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Real estate scams on the rise in 2022

Key takeaways

Property settlement scams are becoming more and more common now that house prices are at record-highs.

You should stay vigilant as there are many types of property scammers today.

Before making any significant investment make sure that you get independent advice.

Have you heard the horror stories about unsuspecting property buyers falling victim to redirection scams?

They buy a property and secure the deal by transferring their entire hard-earned house deposit to what they think is a conveyancer or real estate agent.

By the time they realise it’s in fact a scammer hacking email accounts it’s too late.

The funds are gone.

And these property settlement scams are becoming more and more common now that house prices are at record highs.

Property Scam

The Australian Competition and Consumer Commission’s (ACCC) Scamwatch receives on average about two reports per week of payment redirection scams in real estate, ABC News reported.

March 2022 saw 14 reports alone — the highest figure in 15 months.

“Twenty-five reports were made this year, which is an increase of 25 per cent on the same period in 2021, and losses this year are up 186 per cent to $1.8 million,” an ACCC spokesperson said.

NSW, which has the nation’s most expensive property market, accounts for three-quarters of the $4.3 million lost through this scam around the country from January 2021 to the end of March 2022, according to news providers.

And Chris Tyler, chief executive officer of the NSW division of the Australian Institute of Conveyancers (AICNSW) also told ABC News that buyers aren’t the only ones being targeted by the scams.

Fraudsters have even used payment redirection to scam the stamp duty a conveyancer had intended to transfer to state revenue.

“Because property transactions are so high in value, all the parties in the transaction are being targeted: The real estate agents, the mortgage brokers, the conveyancer,” he said.

“Half the time the deposit could be a couple hundred thousand dollars.”

Scams also happen with rental properties

Consumer Affairs Victoria warns of a rental swindle where scammers advertise rental properties on well-known property websites.

When you express interest, they say they are overseas or interstate and that you must conduct the transaction online.

Also, scammers may show you through a property, when they have no right to rent it to you.

The scammers may try to appear genuine by providing photos, real addresses of properties, land title deeds, and even scans of stolen passports.

They scam you by asking for a month’s bond and rent to secure the property. If you pay by money transfer, there is very little chance of recovering your money.

Scammers may also ask for personal details such as bank and credit card numbers and driver’s license details, which they use for credit card and identity fraud.

But there are other types of tricks that catch out unwary investors.

Here are 6 common property scams to keep an eye out for.

Property Scam2

1. Adviser or property marketeer? 

Often novice investors are keen to get into property because they believe that property is a good investment – but they’re daunted by the whole process.

It all seems too complicated.

But then someone comes along and offers to “take care of everything” giving our beginning investor a feeling of relief.

A one-stop shop sounds convenient, but be wary.

Many so-called advisers are really property marketers representing developers so they can’t really be on your side, can they?

Now while this isn’t really a scam, I’ve seen many unsuspecting beginning investors commit to overpriced, underperforming properties meaning they miss out on the profits they could have made.

Protect yourself by getting advice from an independent property strategist.

And if you do buy from a property developer ensure you get an advice lawyer who has no connection to the company selling the property, a finance broker who represents you, and either a valuer or independent confirmation of the property’s value.

2. Marketing pamphlets

Watch out for those pamphlets in your mailbox or those unsolicited emails that promise the world.

Guaranteed income,” it assures you.

Risk-free investment.

Or even, “Become a millionaire in 3 years.

If it sounds too good to be true it probably is.

Property Scam3

3. Seminars and webinars

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