you must watch out for.
Scam or fraud is a major obstacle bedeviling real estate transactions in Nigeria, this is largely due to the fact that most people are not knowledgeable or versatile about real estate transactions and often require the help of a third party. They trust the third party to do justice to their investment and fail to conduct proper and adequate due diligence themselves.
Also, another reason people get conned is when they want to cash in on an ‘opportunity of a lifetime’ and are quick to invest in what is probably a hoax which once again pinpoints the fact that due diligence is important.
Although circumstances surrounding every transaction can be different, there are signs you should watch out for to ensure you are making the right investment and not being duped. Below are some of the red flags in real estate transactions you must know:
1. Be wary when agents or sellers tell you the property will be out of the market if you don’t pay up immediately: Some real estate agents would make you believe other buyers are interested and put you under unnecessary pressure, cajoling you to pay so as to take possession of the property before other people do.
What this does is that it doesn’t give you time to investigate the property properly and ensure it is genuine. No matter the rush for the property or the number of people interested in the property in question, don’t be in a rush or put yourself under undue pressure.
2. When an agent or seller insists you pay in cash, there is trouble: Most fraudulent sellers take this route to avoid being traced. Whether the person is a friend, family or acquaintance, insist on doing the transaction through a reputable bank for record purposes. This gives you leverage in case there are problems later and can be used as evidence in court.
For no reason should you pay an agent in cash, whether partial installment or the full amount. You might end up not seeing your money as well as your property.
3. If you are unable to view the documents of the property, relax!: Take a pause and hold off the purchase. It is possible the person selling to you isn’t the owner so insist on seeing all the necessary documents before cash exchange hands. Even when you have been shown the documents, it is in your best interest to verify them and be sure they are genuine before making any commitment.
4. An agent or seller that refuses to allow you bring in your own experts to survey the property is up to no good: In this case, It is in your best interest not to progress with the purchase of such a property until you get your way. Don’t be fooled if the agent tells you he is a surveyor or can give you a proper assessment of the property. There is no way you can verify the authenticity of the person so it’s better to be on a safe side and bring in someone neutral, preferably, someone you know and can verify his or her integrity.
5. Check and double check again when you are being sold a property, especially a landed property that is already fenced: Don’t be over excited that you don’t have to pay for the cost of fencing and quickly pay up. Check things like how old the blocks are and if it is a freshly plastered fence, if the seller has a building plan approval that gives him the right to construct a fence and erect a building. Even if he doesn’t have a building approval, ask for documents to show the seller is the one that really fenced the property. Basically, do proper investigation.
Do you agree or disagree with any of the above points, share your thoughts with us in the comment box below.