Real estate transaction scams: What buyers need to know

KUALA LUMPUR: Buying or selling property is one of the largest financial transactions in a person's life. Whether buying a first home, investing in property, or selling an existing asset, the process involves large sums of money and complex legal documents.

However, this also opens the door to various forms of fraud that can cause significant losses to victims.

Impersonating real estate agents

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Fraud by individuals posing as real estate agents is becoming more common and often targets victims who are looking for affordable housing.

In most cases, scammers will offer properties at prices far below market prices to attract attention, then urge victims to make a deposit payment immediately on the grounds of high demand.

To avoid becoming a victim, the public should always be alert to suspicious signs such as agents refusing to meet, failure to show valid documents, or requests for payment to a personal account.

As a preventive measure, consumers are advised to check the status of agents through the valuation board or real estate agents. In addition, avoid making any payments before physically viewing the property and signing a valid written agreement.

If fraud has occurred, victims should immediately contact their bank and file a report with the Royal Malaysia Police (PDRM) or the National Fraud Response Centre (NSRC) to increase the chances of further action being taken.

Being cautious and not rushing is the key to protecting yourself from becoming a victim of real estate fraud.

There are also cases of forgery of real estate documents. Fraudsters can forge land grants, sale and purchase agreements or owner identity documents.

With these fake documents, they try to convince buyers that the transaction is legitimate.

Without careful checking, buyers may be fooled and make payments before realising the fraud.

To overcome cases of forgery of real estate documents, buyers need to take precautions by conducting thorough checks before proceeding with any transaction.

Among them, ensure that the validity of the land grant and ownership status is checked through authorities such as the Land and Mines Office. In addition, use the services of a certified real estate lawyer to examine each document, including the sale and purchase agreement, so that any invalidity can be detected early.

Buyers are also advised to verify the identity of the seller and ensure that the transaction is carried out face-to-face, not just through online communication.

In addition, avoid making payments directly to individuals without going through official channels such as a law firm account.

Fake property ads

Scams can also occur through fake property ads on the internet. Scammers will use pictures of real homes taken from other websites and promote them as properties for sale or rent.

They will then ask for a reservation fee or deposit supposedly to 'lock' the deal.

Before making any payments, make sure to physically visit the property and avoid paying a deposit just to 'lock' the deal. If an offer seems too good to be true, it is most likely a scam.

Double sale scams

Apart from fake agent scams, forged documents and fake property advertisements, there are several other types of scams in the property sector that you should be aware of.

One of these is the double sale scam, where the seller sells the same property to more than one buyer at the same time.

Victims usually only become aware of this when the transfer of ownership process cannot be completed. There are also cases of non-existent rental scams, where the fraudster poses as a landlord and rents out a property that they do not actually own, then disappears after receiving the deposit.

Non-existent or abandoned housing projects

In addition, there are also non-existent or abandoned housing project scams, where irresponsible developers offer projects that look convincing but in fact have not received approval from the authorities or have never been started.

In this case, buyers are encouraged to check the status of the project with the Ministry of Housing and Local Government before making any payment.

Buyers should be careful in payment transactions, as most frauds occur when money is transferred without proper verification.

Any deposit, booking or initial instalment payments should be made only after documents are verified and the transaction is handled through legal channels.

Buyers are encouraged to use a law firm account or official payment method that can be recorded, rather than transferring money to an individual's personal account whose status is unclear.

Keep all receipts, proof of transactions, chat messages and copies of documents, as all of these are very important in the event of a dispute or fraud report in the future.

Buyers should also not make hasty decisions just for fear of missing out on the opportunity to own a property that is said to be 'cheap' or 'limited'.

Fraudsters often use pressure tactics such as demanding immediate payment or giving a short period of time to influence the victim.

In such situations, buyers need to stay calm and seek the opinion of family members, lawyers or real estate experts before making a large financial commitment.

Patience, thoroughness and rationality are essential so that every decision is made based on facts and not just emotions.

In conclusion, awareness and knowledge are the main keys to avoiding fraud in real estate transactions.

By conducting thorough checks and seeking advice from certified professionals, the risk of becoming a victim of fraud can be significantly reduced. - The author is a lawyer at J A Nabila & Co.