29.12.2018 at 02:20
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In Moscow, You Must Be Certified Sane Before Selling Your Home

But that is seemingly a Catch-22. Is it sane to sell property in a market this crazy?

The problem — as in many places — is unscrupulous real estate agents. Russian media even gave it a name: "black realtors".

One common deception is for agents, working with vendors, to sell a home, then rush to court to have the sale invalided because, they say, the seller was "temporarily insane".

The seller keeps the home, and splits the money with the dishonest agent.

And the buyers lose their money, because legal remedies are hard to come buy. Current laws tend to protect the sellers, and in some cases, the judges were even in on the scam.

In nearly every residential property sale, out of the 140,000 sales per year, worth about $29 billion, buyers demanded certificates of sanity as a form of self-protection before handing over money.

It's pretty crazy when you need a signed certification from a psychologist to prove you're not crazy, before selling your house.

Another common scam is for property developers to offer discounted prices on new construction projects, only partly finish the project, and then declare bankruptcy and run off with all the money.

Last August, the Ministry of Construction said it had 34,085 open complaints about that particular sort of fraud.

Banks have trouble estimating risks in a market in which crime abounds, and there are few legal protections for those trying to buy or sell property.

The International Monetary Fund had declared that inability to properly assess mortgage risks poses a real threat to Russia's banking system.

It is fair to say that bureaucracy and corruption have traditionally gone hand-in-hand in Russia, and that is a big contributor to Russia's economic problems... bigger, perhaps, than even economic sanctions by other countries.

A few years ago, a group of real estate agents sought a piece of property with good lakefront access... for the purpose, it turns out, of disposing of the bodies of customers who had gotten in the way of their criminal enterprise.

Over a period of 5 years they killed at least 9 customers, and disposed of some of the bodies in the picturesque lake in the woods near Moscow.

Their scheme was to find elderly customers who wanted to sell their apartments and move to smaller towns outside Moscow, where property is less expensive.

When the apartments sold, the funds were placed in an escrow account controlled by the agents, and then the customers were taken on "house hunting" trips in the country... near the lake.

The customers were then drowned in the lake or smothered with plastic bags.

In another criminal scheme, 30 apartment dwellers were kidnapped, and the property brokers kept the apartments. The former occupants were put to work as slave labor at a distant farm.

So, in a country in which "fraud happens", according to a Moscow real estate agent, sellers now endure psychological tests, which take about 20 minutes.

But the psychologists do not offer opinions about people needing to be crazy to enter the Russian real estate market in the first place.

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