Rehana (not her real name) an Iranian national, was looking to move into an apartment. She found a promising property through a web portal. She contacted the agent who advertised the property and arranged to see the property in question. Rehana loved the property and agreed to the rate. As she was a foreigner and did not have a checking account, she paid the full deposit, in cash, to the agent. Unfortunately, she was unable to move into the property as the agent disappeared with her money. Calls to the agent’s mobile number were rejected or unanswered.
Searching for a suitable home can be a daunting task, especially if you are in a foreign country. At times you may find yourself at the mercy of people and circumstances beyond your control. In my experience in the property market, I have come across many stories, some are downright outrageous and I remember being amazed at the gall of the involved parties.
Rogue agents and unreasonable landlords are waiting to devour hapless individuals and exploit their naïveté and trust. However, with a little know how, you can make this potentially intimidating process a little less painful for yourself and your bank account.
Here are some practical tips that you can employ when looking at your next property rental or purchase:
1. Screen your agent
A real estate agent is your doorway into the local property market. However, not all real estate agents are cut from the same cloth. A good agent can be helpful and save you a lot of time; rogue agents can cost you a lot of money.
One of the best and easiest ways to get a good reliable agent is to go on peer recommendation. Ask friends and family for good agents that they have dealt with. This is a very effective way of cutting through the chaff.
It is always advisable to make sure that your agent is attached to a licensed real estate agency. Make sure you get a business card with the agency details. Call up the agency to ensure that they the agent is employed by them.
Another way to safeguard your interests is to request for referrals from your agent. Ask if they can provide you with 2 or 3 clients from the area that they specialize in. Call these referrals and ask them about the quality of service provided by the agent.
2. Know when to walk away
In most cases where a tenant has to deal with a horrible landlord or rogue real estate agent, there have been a few early warning signs.
When you find that your would-be landlord is very difficult to negotiate with in the beginning or that he is unnecessarily fussy about little things, it could be a sign of future problems to come.
Agents who are unreliable, tenants who drag their feet in paying initial deposits, rude behavior, fickleness, ridiculous demands, are all early warning bells. Play on the side of caution when you notice these and walk away. Listen to your gut instinct.
3. Leave nothing unwritten
Most of us are familiar with the saying, “The pen is mightier than the sword.” This is especially true when acquiring your first property overseas, whether it’s a rental or a purchase. A paper trail will be your best weapon if you find yourself in a dispute.
You will generally be asked to sign an Offer Letter before buying or renting a property. This precedes the actual Sales and Purchase Agreement (SPA) or Tenancy Agreement (TA). During the negotiation period of your tenancy or sale, make a note of conversations.
SMS or email these discussions to the parties involved and ask them to acknowledge receiving them. This is a good way to make sure that any information, promise, or discussion of future arrangements agreed upon is recorded. This will also deter the parties involved from making false claims and reneging on promises.
Always ensure that any promise or future arrangement is included in this offer letter. The offer letter is a legal document and can be used to settle disputes. Make sure you read and understand the SPA or TA before signing it. Ask and clarify details with your agent and/or landlord. With regards to a TA, look out for exit clauses and understand them. Ensure both parties sign before moving in. It is within your rights to request changes in the TA.
4. Never deal in cash
If you are asked to pay the deposit in cash, DON’T. This in itself should raise a red flag and you should extricate yourself form the situation post haste. Insist on paying by cheque or if you do not have a local bank account, you can pay by a banker’s draft. The recipient of the cheque should always be a licensed real estate company.
5. Insist on a receipt
Always insist on a receipt. A reliable agent from a reliable agency will provide you with a temporary receipt upon signing of the Offer to Rent (OR) or the Offer to Purchase (OP) and payment of the deposit.
6. Focus on prevention, not cure
Most of the time, settling a dispute in court is time consuming and energy sapping. Dealing with problems requires more effort than preventing the problem in the first place.
Therefore focus on prevention. Appoint good lawyers, take time to find a reliable agent, demand professionalism, look out for potential problems, and don’t go against your better judgment simply to expedite things.