Whether you want to live in the country or the city, having your own house and lot or condominium where you can settle down with your family is undoubtedly one of your goals. To prevent real estate scams, you must consider carefully before purchasing your own property. Having your ideal home demands hard work and wise investment.
Real estate scams exist in the Philippines, just as they do in any other businesses. The Anti-Illegal Real Estate Service Practices Interagency Task Force was established in July 2021 by the Department of Human Settlements and Urban Development, together with other authorities, to combat illegal actions in the housing and real estate market. The task force also intends to prosecute real estate con artists who prey on homebuyers, particularly Overseas Filipino Workers. As potential homeowners, you need to have a basic understanding of how these crooks defraud their victims in order to avoid being the next victim. Some of the most typical real estate scams in the Philippines are listed below.
Fraudulent Titles
Developers and banks can be victims of title fraud as well, although homebuyers are the ones who are most affected. Fraudulent realtors will persuade you to acquire homes that appear to be too cheap in this real estate scam in the Philippines. To make things appear authentic, these sellers generally manufacture bogus titles and documentation. These titles are typically obtained from government agencies and were forged at a low cost. The property that the real estate broker sells to the buyer is almost always a property that is financed by a financial institution. The good news is that obtaining a Certified True Copy of the land title from the local government can verify the authenticity of the documents presented to the buyer.
Real Estate Pre-Sale Scam
In the Philippines, real estate scams occur when a real estate developer offers buyers pricing and incentives that are too good to be true. The buyer will finally pay the down payment and monthly equity for the home because they believe the bargain is good. The property's development, however, will not be completed, and the developer will request extensions from time to time until the property buyer gives up. Even if all they can give is a schedule, shady real estate businesses would propose a non-existent project to potential purchasers. Regardless, you should be aware that some legal real estate developers pre-sell their houses.
Double Selling
When a realtor sells a property to two persons, it is referred to be a real estate scam in the Philippines. When the initial buyer fails to complete the transfer of title to their name, the realtor sells the property to another buyer without the knowledge of the original buyer. Both buyers have the identical title under their own names, which is what occurs. When a duplicate sale occurs, the court will recognize the person who either registers the property in their name, owned the title in good faith, or produces the earliest title as the property owner.
Scheme of Bait-and-Switch
In this misleading activity, real estate agents advertise properties that they are not permitted to offer. These homes are either not for sale or are handled by a different real estate agent. The property is posted at a cheap price to attract attention (bait), but when a customer inquires, the agent claims that the house has already been sold or that it is no longer available. Agents will then propose their own listings, which might be even more expensive than the prior offer (the switch).
Unlicensed Real Estate Agents
These illegal realtors are responsible for the majority of real estate fraud in the country. These scam artists, also known as "colorum agents," would lead their victims to believe that they are employees or at the very least linked with a reputable real estate firm despite not having the authority to speak on their behalf. In other situations, these phony real estate agents may even create a website that appears to be authentic, complete with listings that they have seen on the internet. After you've made your initial payment and filled out your personal information on their website, you won't hear from them again.
Inadequate Disclosure
This fraud occurs when less-than-trustworthy real estate developers, real estate brokers, or even house sellers suppress information regarding a property that may cause potential buyers to reconsider their purchase. It's not uncommon to stumble across homes that appear to have a lot of potential, but when it comes time to sign the contract or give the property over, you'll discover unexpected facts or data about the property. Hidden charges, title issues such as tax delinquencies or encumbrances, or less-than-ideal structural facts such as a weak property foundation are examples.
Foreclosed Homes and Lots
Because they are unable to see the property they are going to acquire, overseas Filipino workers are the most common victims of foreclosure scams. The con artist would pose as a legitimate homeowner or agency and falsify official paperwork for a buyer. The homeowner will then be unaware that the property is already a foreclosed house and lot. Most of the time, the buyer is given the opportunity to move into the property only to discover that it is a foreclosed home and lot that they must settle with the bank that foreclosed. And if you try to contact the dealer, you will never hear back from them.
Rentals of Fake Houses
This fraud may be carried out in two ways: utilizing a property that is unoccupied because the owners are away, or using a house that is actually for sale. The con artist will look for a home that has been vacant for a long time — either because the owners are not located in the nation or because they are on vacation. After then, the property will be offered to an unsuspecting buyer. They will either claim to be the owners or the owners' authorized agents. These con artists would break into people's houses and then replace the locks so they could demonstrate it to their victims. Following the production of official-looking contracts and other documentation, these impostor agents or representatives would want a security deposit as well as advance payment from the naïve tenant.
You should always do your full research to secure your future house. The process of purchasing a property necessitates extensive research. You shouldn't rely just on the realtor you've chosen. Make sure you know who you're dealing with by conducting a thorough background check. Find out if they are trustworthy and if the property they are selling is genuine.
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