Famous for whitening real estate frauds

Besides whitening the black money, real estate sector in the country is also infamous for frauds and scams as the industry remain relatively unregulated. And as the property market goes digital, a new set of threats and risks have erupted in the real estate market for the investors.

Technology has made it easier for frauds to operate and some of the most common real estate scams that have recently surged include fake rental listing scams and out-of-the-country scams. Where fake listings take advantage of the online real estate marketplace by replicating legitimate property listings and reposting them elsewhere, out-of-the-country scammers present themselves to be unavailable to show the clients the properties before signing the lease contract. In short, things are taken care of in absentia.

Other threats include the requests for personal information, random property investment seminars with fake experts and professionals, and title fraud (identity theft and illegal transfer) where the scammer uses fake documents to transfer the property into his or her name, take loans against properties and leave the homeowners in financial distress.

Lamudi, an online property platform, has highlighted the alarmingly high number of real estate scams in the country where it says that the latest wave of real estate fraud involves the scammer taking photos and information from a current real estate listing, duplicating it, and using it to make a fraudulent rental listing. Such scammers usually ask for the security deposit/ token money and run away.

Some warning signs that the online platform highlighted while talking to BR Research were owners being out of the country or unable to meet the clients in person, clients not allowed to tour the home, the owners asking for personal information not required for transaction or forcing for cash transactions.

There is a need for mass awareness as the real estate sector gets digitised. Apart from the online listing sites, financial institutions also play a key role in regulating the sector. While there might be fewer regulations for property-related transaction, especially online property trading, financial institutions should step it up by increasing due diligence. Not only that but the buyers also needs to be educated on ways to avoid such frauds.