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Tom Muleya-Fraud Insight
Real estate fraud is big criminal enterprise that targets potential home seekers, resulting in victims being denied becoming proud home owners. Like any other crime, real estate fraud has been in existence since time immemorial and is a living reality amongst us. It is therefore incumbent that any home seeker exercise due diligence when acquiring a residential property.
But what is due diligence? In this context, let me define ‘due diligence’ as a deliberate act encompassing all reasonable steps taken by a potential buyer in order to avoid falling victim to real estate fraud, when intending to buy a residential property.
When buying a residential property, it is important to realize that money in possession of or in the hands of the potential buyer is at high risk and needs safeguarding. When the potential buyer engages in any unreasonable steps, it is sure case money will easily land in the hands of fraudsters.
In the previous articles, we noted that the chief perpetrators in real estate fraud are bogus real estate agents, bogus land developers, and bogus lawyers working in cahoots with employees at local city councils and deeds office. Alongside this class of fraudsters are chancers. These are individual fraudsters involved in real estate fraud who perceive an opportunity or security gap and maximize it to dupe unsuspecting victims. It was also shown that “desperation” for housing was the major leading factor causing unsuspecting Zimbabwean home seekers to be duped.
The real estate fraudsters are involved in the sale of non-existent residential stands and houses, title deed fraud, sale of a single property to several people, properties left vacant (where owner is deceased), rented property, property where the lawful owner lives overseas, property which does not have a mortgage against it, and property not yet registered with the Deeds office.
As part of an exercise of due diligence process, consider the following steps when intending or buying a residential property;
• Plan on the method you intend using to purchase the residential property. This involves deciding well in time on how you intend to buy the property e.g. buying through an Estate Agent, Land Developer, Mortgage, dealing directly with the Seller, and or employing your relative to buy on your behalf. The method should inform the security steps you may consider.
• Conduct a pre-check. This involves carrying out an investigation or inquiry prior to buying identified property of interest through key stake holders such as the Zimbabwe Republic Police (ZRP), Real Estate Council, Local City Council, Registrar of Deeds, and Regulatory Office for Housing Co-operatives, Ministry of Local Government, and Land Development, among others. For example, the Police will advise you on real estate scams that are prevalent and how you can avoid becoming a victim. And when buying through a Real estate agent, the Real Estate Council will advise you on whether you are dealing with a bogus or legitimate estate agent.
• Watch out for some of the tale-tale signs or red flags of real estate fraud. In the previous article, I listed a number some red flags that include absence of original title deeds, setting for performing the transaction, owner of residential property is said to be overseas, price or offer is too good to be true, owner alleges medical condition as reason to dispose property, seller has no fixed abode, seller exerts a lot of pressure on buyer to sign agreement, seller instructs buyer to pay directly to him or her instead through the lawyer, inconsistency in paperwork, seller failing to furnish all important documents, plastic ID of seller appears to have been recently obtained among others.
• Avoid making hasty decisions. It is only people driven by desperation who do such acts.
• Only sign agreement and make payment when you are rest assured that it is safe to do so.
• If some doubt is cast in your mind, quickly disengage. It’s better to remain with your money than to lose it.
Get empowered by Fraud Insight and be part of a solution to real estate fraud. Stay tuned for other upcoming fraud issues.
For your feedback, WhatsApp line: 0772 764 043, or e-mail:[email protected]. Tom Muleya is a Detective Assistant Inspector working under the Criminal Investigations Department. Harare. He is also a member of the National Cyber Security Taskforce, Zimbabwe.
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