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Nine Amazing Rules to Avoid Land Scams that Will Blow Your Mind

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real estate scams foreign buyers

When we discussed risk/return analysis of real estate investment in Nigeria, we explained that real estate is a low-risk investment. The most dreadful risk in real estate investing is real estate seller scams. 

Real estate seller scam is a scam where a land or house buyer parted with money and either got nothing in return or got a substandard property. It is an act of fraudulently selling a house or presenting an unsolicited offer to purchase a property. 

This can be exemplified by a land deal a relative had some years ago which went sour:

So, I accompanied her recently to the land dispute resolution. She bought the 2 plots of land through an agent who doubles as a surveyor. As at the time of the transaction, I wasn’t a real estate consultant.

Hope you are following the storyline?

On the day of the transaction, the Omoniles (land sellers) signed and presented a deed of assignment and receipt which signalled the transfer of ownership of the property to the new buyer.

 

This brings us to a rule to observe when buying real estate in Nigeria:

Rule 1: Ensure you document everything. Duly signed Deed of Assignment and Receipt of Payment are key-documents that every land buyer must have. All other existing documents in the possession of the seller must also be relinquished to the buyer. Without the dual key-documents, the land still belongs to the seller. 

Video the documentation with your phone if you have any form of doubts. 

Rule 2: Choose cheques, bank transfer or direct deposit into the seller’s bank account over cash payment. Such types of payments are traceable and can serve as evidence if the deal goes sour.

If you are buying land from omoniles, ensure documentation and payment are tied together as a single event that occurred the same day. Duly signed documents should be collected after the payment is made.

On the day the buyer made payment for the land, the head of the family wasn’t around. She spoke with him on the phone and they agreed on a date for allocation. On the agreed day, she was allocated to another area, that’s though, within the same vicinity.

 

This brings us to a new rule:

Rule 3: If they are not available for allocation, don’t make payment. You are at the mercy of the seller once you’ve made the payment but it’s yet to be allocated. Omoniles can be very trickish. They can show you an attractive location in the community but later allocate you elsewhere.  

A year or two after the land deal, the agent started pressuring my sister to come and develop the land. It appeared the omoniles were reselling already sold lands.

 

This brings us to a fresh rule:

Rule 4: Take possession immediately. Even if you have an intention of selling off the property in future, ensure you take possession now by, at least, fully fencing and gating it.

Although the buyer had a mini-fence on the land, the seller still encroached on it. And resold 1 plot out of it to her neighbour who is already living just-a-plot away. He denied reselling the land, though the new buyer insisted it’s been sold to him until I came into the picture. We brought in a police inspector to investigate the matter. He found that the seller is notorious for selling the same plots to several buyers.

 

At this point, the deal has become a full-fledged real estate seller scam and it is such an unethical real estate practice.

This brings us to the rule below:

Rule 5: Investigate the authenticity of the land and the character of the seller.

Your legal practitioner will be useful here. S/he needs to check:

check authenticity of land
If you intend to conduct the search yourself, get the coordinates of the land and chart it up in the office of the state’s surveyor-general. That way, you will know if that parcel of land is under government acquisition or not. 
The seller claimed the agent gave him money for just one plot of land even though he signed the receipt and deed of assignment for two plots. What the seller attempted to hide from the buyer is – the surveyor was rewarded with three plots of land as payment for surveying three acres of land for the omoniles. So, out of the two plots sold to my sister, one belongs to the omoniles and the other belongs to the surveyor/agent. This explains why the surveyor gave them (omoniles) money for just one plot.

 

This brings us to rules 6 and 7:

Rule 6: Never ever pay into an agent’s account. Request for the account details of the owners and let it align with the names on the deed of assignment. The agent and seller should not use your transaction as a medium for settling their previous deals especially when they had some sort of disagreement.

Rule 7: Always ask for the history of the land before you buy. A land history reveals what makes the seller of a piece of land the owner of the land. Eg. inheritance, purchase, contract etc. The land history will let you know if there might be complications or land disputes in the future. That way, you know whether you should avoid the piece of land or not.

Rule 8: Buy from trusted real estate companies. It is safer to buy land from a reputable real estate company or through a reputable real estate agent than to buy from omoniles. The world is presently a global village. You can always get information about a company’s fraudulent behaviour online (if any) by searching Google. The easiest way to conduct such a search for example is to type site:websiteURL (fraud) or site:websiteURL (scam). Using De Donnies Homes as an example, you should type site:dedonnieshomes.com (fraud) as shown in the image below. Follow-up the links that appear to know if the organization involves in shady deals. 

verify real estate agents
Thus, making sure the realtor is legit is not much of an issue.
Rule 9: Perfect your document with the government. A two-storey building erected on the land of a Nigeria-born American was demolished at Badagry two years ago. She bought the piece of land twenty years earlier. She perfected the documents and went back to the United States only to return to find a building on her land. She went to court, won the case and requested the demolition of the house.
In summary, avoiding real estate seller scams bores down to caution, utmost caution! Be cautious all through and ask questions where necessary. Pause if you don’t get a convincing answer. Don’t take a pre-shot video for it if you can’t make it for inspection due to time or distance barrier because videos can be edited/doctored. You should rather choose a live video call on Messenger, Whatsapp, Zoom, Imo etc.
May you not have reasons to cry!

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