The feel of buying your first home is always amazing and exciting. With years of savings and hardwork, we are capable of buying our first home but the biggest problem these days is the rise of property fraud.
Last year over 10000 cases worth more than Rs.15000cr. were reported, so buyers must be careful when buying their first property. Most of the fraud that scammers do is during documents verification or when ownership details are not clear.
So, understanding how to avoid property fraud for first buyers is key to prevent any financial loss or debt for the pocket. Our intent for this article is to help new buyers avoid any problems when buying their dream home.
Understanding the Local Market
Before you start visiting properties in your area, you need to first take some time to understand the real estate landscape. Each place has its own prices and demands which vary on the location and legal nuances.
So, for example, if we see the well-established sectors like 20, 33, or 44 in Chandigarh, then those areas have very clear ownership records. You usually won’t hear any property theft related cases from there.
But on the other hand, if you see areas around Zirakpur or New Chandigarh, then these are still developing which makes it tough to actually believe due to diligence.
Knowing the average property rates and market behaviour helps you get a deal which would be “too good to be true”.
Common Types of Property Fraud
Property fraud can happen in various ways and it’s important to know all the common property fraud. So, here are some common frauds that target homebuyers, sellers and tenants.
Fake Ownership Fraud
One of the most common and serious types of fraud is fake ownership. Here, a person will pretend to be the legal owner of the property and then using forged or manipulated documents they try to sell it.
Some red flags to notice:
- The seller deny to show the originals documents
- Trying to close the deal as soon as possible
- Name not matching in the paperworks.
Double Selling
Lately, these types of scams are trending in the news where a seller sells the same properties to multiple buyers. In this scam, the sellers take advance payment from each buyer and disappear.
Some red flags to notice:
- Delaying the registration
- Simultaneously showing property to multiple buyers
- Seller forcing for quick token money
Title Fraud
Knowing everything about the past of the property is an important part of the home hunt. In India, there are a lot of property disputes personally and professionally.
In this fraud, the property you are visiting might have ongoing legal disputes, unpaid loans or unclear ownership history.
Some red flags to notice:
- Incomplete ownership chain
- Existing tenants or disputes
- Property under litigation
Loan Fraud on Property
Sometimes, a property already has a loan, and instead of paying it off. The seller tries to hide this fact from the buyers, this way they take full money from the buyers and after when the property is named after the buyers, the mortgage will be shifted on him.
Some red flags:
- Seller avoids discussing loans
- Missing NOC from the bank
- Delays in document sharing
Advance Payment Scam
This hit and run scam is one happening a lot lately where the fraudsters collect the booking amount for the property and disappear. They mostly try to get the amount via cash so it’s better to prefer bank transfer.
Some red flags:
- Only agreeing to cash payments
- Seller is not contactable after payment
- No written agreement
Documents to Check Before Buying Property
Checking documents carefully and cross checking it with your lawyer can help buyers avoid property frauds for first buyers. Each document has a different role to confirm the property is valid and doesn’t have any issues with it.
- Title Deed: Title deed document proves the legal owner of the property and confirms that the person has the right to sell it. If the title of the document is unclear or seems clear, it could be a property that belongs to someone else.
- Sale Agreement: A sale agreement is a document between the buyer and seller which outlines the terms of the property including price, payment, possessions date and conditions.
- Encumbrance Certificate (EC): The EC shows if the property has any financial liability, such as loans, mortgages, or disputes.
A property with unpaid loans can become your headache after purchase. So, it’s better to confirm that the property is free from debt.
- RERA Registration: RERA stands for Real Estate Regulatory Authority that ensures the builder and project are approved by the government. It protects the buyers from fake projects and ensures transparency.
- Local Authority Approvals: LAA is an important document since the permissions come from development authorities and the property is built legally according to approved plans.
How to Avoid Property Fraud For First Buyers?
Getting a property can be easily avoided if you investigate and research everything clearly. A small step can protect the buyers from losing their valuable time and money.
So, here is the complete way to buy the property for your dream home because everyone deserves a place that they can call home.
Property Verification Steps
Verifying every document is the first step to avoid property fraud and it starts with a clear communication with the seller. Ask all the important documents from the seller and if he refuses to provide any documents, then don’t continue the deal anymore.
But if the seller agree, then here are someone verification steps you need to follow:
- Title deed check
- Encumbrance certification
- Khata/mutation certificate
- Tax receipts
- RERA registration
- Sales agreement.
Legal Due Diligence
Hiring a property lawyer to check and verify all the documents is important as they ensure all the paperwork complies with the laws. Always make sure that you conduct a physical site inspection to avoid legal problems later.
Search the past history of the property to ensure that the seller is not involved in any cases and also verify their identity. Cross-check the seller’s ID, PAN and address to confirm the authenticity.
Financial Safety Measures
Money is earned with hard work and nobody wants to lose a part of it. So, it’s better if we follow some safety measures before the mishap happens. Here are some measures:
- Use bank payments
- Verify home loan eligibility
- Avoid cash payment directly
- Take payment receipts after the transaction.
How Bohr’s Estate Helps To Build Your Dream?
At Bohr’s Estate, we believe buying a property is a foundation of your dream and anyone who is looking for a residential or commercial property gets what they desire. We start with understanding your needs and budget to ensure you match you with the right property.
With 11 years of experience in real estate for Chandigarh, Mohali, and New Chandigarh. We help you identify locations with strong growth potential and lasting value. From site visits to final registration, our complete support ensures a seamless, transparent, and hassle-free experience, so you can invest with total confidence.
