Are you interested in investing in real estate, but fear of Property Scams pushes you back? Are you unable to spot property scams? then don't worry because we have got your back.

In Pakistan, there has been a significant downfall in the saving rate and a rise in consumption rate since 2000. One of the reasons for this trend is the sudden bloom of real estate businesses. Today, real estate is the most profitable business in Pakistan. Do you know that a real estate agent earns up to 20% of a return every month? Over the past two decades, people have doubled their wealth by investing in real estate. With all perks of being a profitable business and a means of doubling wealth, there has been a lot of fraud involved in this business. Due to a lack of information and no authentic guidelines majority of the people have suffered from Property Scams. Which can be devastating for a middle-class person with such a high inflation rate and economic conditions. Bodla group is here for a complete set of guidelines that can help you in avoiding Property Scams. After reading this blog, you will be able to identify and avoid Property Scams.

Following are the steps you can take to spot and Avoid Property Scams:

• Market research

Do your market research before you decide to invest in any property. Market research will help you identify the latest market trends, economic trends, and demographic trends. Through real estate market analysis, you will be able to identify the fair value of the property, authentic dealers, verified documentation processes, and reputable agencies. You will need to consider many options for the final decision-making. The detailed market research also involves the comparison of prices of different dealers and then choose the best option suited to you.

•  Avoid Online form filling

A big NO to filling out online forms! In this fast era of everything be digitalize and quick, you need to slow down when it comes to matters like this. There are plenty of websites that will offer you properties in different ranges that are completely fake. These property dealers will be communicating with you online and sometimes they might even communicate with you on a phone call. But they might ask you to fill a few forms online as their company's formality to proceed with things forward. They will request your debit card or credit card number, Bank Account details, or National Identification card number. No matter how much the website seems good, or its publications are impressive, you do not need to provide your personal information to online property portals.

• Trustworthy Real estate agent

Make sure that the agent with whom you are dealing should be reliable. Firstly, fake property dealers might try to sell the property to more than one person. After getting all the payments they ran away. Another scam is fake property dealers who might try to fool buyers by asking for a heavy amount of payment in advance without handing over the original documents. Get in touch with a reliable real estate agent and make sure that he/she belongs to a well-known real estate agency. Try to deal with those property agents whose previous records could be traced easily.

• Background check

The background check involves a cross cheque of the fair market value of the property, the reputation of the real estate agent, the previous project of the dealer, land authenticity, and documentation. Search for the listings of properties like the one you are interested in on the different authentic websites. Do not rely on the prices that the property dealers told you. Because they quote much higher prices than the fair market value and put aside their commission from the payment. Most property dealers trick the client by doubling the actual price. Make sure that there is no dispute on the land.

• Do Registration

Before making any investment decision, make sure that the land is registered and not occupied. In Pakistan, registering land is very complicated and insecure because the law does not protect the investor. Since the patwari's record carries speculative value only, the purchaser must investigate the 'chain of title' by carrying out important due diligence to ensure that the present owner has a good root of the title. That state does not take responsibility for the investor's title. So, solely you will be responsible for any mishap that might arise because of buying nonregistered land.

• Verified Documents

You don't need to sign documents that seem suspicious to you. Majority of the Property Scams occur because of fake documentation. Do your homework! Understand the legalities involved in the whole process of documentation. Consult any property lawyer or law institution that could help you to spot and avoid fraud in the property documentation. Land records of Sindh and Punjab are available on the internet now. Consult local land authorities like Punjab Land Authority to check whether the land is verified or not.

• Unseen Property

The idea of renting or buying a property that you just saw on a map seems good too. The picture of the property and location is also sent to you by the property dealer. The fuss of traveling and inspecting the property or plot especially if you live away from the area might make you buy the unseen property. Wait a sec! Never do this to your money! You will trust the property agent with your investment, and he/she might also ask you to no longer worry about it. You do not need to trust the GPS location, maps, or pictures sent to you by the property dealer unless you have visited it yourself. Don't rush and have a visit to the property that you are purchasing yourself. Properly inspect the property and then make the decision accordingly. Try to confirm the originality of the purchasing documents.

• Secure investment

Nowadays with the many real estate agencies and marketing agencies, it has become difficult to identify whether your investment is falling into secure hands or not. You need to secure your investment by going into all the legalities yourself. Go through different laws.

According to the Registration Act 1908, the property should be registered. This act has 15 sections and all the relevant guidelines. The stamp paper charges that confirm your agreements fall into Stamp Act 1899. For transferring property, the rules that apply are mentioned in the Transfer of Property Act 1882. Many websites nowadays have plenty of false listings, stay alert and don't fall into the trap of deciding by false listing.

• Lottery

It's quite a scam nowadays that you will receive the news of winning the lottery. The news you might receive might be through a call, email, or text message. You won't remember when you participated in the lottery, but the caller will make sure to gain your trust by telling you that during online shopping or during visiting the website you took part in it. They will ask you to pay certain taxes and charges because it's their company policy. Stay away from getting into scams like this because you are never gonna get the plot or property that you have won according to that lottery. Avoid giving your personal information and bank details. Ask for the Sales Tax Registration Number or National Tax Number. Keep in mind that authentic lottery schemes never ask you to pay a huge amount of money in advance!

• Authorized real estate agency

Make sure the real estate agency that you are dealing with is authorized. Don't go for local real estate agents. Try to meet the owner before finalizing the deal with the dealer. Your dealer's agency should be listed and verified by the concerned authorities. Visit the office yourself and go through testimonials of the previous clients. It will be better if you get in touch with their other clients. Visit their website and publications that will give you a clear picture of the authenticity of the agency.

• Approved Layout

Make sure to ask for the approved layout of the area. The documents should contain the exact location of the area to avoid different conflicts. You will need to keep track that whether the buyer has provided the authorized construction blueprint from the seller of the already completed property. Don't rely on the information given in the brochures and advertisements because they just want to hype up their marketing campaigns for the sake of sales.

• Advance payments

Avoid purchasing a property that asks you to pay in advance. Don't pay in cash, rather than use a pay order. Pay order allows you to have physical evidence of the payment you made. In case you are paying the advance then make sure that the amount of token should not be greater than 100,000 PKR.

• Detailed cost breakdown

A detailed cost breakdown is a schedule that includes all the expenses incurred according to the plan during the whole deal. It is approved by the bank or any related institution. The details of the basic price, GST Tax, External Electrification, and electric connection charges, Water, sewerage and drainage charges, Registration and stamp duty, External development charge, Legal charges, Preferential Location Charge (PLC), and sometimes interior costs too are highlighted in the schedule with all the down payments. Try to incorporate the cost breakdown in the transaction contract so that it can be legally enforceable. Property dealers do not reveal the individual costs and ask for the lumpsum amount. Before making any decision, ask for a detailed cost breakdown that gives the type of costs involved.

Conclusion

With the sudden boom in the real estate industry, there are major chances of an increase in the fraud aspect. Many people are not investing or are disappointed with the scams going on nowadays. Keep all the aspects mentioned above and save your hard-earned money. Don't rush and do your homework. Contact us for related queries. We hope that this blog will help you to spot and avoid Property Scams in Pakistan.