Real estate fraud is a pervasive and damaging criminal activity that threatens the financial well-being of individuals and compromises the integrity of the real estate market.
The menace involves various deceptive practices, such as identity theft, mortgage fraud, property flipping schemes and unrealistic returns on investment. This article aims to shed light on the dangers posed by real estate fraud and emphasize the need for increased education, awareness, stricter regulations, and proactive measures to combat this growing menace.
A close look at the impact of real estate fraud on the economy and individuals
Real estate fraud has wreaked havoc on the lives of unsuspecting individuals both in Nigeria and diaspora; especially to Nigerians in the diaspora. Homebuyers have fallen victim to fraudulent schemes, leading to financial ruin and emotional distress.
The perpetrators of these fraudulent schemes often lure them with attractive offers, false promises, and misleading information, only to disappear or change goal post once the money changes hands. The consequences of such fraud can be devastating, leaving victims with substantial financial losses and potentially even without a place to live or legacy to pass on.
This condemnable act sadly not only harms individuals but also has wider economic repercussions. It undermines confidence in the real estate market, making it difficult for genuine investors and homebuyers to operate with peace of mind.
As trust crumbles, the overall stability of the market is jeopardized. In addition, when fraudulent transactions occur, they can lead to inflated property prices, distorting the market and making it inaccessible to honest participants.
Understanding the perpetrators and their tactics:
Real estate fraud is perpetrated by cunning individuals or organized groups who exploit the desperation and ignorance of unsuspecting victims. These fraudsters may impersonate real estate agents, brokers, or even property owners themselves.
They use sophisticated techniques, including falsifying documents, forging stamps/signatures, manipulating financial record, show off flashy media optics on social media platforms to deceive potential buyers.
It is crucial to remain vigilant and verify the authenticity of all parties involved in a real estate transaction. Buyers and investors must also beyond carrying out verifications online or through a relatives, ensure that they acquire enough and authentic knowledge from credible and experienced professionals in the real estate spectrum.
The loopholes explored
These perpetrators have thrived and succeeded in their fraudulent acts as a result of so many factors, some of which includes;
Ignorance and Desperation of Buyers/ Investors
This factor has been a common denominator for all victims of this evil menace. People have been lured into offers “too good to be true” they fall for such offers because they are often told not to “let the opportunity pass by” or they get scared that the price will be reviewed and will want to take advantage of Pre-lauch prices.
Little to no real estate education
It is alarming to see how people are willing to throw millions of dollars into purchasing properties and investing in assets without first investing in getting insights and education about the venture they are getting into. Any transaction that is gone into blindly; without proper and adequate coaching will take a downward spiral and loss is inevitable
Real estate fraud persists due to the lack of enforceable regulations and inadequate oversight. Regulatory bodies must take a proactive approach to combat this issue by implementing robust screening procedures, conducting thorough background checks, and ensuring the enforcement of existing laws.
Curbing the menace
The number of people that have fallen victim is still very little compared to the number of potential victims, we must therefore with all urgency take strategic and proactive moves by;
Raising awareness through real estate education
Enlightenment and awareness play a vital role in preventing real estate fraud. The public needs to be informed about common fraudulent practices, warning signs, and preventive measures.
That is why I insist that all potential real estate investors should invest first in getting real estate education before putting their money into any deal. These educational programs can be disseminated and accesed through various channels, including social media, workshops, webinars, stakeholders convention and community events.
Strengthening due diligence
Buyers and investors must exercise thorough due diligence throughout the real estate transaction process. This includes verifying the credentials of real estate agents, conducting thorough inspections, reviewing legal documents with the assistance of legal professionals, and seeking independent appraisals from credible individuals.
Additionally, they can adapt an added layer of security by ensuring that funds are held in a neutral account until all contractual obligations are fulfilled.
Being in the Real estate sector for over 16 years, I can say for a fact that real estate fraud poses a significant threat to individuals, the economy, and the integrity of the real estate market.
Combating this issue requires a comprehensive and holistic approach involving stricter regulations, increased awareness, and proactive measures from both regulatory bodies and individuals involved in real estate transactions.
By working together, we can protect consumers, safeguard investments, and ensure a transparent and trustworthy real estate sector for all.
Ofure is the MD/CEO of LifeCard International Investment Limited