Being a lucrative industry, real estate has, over time, come to have its fair share of unscrupulous dealers. These dishonest sellers, agents, and developers take various means to take advantage of the unwary buyer.
To this end, make sure that you can spot a scam from the real thing. Take note of the common real estate scams in the Philippines, which include the following:
1. Pre-selling scams are among the most notorious in the Philippines. Pre-selling refers to selling projects or property that have yet to be built -- it's the usual practice among condominium projects. While many of these are legitimate offerings, scammers will often take advantage of this marketing strategy by luring in buyers and investors with low costs and incentives, and then leaving them up in the air with an unfinished or an inferior project. When you're buying during the pre-selling phase, make sure you're dealing with a trusted seller or agent, and stick to developers with a solid history of delivering quality projects on time.
2. Pirated listings involve a party posing as the landlord or the representative of someone else's listing -- they "pirate" the listing and advertise it as their own. They insist upon the interested buyer or tenant to pay them the downpayment, the security deposit, or the broker's fee upfront. Remember that you should never pay for anything until you've done your due diligence.
3. Double sale is also quite common. In a double sale, the property is sold to two different buyers. Check whether the land title belongs to someone else by procuring the document from the Register of Deeds at the city hall or municipal office. In many cases, however, the property might've been sold to a buyer who had neglected to have the land title transfered to his or her name.
4. Withholding pertinent information about the property counts as a scam. Such information typically include less-than-ideal features of the property or the location.
5. Foreclosure scams involve selling foreclosures as regular property. The scammers, in this scenario, often target Overseas Filipino Workers (OFWs) and other out-of-town buyers who often don't have the means to inspect the property. Once purchased, they leave the new home owner with the financial and legal burdens of the foreclosure. Victims often find themselves caught unawares once the bank's representatives show up to foreclose the property.
6. Scammers also make use of faked land titles to cheat buyers and investors into purchasing what, at first, seems to be a great bargain. Typically, the scam involves using old land titles and other faked documents to make a property seem like a good investment.
Due diligence is imperative in real estate. Make sure you're working with reputable parties. Research extensively on the process of buying or investing in property and the intricacies that come with it.