The world of real estate can be quite complicated, and the unfortunate truth is, there are various types of disputes and property fraud taking place, which doesn’t exactly open the door to smooth real estate transactions. Whether you’re a tenant, landlord, buyer, or seller, there are a few things you can do to minimize the risk of fraud and increase your chances at a smooth real estate transaction.
The key to it is to stay vigilant, so here are some important pointers that you need to keep in mind when venturing on any real estate investment.
Talk to a Real Estate Attorney
Whether your case involves residential or commercial real estate, your best bet to ensure a smooth deal is to consult with your lawyer and have them review your contract to make sure that the agreement is legal. Most people only turn to legal consultancy as a line of defense when disputes arise. However, when you’re in the real estate market, there’s usually a lot of money involved, which is why it’s important to have all the legal information needed from the beginning if you’re buying, selling, or leasing property.
The legal issues you may face in the real estate world are diverse, this where real estate attorneys come on. The key to arming yourself against any possible legal ramifications and financial losses is to know what questions to ask your lawyer. One of the common questions is, “Do I need to seek legal advice before signing a lease agreement?” The short answer to this is yes.
While many people simply sign lease agreements right away, it’s important to remember that a lease is a legally binding contract which means that by signing it, you’ll be agreeing to provisions that may be unfair and may later result in significant legal liability and restrictions that you’ll have to bear. This is why it’s crucial to talk to a real estate attorney and have them review your lease before committing to any legally binding agreements.
When it comes to legal advice or consultancy, make sure you hire a trusted lawyer that has your best interests in mind. A reliable attorney will highlight which provisions may favor you, which terms you need to negotiate out of the agreement, and which ones you absolutely have to put in. All this will help you make a well-informed decision and ensure that you get the best deal possible. On the other hand, if the other partner involved in the transaction insists on using a specific lawyer, this can be a major red flag.
Hire Your Own Licensed Real Estate Broker
In light of the increased fraud and the clever scammers being them, both sellers and buyers are strongly advised to use only licensed and reputable brokers who can efficiently act in their best interests. When hiring a real estate agent, it’s best to choose one that’s affiliated to a registered brand. Don’t hesitate to ask questions about their credentials, affiliations, VAT numbers, and tax registrations.
Legitimate agents will willingly share this information with you, so you should never be afraid to double-check everything that’s important to the transaction. This way, you’ll weed out any potential scammers.
Verify the Property Rights
It goes without saying that when renting or buying a property, you should always know exactly who owns the property and do a little investigative work to see if any red flags come up so that you can be rest assured that the individual or entity you’re dealing with is credible and trust-worthy. The legal rights that a property owner holds are another crucial aspect that you need to understand before tapping into the real estate world. A person who has a property in their name can inherently maintain a legal right to control all of its various characteristics, even when the estate is sold, gifted, or leased. For instance, if you’re living in a rental apartment, then you’re technically borrowing the property owner’s right of possession, only for the period that the lease covers.
The concept of property rights plays an especially important role in trespassing issues and easement access. The idea behind easement is based on a non-possessory right to use someone else’s property. Say, for example, that you’ve just purchased a new home, but your neighbor drives over a portion of your property to reach their home every day. Now, typically this would be a trespassing issue, but if your neighbor has express easement, this allows him to drive over your property without any legal ramifications. As you can see, understanding the system behind property rights is key to understanding your ownership rights when it comes to protecting the parameters of your property.
Ensure That The Contract Is Complete
Even after revising the contract with a lawyer, property buyers and sellers should also double-check that a contract is comprehensive and that all critical information is included, from all the verified details of the buyer and the seller to the address of the property. An incomplete or blank offer is a big no-no. Blank documents are some of the most prominent tools of extortion used by frauds.
Another thing to watch out for is cash deals. Cash deals, regardless of how enticing they can be, may pose great risks of fraud, especially if you’re a seller or a landlord.
An unsuspecting seller may think that a cash deal is secure, but what most sellers don’t anticipate is that sometimes the buyer refuses to part with the cash until after the property is effectively transferred to their name. This puts the seller in an unenvious position where they risk not being paid at all, even after passing the ownership to the buyer. It’s better to be safe than sorry. This is why you, as a seller, should always insist on a deposit prior to occupation.
It’s clear that fraud can happen within any real estate deal, and with the rising levels of property transactions, the risks are now higher. That’s why it’s important to keep a watchful eye over all the legal and financial transactions by employing a good set of internal controls accompanied by the appropriate professional oversight. With the previous tips in mind, you can protect your interests, minimize the risk of fraud, and ensure a smooth real estate deal.