While buyers, sellers, tenants and landlords are distracted by the prospect of starting a new chapter, criminals are on high alert to take advantage of any opportunity that comes their way.
READ: Avoid these 'sophisticated scams' meant to fleece buyers, sellers and prospective tenants
Sadly, real estate professionals often end up the victim while playing the middleman between connecting buyers to sellers and tenants to landlords. That is why many implement some form of a vetting process before agreeing to meet with any new clients in person.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa says that agents screen clients to protect themselves as well as their clients against theft, fraud & other opportunistic crimes. “Before agreeing to meet in person, an agent will usually request a copy of your ID and a copy of a pre-approval certificate if you are an aspiring buyer. This is to confirm that you are who you claim to be and that you can truly afford to purchase the properties in your given price bracket,” Goslett explains.
As a rule of thumb, Goslett recommends that agents meet new clients at the office or public place first. “Use this as an opportunity to get to know their needs before showing them a home or pitching them for a sole mandate.”
When showing a home by appointment, Goslett advises agents to visit the area beforehand and be aware of any hazards. “To protect against theft, sellers are advised to lock away valuables and any personal items, such as letters or bank statements. Never allow access to the property without the agent’s presence and after any showing, check the premises at the end to make sure no windows were jammed open or security features were tempered with,” he advises.
READ: Stay safe | 12 tips to not get caught out by these property scams
In addition to these precautions, RE/MAX of Southern Africa shares some best practices agents should implement in their day-to-day operations to ensure greater safety for both them and their clients:
- Install a safety app with panic button (such as iFearLess)
- Try to schedule all appointments during daylight hours
- Avoid working late hours alone at the office.
- Avoid using ‘vacant’ in property descriptions.
- Have a safety protocol in place with your clients.
- Establish an office code word for trouble.
- Share your daily schedule with family, friends, or office administrator so they know where to start looking in case of an emergency.
- Ahead of any suspicious appointments, share your live location with a friend / colleague.
- Always ensure your phone is fully charged & your vehicle has enough fuel to ensure a quick escape if needed.
- Take self-defence classes and carry self-defence tools such as pepper spray.
- Take a first aid course and carry a first aid kit in your car.
- Know where the nearest medical centre and police station are, especially when driving to new areas.
- Trust your instincts and always be vigilant.
“While we hope our agents and our clients never find themselves in a dangerous situation, it is always better to be prepared and aware of the potential threats that exist when selling or letting homes. Implementing safety measures will reduce the amount of risk involved in these transactions and will go a long way towards keeping everyone out of harms way,” says Goslett.
READ: Watch out for these property buying and selling scams
Steve van Wyk, MD of Seeff Centurion, advised, (in a previously published article), on rental scams listed precautions with regards to sales and rentals to minimise the risks of falling victim to real estate fraud in either category.
Van Wyk says the below red flags should not be ignored when it comes to rentals:
- When a landlord or agent asks for a non-refundable deposit to secure the property even before you as the tenant have viewed it or before the agent/landlord have met you.
- When they keep cancelling show days. Consider whether there is even a property to show.
- When the rental rate seems too good to be true.
- When the agent/landlord keeps stalling/ignoring you or not getting back to you within a reasonable timeframe.
- When you are put under pressure to pay a deposit or to fill out paperwork before the required procedures have been followed.
- If an agent or landlord tells you that it’s not necessary to check your credit score or call for references, this should also raise concern.
- When you can’t find any information on the ‘agent’ on the internet, or when the agent does not provide an office number and email address in addition to their cell phone number.
- When an internet search shows that the agent has been reported for doubtful dealings in the past.
- When you can’t find info on the real estate agency online, or their website seems amateurish.
- When you call the agency that the estate agent claims to work with and either they don’t know who the agent is or the agent does not work there anymore.
- The status of both the estate agent and estate agency can be checked on the Estate Agency Affairs Board (EAAB) website.
- When the agent cannot produce a valid Fidelity Fund Certificate.
Van Wyk adds that he also advises people who know that they will be seeking rental accommodation to start looking for rentals timeously so as to avoid becoming desperate.
- “Desperation may lead to hasty decisions and unnecessary shortcuts, or may force you to settle for a place that you either don’t like or can’t afford.”
- Outlined below are some pointers that should raise red flags when considering a sale:
- When the selling price is too good to be true - no seller would want sell their property for less than market value.
- When the agent or seller does not want to disclose the location of offices, or when they are of no fixed abode.
- When the agent/seller goes AWOL on request of paperwork of the property in question.
- Inconsistency in the paperwork, i.e. land size, description, registered owners, etc.
- When a seller demands that funds to be deposited directly into their account without the involvement of a reputable lawyer or agent to handle the transaction.
- When immense pressure is put on the buyer to sign an agreement of sale and to pay a deposit as soon as possible.
- When the buyer is a cash buyer, but cannot provide proof of the cash.
- When a title deed search of the property shows another person as being the registered owner.
- When the buyer insists on taking occupation before any deposit has been paid or a home loan has been granted.
To avoid falling victim to property scams in South Africa, Paul Stevens, CEO of Just Property, offers the following tips:
1. Always use a reputable estate agent registered with the Property Practitioners Regulatory Authority. Using the PPRA’s website, you can search for an agent’s name to see if they are registered.
2. Conduct thorough research to verify the legitimacy of the property and the seller or landlord. Does the property exist on Google Maps? Is the landlord/seller willing to provide identification documentation to you for verification?
3. Insist on meeting with the agent at their office or the landlord/seller in person before viewing the property to ensure they are who they say they are.
4. Be cautious when providing personal or financial information online and use secure platforms for transactions.
5. Be wary of deals that seem too good to be true, as they are often signs of a scam. Is the rental incredibly low for the value you’d be receiving? Is the sales price far cheaper than the average for the area?
6. Never pay money upfront – legitimate agents and property developers will not require upfront payments other than to draw up your lease and complete your credit checks. If a landlord wants you to pay a deposit before seeing the property, walk away.
7. Consult legal professionals and bonafide property experts to ensure all documentation is legitimate and accurate. They have experience checking these kinds of documentation and have an eye for picking up any discrepancies.
8. Trust your instincts and walk away if something feels suspicious.
“If you’re a buyer, you can check the credentials of your agent by asking for their Fidelity Fund Certificate number and checking this with the Property Practitioners Regulatory Authority,” Stevens advises. "Then contact the Head Office of the property company they work for to confirm the agent and their branch is listed with them. Ideally, complete all paperwork in person at their office. Double-check with the relevant bank to ensure that your deposit is being paid into a trust account."
It is just as important for landlords and tenants to take similar care,” he adds. Managing property agencies, like Just Property, offer protection to tenants by placing rental deposits in trust accounts and partnering with regulated providers such as PayProp. "We also utilise expert verification tools to verify tenants and landlords, adding an extra layer of security to their services."
While conducting research through online portals is valuable for assessing market value and property availability, working through verified agents makes so much more sense. By following these precautions and consulting professionals, buyers, tenants, and landlords can reduce the risk of falling victim to residential property scams."
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