Investments in Concrete or Illusion? How to Be Deceived When Buying Real Estate Abroad

Investing in overseas real estate is considered one of the popular ways to preserve and increase capital. The possibility of receiving stable rental income, the reliability of investments, and rising housing prices make this market attractive. However, alongside legal transactions, there are numerous fraudulent schemes that lead to financial losses, legal disputes, and loss of property. 

Fraudsters use various methods of deception, including fake deals, selling non-existent properties, forging documents, and manipulating contract terms. To protect against such risks, it is important to understand the main fraud schemes and know how to recognize them.

Fake Realtors and Sham Deals 

One of the common ways of deception is the activity of fake realtors. They may pose as employees of well-known agencies, display fake licenses, and offer clients favorable conditions. Most often, such individuals use internet ads with attractive prices, which buyers respond to, hoping for a successful deal.

The scammers' scheme looks as follows: after the first contact, the potential buyer is sent photos of the property, a meeting is set up, or remote processing is offered. Then a prepayment is required, supposedly for booking the property, after which they disappear, leaving the client without money.

How to Recognize a Fake Realtor:

1. Lack of official agency registration.
2. Electronic contacts without a physical office address.
3. Demand for prepayment before signing the contract.
4. Pressure on the client for a quick deal.
5. Refusal to provide genuine documents for the property.

Some fraudsters use contract substitution. The document text may contain conditions under which the buyer loses ownership rights or is forced to pay additional amounts.

Fake Real Estate Offers 

Another common method of deception is the sale of non-existent properties or real estate not owned by the seller. Fraudsters post ads with photos of real housing, but after the deal is concluded, it turns out that the property has already been sold to another owner or was never for sale.

Main Fraud Methods:

1. Selling housing without ownership rights.
2. Selling real estate under arrest or pledge.
3. Using forged documents.
4. Inclusion of hidden conditions in the contract, limiting the owner's rights.

Particularly common are schemes with investments in construction projects. The buyer is offered to invest in a promising project, promising high returns. However, after transferring the funds, it turns out that the developer does not have permission to build, is in bankruptcy, or uses the money for other purposes.

Scam in Buying Housing Through Investment Schemes 

Real estate investment pyramids are another method of deception, whereby fraudsters attract investors' money, promising stable income from renting or reselling housing. In reality, such projects turn out to be schemes where payments are made at the expense of new investors, and ultimately, most participants lose their money.

Signs of an Investment Pyramid:

1. Guarantees of high returns without risk.
2. Urgent deposit of funds under the pretext of a “limited offer”.
3. Lack of transparent information about the developer.
4. Problems with returning investments upon refusal of the deal.

Another common scheme is the offer of installment plans with low payments. Such contracts may contain hidden commissions, as well as conditions allowing the seller to cancel the deal, leaving the buyer without housing and invested funds.

Fraudulent Real Estate Agencies and Their Methods

Some real estate agencies operate in schemes that violate buyers' rights. They may offer clients knowingly unfavorable conditions, hidden commissions, and legally non-transparent deals.

Common Ways of Deception:

• Inclusion of hidden fees and penalties in the contract;
• Use of fictitious intermediaries to increase the deal's cost;
• Refusal to provide original documents for the property;
• Imposing unnecessary services for which the client has to overpay.
• Some agencies execute deals with legal violations, leading to the annulment of ownership rights.

In other cases, the contract is drawn up in such a way that the buyer ends up obliged to pay additional fees not previously agreed upon.

How to Protect Yourself from Fraud:

1. Check the agency's registration and license availability.
2. Study the contract before signing, paying attention to hidden clauses.
3. Check the legal purity of the property by requesting extracts from registries.
4. Consult independent lawyers before purchasing.

Conclusions 

The foreign real estate market is attractive but requires a thorough check of all documents and counterparties. Mistakes in processing deals can lead to serious financial losses, annulment of ownership rights, and difficulties in returning investments. Attentiveness, legal verification, and rejecting suspiciously advantageous offers will help avoid fraudulent schemes.