Real estate is growing tremendously over the past few years in Pakistan. Property prices have doubled in the major cities of Pakistan. At present, buying property in Pakistan is the best investment option for investors. Investing in the real estate market is considered the ideal to get a handsome profit with a secure investment. But the property market is full of frauds/scams. However, some would try to benefit from your inexperience or innocence, so to help you how to Avoid these Common Frauds when Buying Property.
If you are planning to sell your property or looking to buy property in Pakistan it is very important to know the market value of the property, and at the same time, you must be aware of property scams and frauds that are unfortunately common.
Steps to protect yourself against fraud
These tips can also help you avoid fraudulent property agents who are always ready to pounce on innocent clients.
Here are some of the basic steps that you must follow in order against fraud and scams in dealing with property:
a. Do Not Blindly Trust the Agent
Don’t always trust blindly, Agents can be deceptive most of the time. So, make sure to inquire using different property portals like Property051.com, Zameen.com, OLX.com.pk, and Lamudi. pk. Keep in mind that most of the prices (demands) listed in these portals are 20–30% greater than the actual market price.
b. Find yourself the Market Value of the Plot/ House
Always take time and think before you invest in property. Let’s say, you found a property and you want to buy it. You need to find its market value in the first place.
You can trick the agents to find the market value of a particular property. Here is what most of the people do, who are familiar with the real estate in Pakistan.
For Instance, Call Agent A who lists the plot, and ask about its final price. Let’s say he quotes X amount for it. Call Agent B who is dealing in the same area. Ask him that you have that plot and you’re looking to sell it.
Chances are that the price he told you is different from the price you got from Agent A.
Let’s call this new price Y. Now let’s do some basic math: M = (X+Y)/2. You now have your estimated market value M.
c. Look for the Right Agent to Avoid Common Frauds
This one is tricky and doesn’t have a straight answer. You need to talk and meet multiple agents. Just pick an agent who quotes a price nearest to your estimated market value M. A tip to consider.
Don’t get impressed with their luxurious offices, educated accent, or the number of employees working under them.
1. Do not go with one
Always consult more than one agent.
d. Meet and Negotiate with the Owner in-person
Ask your agent to set up a meeting with the owner of the property. Never make a deal with an agent directly. Now you need to verify ownership of the property by cross-checking the allotment/transfer letter with the NIC of the person you’re meeting with.
Many agents will make excuses that the owner is not in town or is abroad. Just simply don’t buy those excuses and walk away from the deal if that happens.
2. Do not pay at once
There are many Real Estate Problems and Challenges in Pakistan, Once you finalize the price and payment terms between you and the owner of the property, you need to pay the owner some token money.
This ensures that you both get bound to the deal. Do ask for a receipt from the owner/agent about the token money.
Here are some of the points you should be careful about:
- Your token money should be in between rupees 50K to 1Lac.
- You must take a copy of the allotment or transfer letter.
- The token receipt must have a complete address or file number of a property.
- The token receipt must mention that the property doesn’t have any litigation or due payments.
- This token money is counted in the total price of a property.
e. Ask Your Agent to Verify the Allotment or Transfer Letter
It is part of an agent’s commission since they have given you a secure deal. However, you don’t need to pay your agent anything until this point.
If you have time and you are dealing with an agent for the first time, it’s better to go with him to the Society’s office to cross-check the status of the property you’re intending to buy.
f. Pay via Bank Pay Orders
Avoid paying in cash. It is always better and more secure to pay using pay orders. Moreover, each society has different rules for Taxation and possession of property Law in Pakistan.
This is a huge subject that needs an article of its own to fully explain it. As for what you need to pay your agent, his commission is 1% of the total price.
Avoid Fraud Online Form filling Websites.
Nowadays, everything is getting computerized, many fake marketing websites will offer you a number of fake property deals. You can only save yourself from these online robbers if you can identify them.
On online marketing websites, you are required to submit the registration form of your personal information, including your National Identity Card Number, credit/debit card number, or bank account number.
So please check and confirm that you are not providing your information to online robbers and the marketing portal is trustable.