Like many things in life if it looks too good to be true it probably is. Thats true of property as it is of any other investment. At Goldmanread, our mortgage brokers pride themselves on our personalised service, the goal of which is to secure the most beneficial mortgage deals, so we want to ensure that you are aware of property scams by raising your fraud alert awareness.
Unfortunately scammers these days are very good at fooling us and creating a false image of respectability. This includes fraudulent property for sale. The pervasive nature of social media which allows even individuals to curate the image they present to the outside world is just as readily available to scammers.
We read every day about false representation and how people have been ripped off. Financial fraud has become so common it is hardly ever investigated by the authorities and seen more as a cost of doing business, no doubt encouraging the fraudsters themselves to go on offending.
Recently the Serious Fraud Office has announced it is investigating a number of companies involved in the sale and marketing of several large property developments in the North of the UK.
Unfortunately just a little due diligence by these investors would have meant that they would have saved themselves a lot of money not too mention a mountain of emotional stress.
At Goldmanread, we don’t want you to become a victim. So the best way to fight back is to make sure you take a sensible approach to making any property investment, especially as regards Off Plan purchases or Below Market Value property.
Our 3 steps to spotting property fraud
1) Always be cynical about any investment proposition
The modus operandi of the scammer is to be continuously upbeat and positive, never allowing an iota of caution to enter into their communications. Additionally if you do question the claims being made, nature of the investment you will generally be patronised or made to feel you’re doing something wrong by asking questions.
2) Do your research
Google is our greatest tool and with it you can search not just the details of the developments but the people behind them and what they have been up to in their past. Many of the people in the developments mentioned above had already been involved in failed projects, had criminal convictions or were former bankrupts.
Would you really trust your hard earned to people like that? One of the easiest searches to do is a Companies House search. If a Developer is boasting they have 20 years experience in the market and you see from their Companies House search that they were only incorporated 2 years ago this should ring alarm bells.
3) Beware of “investor lead/financed” investments
This simply means that you will be putting most of the money in upfront, and therefore taking most of this risk if things go wrong. A common feature of these investments is that investors were under the impression that their money was protected.
In fact the payment of funds upfront allowed these developers to use this money fraudulently to encourage even more people to invest.
I would say very simply put the same amount of work into investing your money as you did into earning it.