How to avoid a scam when buying a property?
How to avoid a scam when doing transactions with Brokers and Agents online.
Online fraud is rampant right now, most especially when it comes to investment opportunities like real estate. With a simple mock-up photo of a subdivision plan, architect perspective of the units and community amenities, you can easily be lured by FAKE developers and FAKE real estate agents and brokers.
Sad to say this but there is a lot right now on the internet. You see a lot of listings online using Classified Ad platforms and social media platforms. So how do you spot online scams for real estate? Here are some tips;
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Do look for HLURB (Housing and Land Use Regulatory Board) Licensed to sell number.
If you are buying a property inside a subdivision, it should have an issued License to sell by the Housing and Land Use Regulatory Board or HLURB LTS #. To verify if the project is real and it exists, you can double check the number through the HLURB website [click here]. All Applications and HLURB LTS # are posted online for verification. There are times that HLURB LTS#s are not yet released, and Developers already accepts a letter of intent to buy from clients, you can verify if there is an existing application for HLURB LTS for it by messaging HLURB office. Yes, they do reply.
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Do check the credibility of the Developer.
Is it a new developer or a pro? What were their previous projects? What is the feedback from the homeowners about their plans? Was it good? You can check the track record of the developer. There are a lot of portals that you can check. Google is one of the friendly ones. Check if they did receive awards and recognition, were there complaints against them and how was it handled? Developer and client relations doesn’t end upon turn-over of the unit, and it is just the start of the relationship. Any problems or issues you encounter while living in the property you purchased, you have to notify or inform your property developer about it. If they don’t respond to any, I bet clients will post their complaints online.
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Do check the credibility of your Real Estate Broker/Agent
The power of the Internet. Research, the person who’s trying to sell you a property online. Is he/she a real estate broker/agent? Is he/she under a Realty? A member of a Realty with a track record? A member of a Realty with international or national awards? Did she have criminal complaints? Do they have complaints about fraud or a case about Estafa? Yes, it matters. Why? Because you will be purchasing a property that cost thousands and even millions. Your hard earned money will be used to acquire that property. Doing your due diligence won’t hurt you.
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Don’t send money to your Real Estate Broker/Agent (as much as possible)
Money matters needs handle with care. Do not just send out money to your real estate broker or agent for either reservation fee or monthly equity payments. Unless otherwise, you have a notarized/consolized written agreement with your broker/agent that he/she will be receiving the payment and should pay the said amount on your behalf to the developer. The broker/agent should then give you the copy of the OFFICIAL RECEIPT FROM THE DEVELOPER, and the admin or marketing personnel of the DEVELOPER should then communicate to you informing you about the receipt of your payment. However, to be safe, send the reservation fee/monthly equity/amortization to the developers account directly. The developers would be thrilled to give you their account number, and you can send your payments there directly. Although it may take few days and probably weeks for overseas payments to credit in their account, it is safer than sending it to someones personal account. Safeguard your investment and do it right the first time so that we can prevent any account problems in the future If you are sending money to your broker/agent monthly make sure you receive your OFFICIAL RECEIPTS.
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Don’t send your documents to your REAL ESTATE BROKERS/AGENTS.
Your loan documents should be sent directly to the DEVELOPERS address. Just like money, your loan documents are confidential, although technically your real estate broker/agent already know about it. But the tendency of the documents to be used illegally is there. So better safe than sorry.
However, if you really have to, you may also request an official acknowledgment receipt from the developer’s admin to acknowledge that your documents were received by them through your agent or broker. Always request for proof of transactions like a photo, scanned copies receipts and forms to update you and request for the hard copies to be hand over to you when you arrive from overseas or be received by their SPA’s (Special Power of Attorney).
If by any chance you are scammed by your real estate broker/agent;
Make sure you keep all your evidence and proof of transaction or remittance. Make a formal written complaint to the Realty he/she is in so they can call the attention of the broker/agent in question, with the complete details of the transaction. If needed you can file a formal complaint against the broker/agent in question.
Here’s an actual story; We received stories like the client buyer sent money to the real estate broker/agent to reserve a property he/she is selling. They gave their money to the broker/agent and received a letter of acknowledgment that their money intended for the property was received. However, it turned out that the said broker/agent did not pay the money to the developer’s account, which means the money that was intended for the reservation of the property did not reach the developer. The reservation fees are usually only valid for 30 days, and beyond that, the said reservations are canceled and will be open again for sale. Without the buyer knowing that it lapsed, they would assume that they have secured their initial investment. The broker/agent then informed the client customer that the reservation expired and they would have to pay again. But the truth is, the broker/agent did not apply the reservation in the first place.
Another story was, the client buyer chose the deferred payment option to pay for the investment. They already completed the full amount thinking that the developer received it. When the customer buyer verified his/her ownership to the developer, he/she was surprised that there was none. Good thing she has the complete copy of all the transactions with the broker/agent and now they have a case.
You see even if these brokers/agents are licensed, or PRC registered, fraud still happens. For us to safeguard our investments, it is always best to have due diligence to protect yourself from being scammed most especially online.
Do you have other tips to share? Comment your tips below.
