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Owning a home is the ultimate dream of many Filipinos. Some even leave behind their families and work abroad so that they can purchase a home for their loved ones. According to the 2013 data from the Philippine Overseas Employment Administration (POEA), over 2.2 million Overseas Filipino Workers (OFWs) are working abroad.

To protect your future home and to ensure you won’t fall prey to any real estate scams, below are common housing frauds that you should watch out for:

1. Pre-Selling Scam

One of the most widespread real estate scams in the country is the pre-selling scam. These are done by shady developers who do not follow the rules on requisite permits or gain through dishonest means. According to this Inquirer news report, Housing and Land Regulatory Board estimated in 2009 that almost 85 of the cases filed in their office account for dissatisfied customers asking for a refund of their down payments in pre-selling projects.

During the pre-selling stage, the developer would lure prospective buyers with very low rates and great incentives including timely turnover dates. Buyers will then get a property from them and pay the downpayment as well as monthly equity. But as the expected turnover day nears, the development is still not done. The developer will promise that it will be finished on a certain timeframe, but they will extend it time and again until the home buyer gives up on it.

Early this year, Second District of Tarlac Rep. Susan Yap filed the House Bill 395, which will amend the Presidential Decree 975 or the Subdivision and Condominium Buyers’ Protective Decree of 1976 to increase penalties against dishonest property developers.

2. Double Sale of Property

Under this scam, the property in question is bought by two different people. This happens when the first buyer fails to register and transfer the title to their name, and then the crooked owner will sell it again. Thus, both buyers have the same title under their own names.

This is one of the most controversial housing scams in the Philippines in 2010, and up until now the investigation is still ongoing. According to complaints filed to the National Bureau of Investigation (NBI), the developer Globe Asiatique allegedly double sold properties. The victims reported that the titles they have carry another name. Furthermore, the houses were built on a land that was not theirs.

3. Bait-and-Switch Scheme

This deceptive practice involves real estate agents advertising properties that they are not authorized to sell. These properties are either not really for sale or are handled by a different agent. The property is listed at an attractively low price to get people’s attention (the bait), but once a client inquires, the agent will claim that either the house has already been sold or is not available anymore. Agents will then offer their own listings that may even be pricier than their previous offer (the switch).

4. Insufficient Disclosure

This scam happens when less-than-reputable real estate developers, real estate agents, or even home sellers intentionally withhold information about the property that may make potential clients think twice before buying.

It’s common to come across properties which show a lot of promise, but when it’s time to sign the contract or turnover, you’d find surprising facts or information about the property. These include hidden charges, title complications including tax delinquencies or encumbrances, or less-than-ideal structural facts such as poor property foundation.

5. Real Estate Agent Posers

A con artist pretending to be a real estate agent is another common scam committed in the Philippines. These fake agents are responsible for most real estate frauds in the country. Some would create legitimate-looking web sites and put up listings they’ve copied online. And once they’ve tricked you into paying a security deposit or initial payment, they’ll leave you high and dry. Because they use forged documents and contact information, running after them is more difficult.

6. Property Title Fraud

A type of scam that is costly and devastating is the property title fraud This is done by syndicates or fake agents with their cohorts to convince you to buy seemingly affordable properties. These scammers would use old titles and copy the information to create a fake title. They would also add supporting documents to make it seem like all the papers are in order.

This is a scam that not only targets home buyers, but also real estate developers and banks. Last August 2014, Senator Koko Pimentel III filed Senate Resolution No. 856. It seeks to investigate the fake land title scam that is now prevalent in many parts of the country, particularly in General Santos City. But you should be able to detect the authenticity of the titles using these guidelines from the Land Registration Authority (LRA).

7. Pirated Listing

Scrupulous real estate agents take advantage of others by copying original listings. These are often found in online classified ads, which cannot be personally verified by site administrators. Or the agents sometimes pose as potential buyers and gather all pertinent information about the property.

Once they have the details and have even taken photographs, they would claim that they are the homeowners’ representative. But after the buyer pays for fees and initial payment, the agents will suddenly be unavailable or will come up with excuses when contacted.

8. Fake House Rentals

There are two ways this scam is executed: using a house that is vacant because the owners are abroad or one that is really up for sale. The scammer will scout a property which has been sitting empty for a period of time – either the owners are not based in the country or away on a trip. The property will then be offered to an unsuspecting client. They will either say they are the owners or are the authorized representatives of the owners.

These scammers would break into the homes and then change the locks so that they can show it to clients. After producing official looking contracts and other documents, these fake agents or representatives will ask the unsuspecting renter for the security deposit as well as advance payment.

9. Foreclosure Scams

Scammers take advantage of properties up for foreclosure by offering it to unsuspecting clients – particularly OFWs – who are not able to check the properties personally. The scammer would either pose as the real home owner or an agent. They will then forge official-looking documents to present to the potential buyer.

When it’s time for the buyers to move in, they cannot contact the agent anymore. Or in worst cases, the homeowners have already moved in, but when the bank comes to foreclose the property, it will only be the home owners who are left to deal with them.

The takeaway

In order to protect your future home, you should always perform due diligence. Research is a very important part of the home buying process. You shouldn’t just rely on the real estate agent you’ve hired. Do know who you are dealing with and conduct a thorough background investigation. Find out how credible they are and if the property they are selling is really legitimate.

Hotlines to remember

If you know someone who’s part of any irregular practices or you’ve encountered real estate scams, report these to authorities immediately. You may use these numbers of the right Philippine government agencies to contact.

For dishonest licensed real estate agent professionals, you may contact the Legal Department of Professional Regulatory Commission at (632) 735-1248.

For fake agents, con artists, or shady developers, the National Bureau of Investigation’s Anti-Fraud and Action Division is the agency to contact. You may reach them at (632) 525-4093 or 524-6395.

Watch this video on how you can avoid falling prey to real estate scams.

What other real estate scams in the Philippines do you know or have encountered? Share with us your thoughts and experience by leaving a comment below.

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