Posted on May 8, 2023

Are you considering investing in raw land? While it can be a smart financial move, it's important to be aware of the potential risks involved, particularly real estate scams.

Unfortunately, scammers have become more sophisticated in their methods, making it challenging to distinguish between a legitimate sale and a fraudulent one.

In this blog post, we'll explore the most common real estate scams when buying raw land and provide you with tips on how to protect yourself from falling prey to them. By the end of this post, you'll have the knowledge and tools to make informed decisions about your raw land investment.

What is a Real Estate Scam?

A real estate scam is a fraudulent scheme that deceives individuals or companies looking to buy or sell real estate.

Scammers may use various tactics to convince buyers to part with their money or property, including false advertising, fake contracts, and impersonating legitimate sellers. These scams can result in significant financial losses, and it's essential to be aware of them to avoid becoming a victim.

Most Common Real Estate Scams When Buying Raw Land

When it comes to investing in raw land, there are plenty of opportunities for financial gain. However, it's crucial to understand that the real estate market is not immune to fraudulent schemes. Scammers are always looking for new ways to deceive buyers and sellers, and real estate is no exception.

Here are the most common real estate scams when buying raw land:

1. Fake Titles and Ownership Documents

One of the most common real estate scams is the sale of land with fake titles and ownership documents. Scammers may create fake documents or use stolen ones to convince buyers that they are the rightful owners of the land.

To avoid falling for this scam, always ensure that the seller has legal ownership of the land and that the title is legitimate.

2. Selling Non-Existent Land

Another common scam is selling non-existent land. Scammers may use false advertising to convince buyers that the land exists, and they have the authority to sell it.

To check the land is real, always ensure that you visit the property and verify its existence before making any payments.

3. Misrepresenting the Property

Some sellers may misrepresent the land's features to make it more appealing to buyers. For instance, they may claim that the property has access to a water source or has a particular view that is not accurate.

To ensure that what you buy is what you get, always verify the property's features and conduct due diligence before making any payments.

4. High-Pressure Sales Tactics

Scammers may use high-pressure sales tactics to force buyers into making quick decisions without conducting proper due diligence. They may create a sense of urgency, claiming that the property is in high demand, or that the price will increase soon.

To protect yourself from falling victim to this scam, always take your time to conduct due diligence and research before making any decisions.

How to Verify Your Real Estate Seller

Now that you know the most common real estate scams, it's time to learn how to verify your real estate seller to avoid falling for them.

Here are some ways to verify your real estate seller:

Look up the Company with the State Where the Company is Registered

One way to verify your real estate seller is to look up the company with the state where the company is registered. You can do this by contacting the state's business registration office or by visiting their website. This will give you information about the company's registration status, location, and other important details.

Check Out Their Website

Another way to verify your real estate seller is to check out their website. Look for their contact information, such as their address and phone number, and verify that it's legitimate. You can also look for their company history, reviews, and ratings to get an idea of their reputation.

Look at Their Google My Business Page

You can also look at their Google My Business page to check for reviews from previous customers. This will give you an idea of their reputation and whether or not they have a history of scams. Look for any negative reviews or complaints, and see how the seller responded to them.

Ask for References

Finally, you can ask the seller for references from previous customers. Contact these references and ask them about their experience with the seller. This will give you first-hand information about the seller's reputation and whether or not they can be trusted.

Related: 13 Key Actions to Ensure a Successful Investment in Undeveloped Land 

How to Verify a Real Estate Contract

Before signing any real estate contract, it's essential to ensure that the document is legitimate and in your best interests. A real estate contract is a legally binding agreement that outlines the terms of the sale, including price, payment terms, and other essential details.

Here are some important factors to consider when verifying a real estate contract:

• Terms and Conditions: Read the contract carefully and understand all the terms and conditions. Seek legal advice if you have any doubts or questions to ensure that you're fully aware of the contract's implications.
• Seller's Identity: Verify the seller's identity and legal ownership of the property. Check the property's title deeds or land registry documents to confirm the ownership and legal status of the land.
• Liens and Encumbrances: Check for any liens or encumbrances that could affect your ownership rights or restrict your use of the property. Ensure that there are no outstanding liens or encumbrances on the property before signing the contract.
• Independent Appraisal: Get an independent appraisal from a qualified and reputable appraiser to obtain an accurate valuation of the property and ensure that you're paying a fair price for the land.
• Property Inspection: Inspect the property to ensure that it meets your requirements and that there are no hidden defects. Hire a professional inspector to conduct a thorough inspection of the property.
• Payment Terms: Understand the payment terms outlined in the contract and ensure that they are reasonable and feasible. Be cautious of contracts that require a large upfront payment or have unusual payment terms.

By taking these steps to verify a real estate contract, you can protect yourself from fraudulent activity and ensure that your investment in raw land is secure. Remember to conduct due diligence and research into the property and seller before making any decisions.

Related: An Introduction to Deeds: The Three Types to Know When Buying Raw Land 

Conclusion

As you can see, real estate scams are a real threat when it comes to buying raw land. Scammers can use various tactics to deceive buyers and part them from their hard-earned money. However, by being aware of the most common scams and taking steps to verify your real estate seller, you can protect yourself from falling for these scams.

At MJ Land Sales, we are committed to providing our customers with honest and reliable estate agent services and land investment opportunities. If you're interested in buying raw lan, feel free to reach out to us at [email protected]. We'd be happy to help you make good decisions about your investments.