Real estate scams are a very serious problem right now in Nigeria, and although a lot is done by professionals to prevent these kinds of frauds, many people still fall victim to the scams. It doesn’t matter how much you know about real estate – an experience scammer can trick you into giving him money or your own property.
As you know, buying your own property is a very responsible step. If you want to find your perfect house or apartment in Lagos, Abuja, Rivers, or any other Nigerian city, and don’t want to fall victim to a real estate fraud – look out for these 5 red flags!
1. Everything is happening too quickly
With a job as serious as buying a piece of property, you should not be in a rush, but more importantly, you should not let your real estate agent hurry you up. If the agent says you must act as quickly as possible, otherwise the property might go away – it might be an ordinary real estate scam.
An experienced, yet honest real estate agent will never rush you to make such serious decisions. If he has nothing to hide and doesn’t want to dupe you, he has no reasons for hurry, and so do you – take your time, consult with other real estate specialists, if you want, and make sure to pay attention to every part of the deal, from viewing the property for the first time to signing the final documents.
2. Your “real estate agent” is out of the country
As the internet is becoming more and more integrated into our everyday lives, Nigerian buyers are getting used to online shopping. Local websites are filled with real estate ads in every part of the country. A lot of buyers spot an ad they really like, contact the “seller”, and try to arrange a meeting with them. However, the seller says he’s out of the town or even out of the country, and says his co-worker will show the property to the buyer.
Buyers meet with the seller’s co-worker, see the property and are very impressed and eager to purchase the property. It turns out that the co-worker doesn’t have the authority to sign the deal, so the seller contacts the buyer and tells them the property is theirs, all they have to do is wire the money to the seller and he’ll give them the keys. As you can guess, after the “seller” gets the money, buyers never hear from him again.
3. The agent tells you not to contact anyone else
Since buying real estate is a step that requires a lot of thinking, it’s a common practice for buyers to consult one or two real estate specialists before committing to their property of choice and actually paying money. This is why, if your real estate agent urges you to do business only with them and not consult any other real estate agents, you should view it as a red flag.
A non-fraudulent real estate agent will happily welcome a consultation or advice from other agents, but if the agent wants to scam you, he will be extremely against you talking to any other specialist. We advise you to tell your real estate agent you want to get another agent’s opinion, and watch his reaction: it can tell a lot about his intentions.
4. You are asked to pay the agent’s fee beforehand
Most real estate agents don’t have a fixed salary and work on commission, meaning they make money with every successful real estate deal they organize. It’s understandable if your real estate agent wants to negotiate his fee before the paperwork is signed. Typically real estate agents in Nigeria ask for a 5% fee from the full amount of money you pay for the property, but the number can be higher or lower depending on the type of real estate, its location, and several other factors.
However, if your agents not only wants to discuss the amount of money he’ll be paid, but also asks you to pay him them the money beforehand, consider it a warning sign – there is a chance your real estate agent will simply vanish the minute they get the money, which means you’ll lose both a valuable sum of money and your chance to buy the property you like.
5. Lack of paperwork
We’ve already established that buying a house or apartment is a very serious step, much more serious than buying new furniture or a new mobile phone, and even more serious than purchasing a car. This is why there should be a lot of paperwork that the seller, the real estate agent, and the buyer should sign.
If your real estate agent asks you to complete the deal, but there are a only a couple documents for you to sign, it might be a sign of a real estate scam. If the documents look suspicious, or there are too little documents to be signed, don’t sign the paperwork right away – take some time to consider everything and, preferably, consult your lawyer or another real estate agent.