Recent developments in which would-be property purchasers are defrauded money in Kenya are of concern to industry players. The fraudsters or scammers are looking for the would-be buyers and renters to con them out of their hard-earned savings. So, the first rule of real estate: if a deal sounds too good to be true, then it probably is. Here is a few ways to spot the fraudsters and how to avoid getting ripped off.
- Fictitious rental listing
Fraudsters do take advantage of the online real estate marketplace by copying legitimate property listings, reposting them elsewhere and posing as a genuine agent or landlord who is leasing the property. The cheats will usually ask for the security deposit or some easy to raise token down payment upfront. They would introduce a sense of urgency and often ask the unsuspecting victim to wire the money in advance while documentation is being processed.
- Never agree to wire money to someone you have not met in person.
- Always try to verify the identity of the person you are dealing with and confirm that they are a licensed real estate agent.
- Look for properties listed by well-known real estate developers and or property managers and trusted websites.
2. The out-of-the-country scam
In this scam, the prospective fraudster posing as the landlord or current owner says they are out of the country and unable to show you the property before you sign the lease or contract. They usually promise to send you the keys in the mail once the deposit has been paid in advance:
- Always insist on inspecting the property yourself.
- If the purported landlord or agent says this is not possible because they are overseas or unavailable, then walk away from the deal.
3. The fraudsters may requests for personal details
Somebody contacts you purporting to be out of the country and inquires about selling, buying or renting a property. In the process, he/she may then request for your personal information or banking details, which are used to steal your identity or rob money from your account:
- Never provide your bank account details or personal identification details to an unknown source over the internet.
- Never provide your credit card verification code to anyone.
4. Loan sharks and predatory lending
The elderly, low-income earners and inexperienced homebuyers are the principal targets of this type of scam. In predatory lending practices, home loan scammers take advantage of the most vulnerable by enticing them to sign up for mortgages with excessive fees and high interest rates. People who are tricked into paying more than they can afford risk ending up with a bad credit rating and can even lose their home:
- Do your research about the lender and don’t be fooled into signing on for a bad deal.
- Set a budget and do not exceed it. Do not let anyone convince you to borrow more money than you can afford to repay.
- Report anyone you suspect of engaging in predatory lending to the authorities.
5. Title fraud
This type of property fraud can be extremely devastating. Essentially it is a form of identity theft in which the scammer poses as the homeowner and uses fake documents to transfer the property into his or her name. They then get a new mortgage against the property, take the cash for them and leave the homeowner liable for the repayments:
- Ask your home insurance provider about title insurance, which provides the best protection against this type of fraud.
- Secure your personal data and never give away your personal documentation to an unknown source.