Property scams are on the rise in Australia and the perpetrators are constantly finding new ways to get around laws and avoid being brought to justice.
In the current climate of economic uncertainty, you might be looking for anything to give you a jump start towards eventual financial security. Scammers know this and, being very well practiced at manipulating people, will play on your emotions to coerce you into parting with your savings.
Awareness and prevention are the best weapons against scammers, so it is important to know what you are up against.
Scam 1: Shady American properties
These scams usually involve properties being bought from desperate sellers in the US at deflated prices, then on-sold to foreign investors at much higher prices.
The US scammers use Australian property marketers to source potential investors. You might be told you can pick up a house for $50,000, but what you are not told is that the house is on a street where all the other houses have been abandoned. The house can actually be worth less than $10,000 and have no avenue to improve in value. You are then left with a useless property on the other side of the world and no one to help you deal with it.
Property consumer researcher Steve Butcher says you should be suspicious if you are offered a chance to buy overseas.
“If you’re not prepared to go over and source your own properties and property managers, you run the huge risk of discovering that when things go wrong, you are a long way away,” he says.
“People end up paying for numerous overseas trips to sort problems out. Sometimes they have bought into areas that are slums and will be for a long time, but when they saw the photos of the property, it was photo-shopped and looked really nice.”
Butcher says it is a mistake to put faith in the research and follow-up services that property marketers promise.
“They are just after commissions and don’t care what happens to you after they’ve sold the property. As soon as things go wrong they ignore you and won’t return calls or emails,” he says.
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