Real estate fraud techniques and countermeasures | 7 items to check before signing a contract

The most important thing to prevent real estate fraud is to not rush to send money and sign a contract even if the terms are attractive, and to check the recipient, the property, and the flow of money separately. In high-value real estate transactions, it is necessary to check not only whether the property actually exists, but also whether the seller is truly capable of disposing of the property, whether the brokerage company is an appropriate business, and whether there is a basis for paying a deposit.

When faced with cheapness or rarity, you may be forced to make a hasty decision. In this article, we will introduce 7 things you should stop and check before signing a contract, sorting out the ways in which people impersonate landowners, transactions that force deposits to be paid quickly, decoy advertisements, and situations where double transfer is suspected.

Key points of this article

Countermeasures against real estate fraud begin by not confirming the property, seller, real estate agent, and payment address based solely on one person's explanation.
Preservation of earnest money, etc. is a system for transactions in which the real estate agent acts as the seller, so it is necessary to check the scope and exceptions before signing the contract.
Bait advertisements are subject to false representation, and being unable to view the property, being directed to another property, or sudden changes in conditions are signs that you should leave a record and stop.
When in doubt, stop the remittance, save the advertisement screen, contract draft, and contact history, and consult with a specialist or consultation center as soon as possible.

The first scene to stop when dealing with real estate fraud

When you are told, ``If you put down the deposit today, you can secure the loan'', that's when you should stop the process. Real estate has a large price tag and involves multiple parties such as the seller, brokerage company, judicial scrivener, and financial institution, so it is important not to accept just one company's explanation of the reason for the rush.

What you should be wary of is not the terms themselves that are significantly more advantageous than the market price. The situation is a combination of multiple discomforts: the viewing date and time is repeatedly postponed, interviews with the seller and identity verification are avoided, the recipient of the transfer is unnatural as a contracting party or depositary, and a draft contract is not provided in advance.

For example, even though the advertisement states that the item is sold directly by the seller, the remittance is sent to the person in charge, and even if you ask them why, they may not give you a written answer. Rather than paying at this point, check your contract and settlement documents to determine who has what authority to receive the payment.

Article explaining the process of purchasing an apartment from a practical perspective may also be helpful for checking the entire purchase order. Rather than trying to detect the presence or absence of fraud all at once, it is more realistic to separate the checks into steps that cannot be skipped.

What are the techniques used in real estate fraud?

When it comes to tricks that can cause problems in real estate transactions, it is more important to see which confirmations they are trying to omit than to memorize their names. Rather than conclude that each case is a scam, here we will summarize the typical warning signs that should be used to stop a contract and seek proof.

Scenes where impersonators and masquerades are suspected

Landlords are known for impersonating owners or agents to make it appear that they can dispose of real estate. The name listed in the registration information and the identity of the person in front of you are separate confirmations.

If the seller is an individual, check to see if there are any discrepancies in the information on the identification documents, registration information, address connections, reason for sale, keys, and local description. If the seller is a corporation, the registration information of the corporation, the authority of the representative/person in charge, and the basis for internal approvals and delegation will be subject to confirmation. For high-value transactions, share the settlement system with a judicial scrivener at an early stage and see if the seller is willing to undergo reasonable confirmation.

You can request a registration certificate and map/drawing certificate using the Ministry of Justice's procedure guide. Registration information is an important starting point, but it alone does not guarantee the identity of the seller or the right of representation. It is safe to check the Ministry of Justice's real estate registration procedures and decide on the necessary materials with an expert for each transaction.

Techniques to rush the deposit

There are situations where they rush you and try to move money without providing you with sufficient documents, saying, We have other applications,'' orIf you transfer the money now, you can maintain the terms.'' It is not okay to send a deposit without checking the details of the contract, the recipient, whether it is protected, and how it will be handled in the event of cancellation.

In sales where the real estate agent is the seller, security measures such as deposits are required in certain cases. On the other hand, there are exceptions to transaction types and amounts, so do not assume that the security measures are protected, but rather confirm in writing the details of the security measures and the reasons why they are not covered before signing the contract.

Scenes where decoy advertisements and double transfers are suspected

The Consumer Affairs Agency considers the display of properties that do not exist, properties that cannot actually be traded, such as properties that have already been sold, and properties with no intention of trading, as false representations related to real estate bait advertising. If after making an inquiry, you are refused a viewing without a reasonable explanation and are only recommended other properties, make sure to keep the advertisement screen and contact history. Real Estate Advertising Laws and Regulations Guide is also a helpful guide when viewing advertisements.

In transactions where there is a concern about double transfer, check to see if the steps from the contract date to settlement and registration are unclear and only the payment is required first. Under the Civil Code, registration is required in order to defend changes in real estate rights against third parties. That is why it is important to specify the settlement date, required documents, and who will be responsible for the registration application before signing the contract, and to not separate payment and procedures. Based on the e-Gov Civil Law, please consult a judicial scrivener or lawyer for individual legal decisions.

7 things to do before signing a contract to prevent real estate fraud

Real estate fraud prevention is not a task to maintain suspicion of the other party. The task is to create a situation where everyone involved in the transaction can view and explain the same materials. The following table is a minimum confirmation sheet that can be used by both buyers and sellers.

Items to check	Materials and places to check	Signs to stop
1. Existence of a real estate contractor	Check the business name, address, and license number using the Ministry of Land, Infrastructure, Transport and Tourism's corporate information search	Name, address, and license number do not match in the advertisement or contract
2. Check the disposition history	Ministry of Land, Infrastructure, Transport and Tourism's negative information search site	There is information on work suspensions, license revocations, etc. without explanation
3. Properties and rights	Certificate of registration, map/site, draft explanation of important matters	Inconsistent descriptions of location, lot number, area, mortgage, etc.
4. Authority of the seller/agent	Identity verification, corporate information, power of attorney, interview	Avoid confirming with the seller or giving authority materials unnaturally
5. Advertisement content	Posting screen, viewing record, history of changes to conditions	Guided to another property without being able to view the property
6. Earnest money and security	Draft contract, security measures document, cancellation clause	Rushing remittance without explaining the basis for acceptance or refund conditions
7. Flow of transfer/settlement	Transfer destination, receipt, payment guide, involvement of judicial scrivener	Personal account, last-minute account change, instructions without written document

You can check the license and basic information of real estate contractors on Ministry of Land, Infrastructure, Transport and Tourism's corporate information search system. Administrative penalty information can be found on the Ministry's Negative Information Search Site, but there are limits to what can be disclosed and to which areas. Don't assume it's safe just because there are no search results; combine materials and interviews.

The same goes for the seller. Even if a buyer or broker says they want to sign a contract right away, not making vague the brokerage contract, the buyer's financial plan, settlement date, and delivery conditions will reduce problems later. Please check Procedures and points for selling real estate and compare not only the price but also the explanation power of the entire transaction.

What should I check before paying the deposit?

Before paying a deposit, first check who you are paying and on what basis, before considering the size of the amount. The draft sales contract, explanation of important matters, nature of earnest money, handling at the time of cancellation, existence of security measures, transfer destination, and issuer of receipt must be connected as one transaction.

The Ministry of Land, Infrastructure, Transport and Tourism has introduced a system in which a real estate agent will take security measures before receiving certain deposits, etc. for sales in which the real estate agent is the seller. Treatment differs depending on whether the property is completed or unfinished, the amount, etc., so if the property cannot be preserved, do not leave it up to the person in charge to find out why it is not eligible, but rather check in writing. Ministry of Land, Infrastructure, Transport and Tourism's Guidance on Preservation of Earnest Money, etc. is the place to check.

What is easy to overlook here is to think of brokered transactions and transactions with individual sellers in the same way as those with real estate agent sellers. Just because it's not covered by the system doesn't mean it's immediately dangerous. However, that is why it is necessary to individually confirm the management of deposits, transfer destination, cancellation conditions, and division of roles up to settlement before signing a contract.

Even if you receive an explanation that it's only for today, please make sure to set aside time to read the materials and consult with experts. A deal that sacrifices transparency in exchange for a quick deal is not rational in the long term.

What should you do if you suspect decoy advertising/double transfer?

If you feel that something is wrong, first stop additional payments and signatures, and record the facts in chronological order. Before categorically criticizing the other person on social media, it is better to prioritize recording and consulting to prevent further damage, which will also be helpful in explaining later.

What is saved is the URL and screen of the advertisement, the date and time of publication, the address and lot number of the property, emails and chats, draft contracts, explanations of important matters, information on transfer destinations, remittance records, and the names and dates and times of people interviewed. In addition to screenshots, if possible, save the email as a PDF or save the original text of the email.

The person you contact varies depending on the situation. For consumer troubles related to advertising or transaction terms, you can use the Consumer Hotline 188. If you are worried about being a victim of crime or have an emergency, call the police consultation line #9110 or 110. For individual legal responses such as canceling a contract or requesting a refund, you can consult a lawyer or judicial scrivener. Even after remittance, please share the details with the relevant parties at an early stage, including contacting the receiving financial institution.

The key to preventing real estate fraud is to have a system that does not rush.

Countermeasures against real estate fraud are not just a matter of knowing who the fraudster is. This involves verifying the real estate agent's license, administrative disposition information, registration information, the seller's identity and agency, the basis for the deposit, and the flow of payment using separate documents and people.

The more advantageous a property is, the stronger the desire to decide on it as soon as possible. However, since the assets will be held for a long time, make sure that the person you are dealing with does not rush to confirm, and that they can explain the disadvantages and procedures in writing. When you are unsure about a transaction, a realistic option to protect your assets is to gather all the necessary documents before entering into a contract and then ask a third-party expert to confirm the transaction.

Frequently asked questions (FAQ)

Q1. What are the points to tell if it is a real estate scam?

A. If you experience multiple discomforts, such as sudden remittances, avoidance of identity verification or inspections, and account changes without documentation, you should cancel the contract. Please check the license, registration, seller's authority, and payment address using separate documents.

Q2. Will I be able to secure the property if I pay the deposit?

A. Payment of earnest money alone does not guarantee the safety of the transaction. Please check the contract, recipient, security measures, cancellation conditions, and procedures up to settlement, and consult with an expert depending on the type of transaction.

Q3. If I find a decoy ad, who should I contact?

A. Please save the advertisement screen and contact history, and first contact Consumer Hotline 188, etc. If you have any doubts about remittances or identity verification, consider consulting with the police #9110 or a lawyer.

Q4. Is checking the registration information sufficient as a countermeasure against landowners?

A. Registration information is important, but it does not guarantee the identity of the seller or the right of representation. It is necessary to confirm the payment system in combination, including identity verification, authority documents, on-site verification, and a judicial scrivener.

Real estate fraud techniques and countermeasures | 7 items to check before signing a contract