In December 2020, the authorities arrested four individuals trying to sell real estate properties in a Cavite subdivision without holding a “Certificate of Registration and License to Sell” from the Department of Human Settlements and Urban Development (DHSUD).
What tipped off the authorities? The marketing company the four suspects claimed they were part of was not registered with any concerned government agency.
There are many real estate scams out there, but we’ve listed down some of the most common ones you need to watch out for:
The fake sale or rental by unauthorized agents
If you are scouting around for property to buy or an apartment to rent, make sure the real estate agent you have contacted is authorized by the legitimate owners. Before making a down payment or a security deposit, ask the agent for their credentials (such as an authority to sell signed by the person who owns the property) and verify them. Be wary if all they can show you are pictures and websites.
Double sale or rental
This means that unscrupulous individuals could try to sell or rent out a property to two or even more people and run away with the cash. In the end, two or more of you will be left holding the same fake titles or become occupants of the same rented property.
Sale of property using fake titles
Always check whether the name on the title is the same as the person selling the property and whether the size of the property and address are correct. The paper the title is printed on is textured and yellowish with a red border.
Lack of full disclosure
This not only covers taxes and liens and encumbrances attached to the property but also other factors like non-disclosure of basic and demographic information about the property. For instance, the property could be located in a flood-prone area, or there could be some land erosion. One must ensure that all property details are accurate, so it’s crucial to do your due diligence before purchasing a property.
Accepting down payments or earnest money in partial payment for unfinished properties
The real estate boom in the Philippines has resulted in many ongoing constructions works and this has become a way for unscrupulous individuals to sell units or houses in those developments even when they are not authorized to do so. Sometimes, the company doing the project has the best intentions but cannot fulfill its obligations for one reason or another.
So what should you do to avoid getting scammed?
· Deal with licensed and professional real estate agents only.
· Don’t fall for low prices. Always be skeptical when buying property and think, “What’s the catch?”
· Always look for a License to Sell.
· Check the title with the Register of Deeds. These are accessible public documents.
· Never sign forms where some of the entries are blank. Make sure every blank entry is filled out properly. In general, beware of signing anything.
· Be wary if the agent or company wants everything in cash.
· In the case of rentals, make sure you meet the landlord in person.
· Always check out property in person, and when you’re there, ask people living in the area of pertinent questions.