The real estate market is the favorite industry of Pakistan for investment of all time. A real estate investment involves large amounts of money, effort and time. A market where investors feel a sensible place to use of money to get profit but a Market is full of frauds/scams. Hiring a real estate agent has become a trendy need to deal with the market tactics for the sale and purchase of properties or for renting a place.
For this reason, you must be very careful with this important transaction. Unfortunately, there are people who, knowing that there are large amounts of money involved, look for ways to defraud people, leaving them without their investment and property.
Here is a rundown of scams typically plaguing the Pakistani real estate market that investors need to keep an eye out for:
1-Online Form filling website:
Online marketing is the new trend with eye catching techniques to capture the investors with a number of frauds.
The real estate marketing companies and housing societies offering online registration form for booking where you have to submit information including your id card number, your credit/debit card number or bank account number. The most targeted investors are overseas Pakistanis who are easily trapped by such online frauds/scams.
2-Sale of one land to more than one person:
A very common fraud of real estate agents is collection of advance from different investors for one land and then disappearing.
3-Fake Registry Papers:
Another common fraud tactic used by “so called” real estate agents is the collection of information of specific plots whose owners have not visited their property for a period and make fake registry of the property. Many people get spellbound and pay full payment to them.
4-Low cost Bungalow:
In few cases it has been observed that owners of the house especially overseas investors hire a caretaker or an estate agent to look after the property, who eventually ends up acting as the owner of the house. They deceive you by hiring another estate agent, who approaches you in way that a bungalow which is of 4 crore and someone purchasing it in 1 or 2 crores because owner is going to leaving the country.
In other cases overseas investors who opt for renting the property as a source of income end up with losing the property as the tenants occupy the property or sell the property by acting as the owner and move to another location.
5-Replacement of Unmarked plot:
Investors who buy a plot/land in a non-developed area for purpose of long time investment and pay full payment at time of transaction. If the investor does not mark the property with boundaries and gets it registered, then there is a high risk of your land getting replaced to another, in case someone else pays a hefty amount as market rates of property is getting higher.
There is also possibility that the property gets occupied by land grabbers, most of the time people targeted are overseas Pakistani investors.
There are many fake agents that trick investors who are not familiar with the market trends into buying and selling of property. By receiving heavy amount of commission from both parties or asking for advance payment of the property. But do not trust such agents until you have visited the property physically and met the real owners and also visited the office of the estate agent.
7-Hidden charges and added services
A common incident that we can find is that the property has charges such as an unpaid mortgage, an embargo or debts with the Public Administration. The solution, check it. To do this, you must go to the Land Registry and ask about the state of the property.
This way, you make sure everything is fine. However, legal issues are one thing and the physical condition of the home is another. It is that a common problem when buying a flat is the lack of knowledge of their condition.
Another fraud is identity theft, which presents false documents and information to sign and flee with the money.
Fake loans are also a problem that results in an even bigger mistake since the payment of interest is high and it has rates that can mean the loss of the apartment and worst of all, keep paying the loan.
8-The real estate offices cannot be located
Every safe real estate agency must have offices that you can locate. A sign of possible fraud is when the real estate agency cannot verify your tax address or tell you that for some reason they do not have offices at that time.
Do not forget that to make sure you are dealing with a safe and legal real estate agency you must verify that its registration exists with the authorities. If not, it would be advisable that you dispense with their services. You can also research their reputation, veracity and transparency online as well as review comments from other clients.
9-The ad has little information
In the search for your property to buy, you can find false ads from real estate fraudsters. So that you can easily identify them, you should check that the ad has the necessary information such as photographs of the property, address, contact details of the seller, among others. Or, make sure that it is not an advertisement copied from a real one and that false images or information are being used.
The occurrence of imitation documentation is among the very Common property frauds you want to prevent. Has another party handed you within the first property records or not? This is only one of the most concerning queries which disturbs everyone involved with a certain property deal. It is extremely important to thoroughly confirm papers with the support of suitable ways.
11-The seller put conditions prior to the contract
The biggest real estate fraud alert is when the seller asks you for personal and bank details, or an advance deposit as a condition to move the property or some other reason that seems logical. Avoid providing this type of information or carrying out procedures before contacting the seller formally, and under no circumstances give any amount of money if there is no contract of sale.
12- False listings
A Whole Lot of Sites in Pakistan promise to be property portals. The majority of them don’t own a suitable confirmation mechanism or any authenticity to prove that they are real agents. The issue of false listing is not going away anytime soon, and you need to keep alert because it among the most frequent property fraud you want to prevent.
13-Being pressured to make decisions
Buying a real estate property is an important decision that needs time to analyze and consider due to the investment that is being discussed, something that a seller or real estate agent must understand and so they should give the buyer their space and time to think about your decision. If the salesperson is pressuring you into making a decision and is trying to make you act rashly, it’s a clear sign that this is a scam and you’d better stop the process.
14-Falsely communicated market value
Never only rely on land brokers. Typically, these People today multiply the true cost by three or two, in order to fool the customer. if You Would like to understand the actual value of a real estate property which you enjoy search yourself and confirm prices from many places.
15-Buying or renting an unseen property
It is the biggest mistake that many Property buyers and renters can do. To be able to prevent the bother of visiting and travelling the property themselves, some people today risk their money by purchasing or leasing a hidden property. Digital mediums such as GPS, maps and graphics posted on a site should not be sufficient for you to enter a real estate bargain.
Precautions to save yourself from scams:
Hiring an agent, you have to make sure that agent is experienced and is certified by the official authority. If you are new in real estate market and do not know the trends do not hire an inexperienced agent. After hiring a successful and experience agent with negotiated commission. He can help you to find the land you are looking for.
- Make sure land is registered and not occupied. And registry papers are original.
- When you have paid full payment of property, do register it and mark the boundaries of your land.
- Avoid paying in cash. It is always better and secure to pay using pay orders.
- Make sure the token receipt has the complete address or file number of a property.
- Your token money should be in between rupees 50 K to 1 Lac.
- Do ask for a receipt from owner/agent about the token money.
- Also do not forget to read our previous blog about things that can go wrong in real estate sale.
- Study and research the market.
- Trust most of the opinions and comments, but not all.
- Invest time and money in finding a professional. It carries the payment, but the cheap in the long run is expensive, and more, in such an important investment with a property, so our recommendation is to bet on insurance.
- Check the status of your future apartment by asking in the registry.
- Investigate the agency or real estate with which you sign the contract. Make it clear and legit!
- Trust is earned, so request information in advance.
What to do before buying any real estate property
1.Meet the seller
A good way to get to know the seller is to ask him for references of previous real estate projects he has carried out. So you can check if they have finished and you could go to the administrator of the property and ask them for references. If he is a seller who does not have projects, and does not send you any official document that proves that he is the owner, it can be a scam. When choosing where you will buy your home, it is better to look for a company that has a track record and experience in the market.
2.Check who owns the land
The first step to avoid scams is to ask for the deeds of the land where the society will be built. When you have them, you must verify that the land is in the name of the main person or company that is going to build the society project.
3.Review construction plans
Another important thing is to verify that the architectural, structural, electrical and sanitary plans are licensed by the City authorities. Also check that they have a license of property.
It is important to check that the documents presented to you by the owner of the property or the land where or by the real estate agent, are already recorded to legal authorities this way you avoid being presented with false documents.
5.Get legal advice
Having the accompaniment of a trusted lawyer is very important to take care of any scam. This way you can ensure that the contracts signed comply with all the regulations and have the corresponding guarantees.
6.Read the documents before signing them
We know it sounds obvious, but it is important to read everything several times before signing it. Ask all the necessary questions about the clauses of the purchase contract to your lawyer or the notary.
This among the most frequent property frauds you Want to avoid. You get vulnerable to land scams when purchasing property in Pakistan when you get in contact with unidentified property brokers. You have to make sure if the individual that you’re trusting with your cash is a member of a confirmed property agency working in the region.
Know any other real estate scams? Spare some time and share your real estate scams/frauds details with us in the comments section, or join our social media platforms right now.