Alejandro Betancourt
- Oct 17, 2021
- 6 min read

TOP 5 MOST COMMON REAL ESTATE SCAMS IN COLOMBIA.

Fraude o Estafa Inmobiliaria (Bienes Raíces)

Those of us who professionally observe the real estate industry and the purchase and sale of Real Estate, have learned to always keep in mind the first rule of any negotiation. "If a deal sounds too good to be true, make sure it is".

As with any other industry, real estate constantly attracts a certain profile of fraudsters who seek to deceive buyers, sellers, renters, landlords and potential investors.

Fortunately, just as there are those who seek to deceive the general public, there are also those of us who seek to protect and safeguard the interests of those involved in real estate transactions from potential real estate fraud.

To that end, I want to present you the TOP 5 most common Real Estate Frauds in Colombia, how to identify them and give you some suggestions to avoid falling into a possible scam, thus protecting not only your patrimony but also your security and peace of mind.

TOP 5. INTERNATIONAL FRAUD.

It is hard to believe that it really happens, but there are those who publish a real or fictitious property for sale claiming to be the owners of it and being out of the country.

They will tell you for that for this reason, the property is not available to be visited, but they will ask potential bidders for a down payment or separation amount, attracting the investor with a proposal that is too tempting to pass up...

One way to identify them is that they usually promise to send the keys and documentation by registered mail once they receive the first payment to their accounts, disappearing with your money.

Suggestions to avoid falling into this type of fraud:

Always insist on inspecting the property by yourself or ideally accompanied by the Broker or Real Estate Agent you trust.
If you decide to hire the services of a Real Estate professional to represent you in the purchase by finding the ideal property for you, while filtering out the possible risks accompanying you throughout the legal procedure among other stages that involve a transaction, be sure to ask for the contract or mandate of representation of purchase, observing very well the commitments agreed in your favor.
Discard any possible negotiation if the owners claim that the property is not able to admit visitors because they (the owners) are out of the country.
Keep in mind to always ask for the legal contract or mandate of representation from the owners when the property is managed and shown to you through a credited brokerage firm or they have given a legal mandate to a person to formally represent them during all negotiations.

TOP 4. FINANCIAL FRAUDS.

A type of scam that cruelly chooses its victims by taking advantage of weaknesses in some people of advanced age, low income or scarce financial experience in particular.

In this type of fraud, the fraudsters will present themselves as lenders taking advantage of the most vulnerable, inviting them to sign mortgages or loans with very high interest rates. As a consequence, the victims will be unable to meet the payment of their installments, affecting their financial record or qualification, and with the passage of time, the inability to pay them in full, losing their property.

Suggestions to avoid falling into this type of fraud:

It is surprising how a large part of the public does not conscientiously inquire or find out who said "lender" is, Its trajectory, addresses and judicial processes in which it could be immersed. Therefore, always check the information they give you by cross-referencing it with references on the Internet (Google), other people who have signed with them, referrals, etc.
Take advice from a trusted person or a professional who works with a recognized firm and protects you with their consultancy from signing a bad agreement.
Always have a clear budget of what it is the amount you really have to meet the payment of a credit installment. Start by writing down your income and expenses. Set aside a clear portion to meet your credit and do not exceed that commitment.
Inform the authorities! The great majority of scams occur because those responsible or suspected of this type of practices are never reported

TOP 3. INTERNET AND ELECTRONIC SCAMS.

Following the same form of identity theft as above, someone claiming to contact you internationally will seek to inquire about the property you have advertised on the Real Estate Internet portal of your choice.

Offering you a very tempting offer in foreign currency to pass up, they will claim to need your data to cross-reference it with "entities of their nationality" and will ask for your personal and banking information, and may even make credits in your name or directly steal the money from your account.

Suggestions to avoid falling into this type of fraud:

Never provide your personal information to an unknown individual or a person who does not have the backing of a legitimate business. Always ask for all information to be sent in writing to your email and never allow your private information to be compromised.
Don't let others know your passwords.

TOP 2. REAL ESTATE TITLE FRAUD.

A type of scam that can be extremely devastating.

It is caused by identity theft whereby the fraudster pretends to be the owner of the real estate using false documentation in order to transfer the property into his or her name.

Once he has done so, he will seek to approve a new mortgage for the property, taking the money that the bank has disbursed on it, leaving the legitimate owner responsible for the debt and payments.

Tips to avoid falling for this type of fraud:

Have you ever been called out of the blue to confirm your details claiming they are calling you from a bank or have a new credit card, how about a telecom company, insurance, department store etc? Beware! Never give your personal information to an unknown person. Always ask them to send you all the information in writing to your email and never allow your private data to be compromised.
The best protection against this type of fraud is provided by a title insurance policy, issued by a legitimate and trustworthy insurance company.
If you decide, you can hire the services of a Real Estate professional to represent you in the sale of your property, accompany the title study, find the ideal clients for the negotiation, filter the possible risks (money laundering, front man, Clinton list, etc.) and accompany you throughout the legal procedure, among other stages that involve a transaction, be sure to ask for the mandate of of representation of sale, observing very well what will be the commitments agreed in your favor.

TOP 1. MONEY LAUNDERING.

Unfortunately, in Colombia the modality of Asset or Money Laundering is always present. Falling into this type of fraud means being left without property and without the money from the sale at the same.

You see, you may receive a proposal for your property that sounds very tempting: payment in advance, in foreign currency, above the market price, "avoiding formalities", etc. Once the negotiation is advanced, the buyer will deposit to your account the agreed deposit, and will even sign the promise of sale and registration of the property, concluding the negotiation and transferring the property.

What many people omit is that when they are negotiating their real estate, they should know who the potential buyer is and if this person, is part of the money laundering lists with the sole purpose of buying properties to "legitimize" the money coming from illegal activities.

In case the financial entity with whom you have your savings or checking account requests to know the source of the new income, even if you explain that it comes from the sale of your property and attach the promise of sale, they are obliged by law to confirm the legality of the money. If these are of dubious origin and originate from a person included in the money laundering lists, the bank must confiscate the resources and the property.

Suggestions to avoid falling into this type of fraud:

The best way to avoid falling into this type of fraud is to hire the professional services of a CERTIFIED real estate agent. By doing so, this agent should have be able to filter all the bidders or potential buyers of your property and work smoothly to achieve the best result in the negotiation.
If you decide to do it privately, it is your duty to filter potential buyers. Failure to do so may result in the loss of your patrimony and legal problems.
Always leave a written clause in the Promise of Purchase and Sale stating that the origin of funds offered by the buyer must be of legal compliance.

Do you know of any other type of scam that is important to point out or warn the general public about? Have you had any experience that may be useful to the community? I invite you to participate in our community in the comments below.

I hope I have provided you with useful information to successfully and safely carry out the next negotiation you make in Real Estate. If you wish, you can learn in the guides that I have designed for buyers, owners and landlords the best tips to take into account in the negotiation of your property!

How about sharing a coffee and tell you in more depth how I can advise you on the next lease of your property? Contact me via WhatsApp: +573133387060. Email: alejandrobroker.co@gmail.com or schedule your personalized advice.

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ALEJANDRO BETANCOURT.

Real Estate Broker.

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