Every year, People spend thousands on commercial and personal real estate property. This business had attracted scammers and fraudsters from all aspect. They try to steal from gullible and unsuspecting people. In most cases, the scammers are the people we trust the most. You never know when you will stumble on a scam.
Here are a few tips to help you recognise and avoid some common scams
Beware of undisclosed deals
Some property sellers or real estate agents my try to scam you out of your money by making deals that are not documented. Sellers may try to give you money for repairs so you can sign the closing documents. Usually, they give you less money than you need because the house probably needs more attention than you think. They are trying to spend less money on the house, by maximising their profits. The problem is, you cannot present such cases for legal actions without any proof. You will end up with spending more money than you need to.
Ensure all the real estate deals you make with the seller and real estate agents are written down on legal document for future references. Find a professional agency and work with trusted real estate agents who work within your interests and will find the best real estate deals for you.
Hidden costs and excessive loan costs
Mortgage lenders may be scammers too! Some lenders try to scam you out of your money by adding extra fees in your interest rates when you are closing a real estate deal. They impose these fees on your interest rates if you are an unsuspecting buyer. Usually, lenders work on this scam without informing any legal authorities in their business or even your real estate agent. This is more common in investment and commercial properties than in real estate properties.
First, you should know that the final interest rates on your loan are fixed during closing. You should expect a maximum of 5% of the total fee as your closing cost. Do not sign the final documents without advice from a professional. Get a real estate lawyer to help understand the terms before you agree to them
Pre- payment penalties
Some lenders will impose pre-payment penalties on your legal documents; most people won’t see the pre-payment options until it’s too late. Basically, a prepayment penalty is a payment you make when you clear your mortgage loan before the deadline. What most people do not know is that this does not apply to privately owned property.
Before you sign the documents, ensure you check up all the terms and conditions about the loan. If you are too late for this and your lender is asking for a prepayment, look up the information and contact your lawyer for legal actions.
No discount points?
Lenders who run fraudulent businesses will not let you purchase discount points for your loan. Discount points are important when it comes to repayment of a mortgage loan. They lower the amount of interest on your loan. Take legal actions for lenders who refuse to let you purchase discount points
Be careful who you trust, especially when it comes to money related issues. Even the most professional people will always try and steal from you.