Are you tired of real estate malpractices? Do you know that 60% of the existing horizontal projects nationwide are unapproved?
It is common knowledge that the real estate sector in Pakistan is replete with scams. Many individuals have lost their hard-earned savings to fraudulent schemes, which were initially presented as lucrative investment opportunities.
The recent increase in such malpractices has caused a lot of financial losses for unsuspecting investors. In many cases, these involve the sale of properties that do not exist or are not actually owned by the seller.
We have listed down the most common real estate malpractices in the country, along with tips on how to avoid them.
Common Real Estate Malpractices in Pakistan
Following are some of the most common frauds that take place in the real estate sector of Pakistan:
- Lack of Verification
- False Listings
- False Documentation
- Bait and Switch
- Unreliable Agents
1. Lack of Property Verification
One of the main reasons for the prevalence of malpractices in real estate in Pakistan is the lack of verification on the part of buyers and sellers.
There is no foolproof system to verify the credentials of the parties involved in a real estate transaction. As a result, it is relatively easy for scammers to dupe unsuspecting individuals.
The government needs to take measures to improve the real estate verification process to protect the public from fraud. Furthermore, people must be more cautious when dealing with real estate transactions. They should do their due diligence before investing their hard-earned money in any property scheme.
2. False Listings
In recent years, there has been an increase in the number of fraudulent listings in Pakistan.
There are a few things to look out for if you think you may be the victim of such a scam. Firstly, check to see if the listing is on a reputable website. If it is not, then it is likely to be fake. Secondly, see if you can find any reviews for the property or seller.
Also try to contact the person listing the property; it is likely to be a scam if they are not responsive or you cannot find any information about them. Lastly, do not make any agreements without visiting the property site and meeting the seller in person.
3. False Documentation
Fake documentation is also a widespread scam that occurs in real estate transactions. In such cases, the property listed does not belong to the seller claiming it. They cheat buyers by preparing and presenting fake documents.
Therefore, it is important to closely verify all the property documents to ensure that it is rightfully owned by the person claiming them.
Consult a qualified lawyer or legal firm to learn more about the deal’s legal implications. Never accept or sign a document that seems dubious to you; always verify it first.
4. Bait and Switch
Another common malpractice is the ‘bait and switch’, where a seller presents a tempting offer but does not actually intend to sell it. Instead, the seller provides a replacement of poor quality.
While you can find such scams in many different industries, they are prevalent in the real estate market due to the high value of properties and the lengthy process involved in buying or selling a home. This type of scam can be very costly for victims, so it is important to be aware of related signs to avoid this situation.
If you are considering buying a property in Pakistan, be sure to do your research and work with a reputable real estate advisor to avoid becoming the victim of a bait and switch scam.
5. Unreliable Agents
Finding a reliable real estate advisor is another challenge in the sector. Many unscrupulous agents are more than willing to take advantage of unsuspecting buyers.
In some cases, the advisors may even disappear with the buyer’s money without delivering on their promise of high returns. This is why it is important to exercise caution when dealing with real estate agents in Pakistan.
If you are planning to buy a property in Pakistan, do your research and only deal with reputable agents. It is also a good idea to ask for referrals from friends or family who have had experience dealing with them.
Other Issues of Real Estate Investment in Pakistan
There are also many other pain points that make investors reluctant to invest their hard-earned money in real estate.
- Uncertain economy
- Political instability
- Dollar rate fluctuation
- Lack of trust in developers
What Is Invest Right?
In order to avoid these malpractices in real estate and overcome these real estate issues, you need to make informed investment decisions in commercial and residential real estate.
You also need to thoroughly understand micro and macroeconomic theories and frameworks while using practical analysis tools. Most people make investments without any proper research, thus enduring heavy losses.
Therefore, Propsure has introduced a solution for this; it offers online property verification and inspection services for the first time in Pakistan. It also provides many other services, including feasibility studies, forensic audit, technical advisory and data as a service.
Moreover, Propsure has the biggest spatial database for Pakistan’s real estate sector, along with a state-of-the-art digital map of the entire county.
Invest Right is one such solution that provides a thorough understanding of the real estate sector in Pakistan, offering technology-driven real estate investment advice to deal with unique challenges faced by the sector.
It allows potential investors to better understand complex issues such as finance, tax laws and zoning, mortgages, insurance and banking.
With Invest Right, Propsure supports valued investors and partners to understand industry dynamics and make informed decisions regarding real estate investments and developments.
For more information, visit Propsure.