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Investment and vacation property land scams have been around since Pluto was a Pup, but unsuspecting consumers are still being regularly bilked.
Often the land, if it exists, is a swamp, located in an unattainable area, unreachable by necessary utilities, in an area where weather or the environment is unacceptable (flash flood areas, tornado alleys, etc.) or is simply exceptionally overpriced for that venue.
Typically folks tend to look at prices in the areas they are familiar with and have little knowledge of land prices elsewhere. Thus a five acre parcel offered at $5,000 in South Dakota might look attractive to a East Coast resident, who would consider five acres in his or her environment to be a bargain at twenty times that price. However, comparable parcels in South Dakota might easily be found for $500.
Before buying any real estate, consumers should always:
Contact a local Realtor and obtain "comps"--comparable prices.
Visit the property before making any commitment.
Get any and all sales claims and guarantees in writing.
Obtain a property report from the salesperson or developer.
Contact the Better Business Bureau in the locality of the property.
We also recommend that persons purchasing property employ the services of a competent "real estate attorney". (Not an attorney specializing in other areas or a general practice attorney, who may well know less about real estate than the consumer.) Additionally, an independent appraiser's report can be of great value in these cases.
Generally speaking in the U.S., under the law, purchasers have the right to cancel a sales agreement within seven days of signing if they have already seen a property report (consumers may have more than seven days under some state laws) and consumers may also have the right to cancel the agreement within two years if they did not the property report before signing the purchase agreement.
If a land developer or promoter has fraudulently misrepresented the property, consumers may take legal action in an attempt to get their money back. If the U.S. Mail was used to promote a land sales fraud or obtain money in a fraudulent manner in a purchase or lease transaction, the U.S. Postal Inspection Service also may be of assistance.
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