A competitive housing market may require fast action, but buyers still need to proceed with extreme caution. Here are a few common real estate scams to watch out for.
Today I want to talk from the buyer’s perspective and, more specifically, what they need to beware of when dealing with a seller or property agents directly.
Watch out for these common real estate scams.
“You cannot use your own banker.”
“Cannot use your own lawyer.”
“You must follow the seller’s lawyer.”
“If you buy this house from the seller, you must use his lawyer.”
“Pass your documents to me, I will handle your home loan application.”
“You have to pay for the seller’s lawyer fees.”
“Also, have to pay the RPGT.”
“You have to pay me a commission.” (Asking commission from a buyer)
Over the years, these are some of the lines I heard from a buyer when buying a house.
Most of the conversation happens when a buyer is trying to buy a house directly from a Seller or a Property Agent.
Usually, all these scripts are quite common among manipulative sellers or property agents.
They will give an excuse that if it doesn’t follow the way they want, it’s going to be “complicated” for the buyer.
But, the truth is, it is not complicated for the buyer, instead it was complicated towards the Seller or the Property Agent agenda.
FIND A GOOD LAWYER
The buyer simply needs a good lawyer to protect him/her from a manipulative or scrupulous seller/agent.
That is why as a buyer, you should appoint your own lawyer. Get a recommendation from someone experience, and you can trust as long as not recommended by the seller or agent or any party related to the transaction
You need a fresh eye to give you an undivided perspective of your transaction without any bias towards the seller.
Because, by the end of the day, you need someone to be on your side when things go wrong. Someone who can give you their professional advice and help you to fix things instead of a cover-up.
Lots of new buyers are also confused about what to pay and what not to pay. Some are the fees of a seller but the buyer ended paying for them. You want to avoid such a confusing situation.
OTHER MISTAKES
Another common mistake a buyer does is passing their documents to a property agent to help them with the financing.
First of all, your documents are confidential and highly private. You should not pass your documents to anyone especially people you don’t know.
Because your documents can be misused in many ways especially your income documents and IC copy.
Did you know, with these documents someone can apply for a loan on your behalf with an illegal money lender? Yeah, that is scary. So, stop giving your documents to a stranger.
DO THIS
Instead, you should directly pass your documents to your banker.
A banker is far better because to be a banker you have to attend many pieces of training and some of the training is teaching them how to handle client documents and information confidentially and privately.
Also, banks have to follow strict rules of the Banking and Financial Institution Act 1989 (BAFIA). And they teach the bankers about handling client information and documents.
However, you should look for your own banker. Because any banker associate with the seller or agent might have slightly biased to them and they might expose your information or documents to the party too. To be safe, find bankers that are unrelated to the parties.
I hope you find these tips beneficial, next time be smart and avoid the common real estate scams.
Good luck with your purchase!
Before you go, check out this article. You might enjoy reading this.
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