How to avoid fraud when buying a home?
Buying a home is one of the most important decisions in life. High real estate prices and the desire to close a deal as quickly as possible make buyers vulnerable to fraudsters. This article will help you recognize the main scams in the Calgary real estate market, learn about precautions and procedures for verifying sellers and documents to protect your investment and peace of mind.
The Calgary real estate market: fertile ground for fraud
Calgary is known for its high housing prices, especially in central and newly developed areas. Strong demand creates competition, which leads to hasty decisions by buyers. As the number of transactions increases, so does the risk of fraud, ranging from forged documents to fake sales where the seller has no rights to the property.
Typical fraud schemes
The most common schemes involve document forgery, “duplicates”—copies of listings with different prices and terms—and the use of “front men,” where an unlicensed real estate agent pretends to help sell a property. They practice “kickback” deals: the buyer transfers a deposit to the account of an unknown person and later learns that the legal seller is not even aware of the deal. Sometimes scammers resort to fictitious leases with the right of redemption, leaving the buyer without a home and without money.
Choosing a reliable real estate agent and checking their license
The first step to safety is working with a licensed real estate agent registered with the Real Estate Council of Alberta (RECA). Before signing a contract, be sure to check the agent's license number on the RECA website and review any complaints and disciplinary decisions. A reliable real estate agent will not pressure you on deadlines and will honestly disclose information about the seller and the property's history.
Research the owner and title
Be sure to check the property rights through the Alberta Land Titles Office. A title search will reveal any encumbrances, such as mortgages, liens, court orders, or easements. If the document confirms the seller's rights, review all relevant details, including the date of the last transfer, previous owners, and terms of transfer.
Legal review of documentation
Even if all the paperwork looks flawless, it is worth hiring a lawyer or notary who specializes in real estate. They will verify the validity of wills, powers of attorney, the absence of forged signatures, the correctness of the wording in the purchase agreement, and agree on the terms and conditions for the transfer of the deposit and final payment.
Terms of the contract and escrow account
Do not transfer large sums of money to the seller's or agent's personal account without a formal escrow agreement. An escrow account at a bank or through a professional escrow agent guarantees that the funds will be held until both parties have fulfilled their obligations. The terms for transferring money and returning it in case of a broken deal should be clearly stated in the contract.
Checking the condition of the property and repair history
Scammers can hide property flaws by doing temporary “cosmetic repairs.” An independent home inspection will help identify structural damage, problems with water supply, heating, and electricity. Ask the seller for a history of major repairs and supporting documentation.
Be cautious with prepayments during negotiations
Be vigilant if, during negotiations, the seller insists on prepayment before signing the official contract. Usually, a real estate agent only requires a symbolic deposit and specifies it in the contract. If the seller avoids notarization or asks for cash, this is a serious sign of fraud.
Financial check of counterparties
Before transferring money, check the seller's financial reputation. If the property is being sold by a private individual, look for reviews online, check social media, and in the case of a construction company, check ratings and the history of previous projects. A corporate search will reveal any lawsuits, liens, or debts.
Use official online resources
Use official platforms such as Zillow, Realtor.ca, local MLS services, and do not rely on third-party websites with “home sales” at reduced prices. Check the price per square meter — too low a price may be a ploy to attract victims.
Signing and archiving documents
After signing the agreement, carefully check all signatures, dates, and figures in the contracts before making the final payment. Keep all copies of contracts, receipts, and correspondence by email. In case of a dispute, these materials will serve as evidence.
What to do if you suspect fraud
If you have any doubts after signing a preliminary agreement or making a deposit, contact the Calgary Police Service and RECA immediately. File an official report and attach all available documents. At the same time, consult a lawyer and immediately freeze payments through your bank.
Psychological preparedness and caution
Fraudsters often use pressure by setting deadlines, promising bonuses for quick decisions, or playing on emotions. It is important to remain calm, not rush into anything, and not be tempted by dubious “benefits.” Trust only verified professionals and your own research.
Conclusion
It is possible to avoid fraud when buying a home in Calgary if you approach the process with caution, check all documents and contractors against official sources, and use the services of licensed professionals. A systematic approach, from choosing a realtor to signing the final contract and archiving documents, guarantees a safe transaction and protection of your funds. You will feel confident and be able to enjoy your new home without fear of fraud.