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Unpleasant Surprises for Online Real Estate Buyers

Zonk posted more than 8 years ago | from the caveat-emptor dept.

240

prostoalex writes "Buying expensive items online from the people you've never met without any guarantees on the seller's part might seem a bit risky even for an experienced Internet shopper. The 'hotness' of the real estate investment market apparently influences some cash-heavy investors to look for opportunities online. When the entire transaction is done via a click of the mouse, and the deed for newly bought real estate arrives in the mail, some unsuspecting buyers might discover that a cozy house near the bus line in the middle of a busy street might imply a criminalized neighborhood and proximity to crack house. The New York Times investigates negative experiences of people buying investment real estate online."

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In other news: water is wet. (1)

SlashTon (871960) | more than 8 years ago | (#14906309)


This really surprises anyone? I thought terms like "ideal for a DYIer!" have always meant "about to collapse" ?

Re:In other news: water is wet. (5, Interesting)

baryon351 (626717) | more than 8 years ago | (#14906475)

> This really surprises anyone? I thought terms like "ideal for a DYIer!" have always meant "about to collapse" ?

It surprises many people. There are plenty of people who, when faced by something that looks like a bargain, or looks like they're getting a good deal & ripping off the buyer will jump at a business chance without thinking things through, because the scammer has successfully planted an image in the buyer/victim's own mind. Imaginations are a powerful thing, and work against the victim.

A relative of mine (no relation apart from by marriage) came across his first nigerian scammer email a couple of years ago. He spent days thinking over the options and planning how to rip nigerianscammerguy off of all his money, instead of just getting 10% of the $50million promised.

I gave the guy a handy hint, advised him it's a scam and these guys will just try to take money from him and keep promising but never delivering. That's when he said he knew it must be a scam, and unveiled some 'foolproof' plan to get the money from the nigerianscammerguy but not reveal who he was or send them much money at all.

Eventually, he ended up losing about $2500 to the scammers getting played right into their game. Why? While he knew it was a scam, he made the stupid mistake of believing the $50 million actually existed. It clouded his vision, and all he could see was a mental image of his bank statement with 7 digits in the black. Same with real estate, the buyers make an image in their mind of what they're buying, and don't lose it - even buyers of property who get to inspect it will see what they want to, unless there are major differences between description and reality.

Re:In other news: water is wet. (1, Insightful)

Anonymous Coward | more than 8 years ago | (#14906731)

That's not imagination, that's just "greed", plain and simple. The 80s seem to have helped people forget that greed is generally a Very Bad Thing (one of the seven deadly sins and all...)

Buffalo, NY (2, Insightful)

Anonymous Coward | more than 8 years ago | (#14906310)

"Buffalo has been particularly hard hit by online flipping, as the city's persistent population decline and high foreclosure rates have created a glut of some 20,000 vacant houses."

Lots of fresh water, summer temps don't go above 90, winter temps above 0, sports teams, cheap housing...
I never could understand why Phoenix is gaining population and Buffalo is losing population.

Re:Buffalo, NY - white people (0)

Anonymous Coward | more than 8 years ago | (#14906366)

white people.

Buffalo has a white-flight death spiral worse than Gary, Indiana.

Re:Buffalo, NY (5, Funny)

CrazyTalk (662055) | more than 8 years ago | (#14906488)

As someone who grew up in Buffalo, I can sum it up in one word - jobs. OK, maybe two words - jobs and snow.

Re:Buffalo, NY (2, Interesting)

Jon_S (15368) | more than 8 years ago | (#14906598)

No, just the one word was right. Jobs. I have lived in Boston and the San Francisco Bay area and Buffalo is where I prefer... if you can get a good job. Perfect quality of life and climate (the snow is no big deal, not much different from when I grew up in Boston, and besides, it makes for great skiing). And as the article indirectly points out, real estate is very cheap. While only a fool would buy a house sight unseen in the East Side, my half acre lot with a beautiful ranch house and mature trees in an idyllic walkable community is only about $140,000 according to the bank. Of course, the reason things are so cheap is because of the lack of jobs.

I like to have people repeat the snow boogieman line, though. It helps keep the riff raff out!

Check it out first, dammit (5, Insightful)

KiloByte (825081) | more than 8 years ago | (#14906311)

If you buy something as expensive as a house without even bothering to take a look at it beforehand, you can't blame anyone but yourself. This is not a piece of bread -- you can't just shrug and throw it away.

Re:Check it out first, dammit (2, Interesting)

babbling (952366) | more than 8 years ago | (#14906360)

Damn right. In fact, any money spent online that doesn't go to well-established companies should always be money that you are willing to lose. There's never any guarantees about ebay sellers unless they have exceptional feedback for a LOT of auctions. (some dodgy sellers may "sell items" to friends to get positive feedback, before scamming other people)

Of course, some people deserve to lose their money more than others. I have far more sympathy for the bloke that lost $50 in a dodgy ebay auction than I do for someone who purchased property online without having seen it.

Re:Check it out first, dammit (4, Insightful)

ROOK*CA (703602) | more than 8 years ago | (#14906385)

Damn right. In fact, any money spent online that doesn't go to well-established companies should always be money that you are willing to lose.

Great point, I think I would take it even farther, when dealing with anybody less than a well-established company on the net, you should EXPECT to get ripped-off and take appropriate measures to protect yourself BEFORE you buy. Way too many people just assume that the government (or some other 3rd party) will protect them from fraud on the net, which IMHO is just plain foolish.

Re:Check it out first, dammit (3, Funny)

Fred_A (10934) | more than 8 years ago | (#14906427)

At least with V14gr4 you know what you're getting !

Re:Check it out first, dammit (3, Insightful)

Average_Joe_Sixpack (534373) | more than 8 years ago | (#14906413)

It's the penny stock investor mentality. They see these properties listed for 10k and think "Wow, what a bargain!" and then they don't bother to check if the property has any liens or structural code violations. Same thing with the idiots who buy "historic" homes only to be shocked with municipal restrictions when they try to renovate the property.

This current RE bubble is going to end in such a disaster I can't even contemplate how the US will ever work its way out recession that follows. The whole damn economy is built around suburban expansion and people borrowing against their homes. Anyone have a financial bomb shelter??

Re:Check it out first, dammit (2, Interesting)

Threni (635302) | more than 8 years ago | (#14906546)

> I can't even contemplate how the US will ever work its way out recession that
> follows

Stop buying expensive crap and learn to live happily and simply? I'm just guessing, but I doubt people from rich countries are any happier than people from poor countries. It doesn't cost much to survive in beautiful places like South Thailand, and it costs a fortune to live in stinky, dirty, crime-ridden London or New York. When did you ever go somewhere beautiful and see photos of cities with the slogan "get away from it all - go to London", for instance?

Re:Check it out first, dammit (1)

nelsonal (549144) | more than 8 years ago | (#14906569)

The problem won't be not buying expensive crap, it will be paying off the leveraged bet on expensive asset prices, if they were to decline. Not buying the expensive crap will sort of come naturally.

Re:Check it out first, dammit (2, Insightful)

badfish99 (826052) | more than 8 years ago | (#14906577)

I don't know about New Yaok, but I've met lots of people from Thailand who have come to work in London. It may be stinky but it's much easier to make a living there, even though things are more expensive.

The weather is better too: not so hot.

Re:Check it out first, dammit (1)

Bastard of Subhumani (827601) | more than 8 years ago | (#14906612)

I've met lots of people from Thailand who have come to work in London.
And judging from all the cards in phone booths last time I was there, they're all prostitutes and most of them are ladyboys.

Look again (1)

QMO (836285) | more than 8 years ago | (#14906722)

"When did you ever go somewhere beautiful and see photos of cities with the slogan "get away from it all - go to London", for instance?"

I don't know about London, but New York city is marketed very effectively as a place to go to have fun. And, while I have no desire to live in Manhattan, the property values demonstrate that plenty of people like it permanently.

Also, Las Vegas makes losts money telling people to go there to "get away."

Re:Check it out first, dammit (1)

sg3000 (87992) | more than 8 years ago | (#14906698)

> This current RE bubble is going to end in such a disaster I can't even contemplate how the US will
> ever work its way out recession that follows...Anyone have a financial bomb shelter??

Depressingly enough, probably the only "financial bomb shelter" is to invest your money in areas that will benefit from a real estate bust.

The problem is that too many people today believe that "flipping houses" is an easy way to get rich, just like the way people talked about day trading back in the late 1990s.

Too many people today believe the surefire way to get rich is to buy an almost dilapidated house on mortgage, do some cosmetic repairs, paint the house a neutral Pottery Barn color, add a granite countertop, a tile backsplash, and some stainless steel appliances. Do it all for as cheap as possible, and then sell it for a huge profit before the first payment is due. There are so many shows on television that show this, that way too many people are getting into this.

I've seen quite a few houses in my neighborhood go like this. A house goes on sale, and someone picks it up. Suddenly the landscaping improves and the trim is painted a different color (but that ominous rotting wood on the trim on the side remains), and before long, there's a cheap cardboard sign proclaiming something like, "A++ Realtors -- $0 Down/Willing to Finance 100%." There was a beautiful two story house with a graceful front yard and cathedral picture windows in the front that used to be a nice house. After no fewer than four owners in eight years, it's a wreck.

All of this reminds me of the (probably apocryphal) quote of Joseph Kennedy about getting out of the stock market in the late 1920s when the shoeshine boys were talking about which stocks to buy.

Re:Check it out first, dammit (2, Funny)

archeopterix (594938) | more than 8 years ago | (#14906457)

If you buy something as expensive as a house without even bothering to take a look at it beforehand, you can't blame anyone but yourself. This is not a piece of bread -- you can't just shrug and throw it away.
Agreed. One shoud also bear in mind that:

  • Running with unprotected scissors is dangerous, especially so if wearing high heels and running downstairs.
  • American football is played with an oval ball.
  • Starting a land war in Russia during the winter leads to defeat.
  • You can teach a dog to do tricks, but it takes a long time for an oak tree to grow.

Re:Check it out first, dammit (1)

KiloByte (825081) | more than 8 years ago | (#14906517)

Yeah, right -- but, the root of the problem is that "common sense" is the biggest misnomer.

You can dismiss some people as fools, but bear in mind that even we who usurp a mental superiority behave like idiots most of the time as well. Even me and you.

Re:Check it out first, dammit (0)

Anonymous Coward | more than 8 years ago | (#14906535)

an American football is actually an elipsoid.

Re:Check it out first, dammit (1)

bigberk (547360) | more than 8 years ago | (#14906575)

The reason they're not checking out what they're buying is similar to the reason nobody checks out the health of a company before buying stock in it, during hot streaks in the stock market (e.g. 1997-2000 - slashdot you remember that one, and now 2003-2006 for housing/financial stocks).

During investment manias, people get caught up in the "urgency" to buy something (like tech stocks) and don't do the appropriate research. Real estate has been on a hot streak due to easy credit, and many of these investors are looking to quickly flip property -- again, very similar to flipping internet stocks. You don't really care what you're buying, since you hope to flip the asset quickly to some "greater fool".

The greatest fools however are the ones flipping assets late in the stages of an asset bubble, and I need not point out that slashdot users probably learned this lesson well in the past. Unfortunately the people now doing essentially the same thing with real estate will also learn their lesson, and be left "holding the bag" with those shiatty properties.

Re:Check it out first, dammit (1)

Lumpy (12016) | more than 8 years ago | (#14906658)

Wow that is bad advice.

If you are going to spend over 5 figures on ANYTHING you had better get it appraised, inspected by a professional and completely checked out.

Fools buy things by looking at it themselves. Hell I can show you a house that looks like it is brand new but is a giant POS that only a moron would buy. Do you have the tools to look in the walls and see the massive termite damage? the dry rot on the foundation that is hidden by a beautiful remodel? or the fact that coming up here in the rain season the basement will have 3-6 inches of standing water in it for months because of faulty drainage? All of that can not be "seen" but only a professional inspection can uncover.

you hire the inspector and never use a reccomended one from the seller or agent. hire the guy that will be brutal so you get a real picture. If the inspection does not take 3+ hours then it was half assed and you need to get another one.

Re:Check it out first, dammit (1)

jimbolauski (882977) | more than 8 years ago | (#14906729)

When most people buy a house they need a loan, one of the conditions of the loan is that the house appraizes for the loan amount so being taken is a lot harder when your playing with the banks money, so all that realy happened to anyone buying a crack house is that the house he thought he could fix up and sell for more turned out to be a house that won't be able to sell for more until 10 years down the road they neighborhood gets revitalized. If anyone that dumb had enough money to pay cash then they obvisouly got it from one of two sources: the lottery so the buyer didn't realy lose anything it just means he can't lose the money else where, two Loan Shark Larry in which case his best bet would be to leave town now.

Anyone who buys real estate online is a moron (-1, Redundant)

Anonymous Coward | more than 8 years ago | (#14906314)

Given the capital cost of RE, and the extensive variability of the land and the improvements, how could you ever hope to really know what you were buying unless you saw it yourself?

Can anyone name a dumber thing to buy online? (3, Insightful)

ereshiere (945922) | more than 8 years ago | (#14906315)

Real estate, of all things, is something that someone should look at first. Is the entire world becoming a shut-in?

Re:Can anyone name a dumber thing to buy online? (1)

brewer13210 (821462) | more than 8 years ago | (#14906474)

Hopefully morons who spend their money in ways like this will soon be parted from it...removing their ability to make bone-head big ticket purchases and complaining about it afterwords.

Todd

Is the entire world becoming a shut-in? (1)

DogDude (805747) | more than 8 years ago | (#14906655)

Based on the boom in online shopping, and the boom in American's fat asses, I'd have to say resoundingly, YES.

Re:Can anyone name a dumber thing to buy online? (1)

castoridae (453809) | more than 8 years ago | (#14906725)

Not always. Many foreclosure sales are done without the ability to see the property (at least other than a cursory outside view). Sometimes the location covers the price regardless of the building, and often a developer will just knock down any existing buildings anyway.

That said, you better know the area well if you're going to do this.

PLEASE BE HELPING ME (5, Funny)

LiquidCoooled (634315) | more than 8 years ago | (#14906316)

i have 50 million of your american dollers stored in bank account.
my bank manager (mr arran) tells me i need an american to sign them over.
if you can help me to withdraw it from bank i will give you 40 percant.
yes, thats right i said 40 percant. you will get a whole 15million american dollers for helping me.
sinerity yours
mr wamo

re: paypal activity (1)

tomstdenis (446163) | more than 8 years ago | (#14906416)

De4r Customorbe:

Your Payp01 account has been hadding suspcicious "stuff" go on, please to make your correction!

Update your info [myfirst.ca...em.account]

---------------- skip ahead to site

Please enter your credit card number, security number, expiry, date of birth, mothers maiden name, social security, ATM pin and your home address for our databases! ....

Suprisingly those still catch people.

Tom

Re:PLEASE BE HELPING ME (1)

geminidomino (614729) | more than 8 years ago | (#14906455)

Damn scam artist! He assumed I couldn't do basic math and that he could scam me out of 5 Mil!

Oh, wait...

Darwin in action (4, Interesting)

Ancient_Hacker (751168) | more than 8 years ago | (#14906317)

If you drop $100K on something sight unseen, you deserve whatever you get.

Even a picture isnt enough-- there was a house in our neighborhood where the owner kept over 100 rabbits. With free run of the place. The house looked okay from the outside, maybe worth $260,000. But my friend the real-estate appraiser valued it at -$22000. That's how much it would cost to tear down the house, minus the value of the land.

Re:Darwin in action (1)

babbling (952366) | more than 8 years ago | (#14906344)

Then your friend the real-estate appraiser should go back to high school before making any important financial decisions.

The land was actually worth $238,000, that is, the value of the land minus what it would cost to tear the house down.

Re:Darwin in action (1)

moonbender (547943) | more than 8 years ago | (#14906583)

250,000 USD - value of a beautiful house
010,000 USD - value of the land
260,000 USD - sum, total value

000,000 USD - value of a house ruined by rabbits (how? I don't know)
010,000 USD - value of the land, same as before
-32,000 USD - cost to demolish house ruined by rabbits
-22,000 USD - new sum, total value

Re:Darwin in action (1)

Bloke down the pub (861787) | more than 8 years ago | (#14906700)

I don't know where this example is, but anywhere near a major conurbation land is expensive. I find it hard to believe that a buch of wee bumnny-rabbits could do that much damage. Two questions: 1) how much is a shotgun or a dog? and 2) pie or casserole? Mmmmmmmm.

Re:Darwin in action (4, Insightful)

acvh (120205) | more than 8 years ago | (#14906387)

I read this article yesterday - the guy bought a house for THREE THOUSAND DOLLARS! Come on, you can't buy a good used car for that. All this article really tells us is that a leech who was trying to flip houses for a quick profit got burned by a bigger leech.

Re:Darwin in action (2, Funny)

igny (716218) | more than 8 years ago | (#14906506)

I don't know about used cars, but I have a used bridge located on East coast of USA, which I can sell to you for mere $2999.95

Re:Darwin in action (3, Insightful)

spiritraveller (641174) | more than 8 years ago | (#14906519)

All this article really tells us is that a leech who was trying to flip houses for a quick profit got burned by a bigger leech.

It's not being a leech to buy something that you think is undervalued by the seller. Quite the opposite. It has the effect of smoothing out pricing in a market and making it more liquid.

No need to be jealous of those who find good deals before you do.

Re:Darwin in action (1)

Bloke down the pub (861787) | more than 8 years ago | (#14906663)

No need to be jealous of those who find good deals before you do.
In that case, you might be interested in the offer igny (716218) made above...

Re:Darwin in action (2, Informative)

lost_it (44553) | more than 8 years ago | (#14906671)

It's not being a leech to buy something that you think is undervalued by the seller. Quite the opposite. It has the effect of smoothing out pricing in a market and making it more liquid.

Whatever you need to tell yourself to make it easier to sleep at night... I'm about to move and was considering moving to a nearby larger city (where a lot of my friends moved a few years ago), until I saw the housing prices. The prices have doubled in the past three years. I know that housing prices go up in fits and spurts, but there is no way those houses are really worth what they're listing for. But people buy them anyway--and I can see you saying it now, "But if the houses are being purchased at that price, then they were worth that price, by definition." Which is where I point out that most people expect a house to appreciate in value, but those houses will probably drop in value or at least not increase for the next several years.

Here's what happened in this market: the housing price started to go up a little faster than average (because people started realizing that this was a nice place to live). Then the flippers said, "Hey, prices are going up. I can buy a house now, sit on it for a few months, and then sell it at an even higher price." People that had to move into the area (or people that had to move into a larger house), paid through the nose and hoped for the best. But there are only so many people like that (and everyone else is avoiding buying real estate in that area). In fact, recently I've seen new listings go up for considerably lower prices than before. So it looks like the bubble is starting to burst, and these flippers will get stuck with selling houses at a loss.

To summarize, all flippers do is temporarily raise housing prices to whatever the flippers think is the "true value" before the market corrects itself.

Re:Darwin in action (1)

acvh (120205) | more than 8 years ago | (#14906723)

"it's not being a leech to buy something that you think is undervalued by the seller"

that's not what goes on here. this is one more chump taken in by the "make your fortune in real estate" infomercials. his only problem was he bought TOO cheap, and couldn't get the appraisal he needed to mortgage the property, take out a bunch of cash, and resell it to the next chump.

Do your DD (2, Insightful)

Average_Joe_Sixpack (534373) | more than 8 years ago | (#14906318)

These speculators are no different than penny stock "investors" ... who could possibly feel sorry for them.

First... (2, Interesting)

hoodofblack (957491) | more than 8 years ago | (#14906319)

Yeah that would not be so good to have a house on a busy street next to a crack house...or a brothel...or a bar...or anything else other than a house.

Simple solution (0, Redundant)

spellraiser (764337) | more than 8 years ago | (#14906320)

Don't buy real estate you haven't seen.

Right?

Re:Simple solution (1)

AndroidCat (229562) | more than 8 years ago | (#14906742)

Which is why I always buy property on the Moon on the side facing the Earth, never on the farside!

Sight unseen (5, Insightful)

Southpaw018 (793465) | more than 8 years ago | (#14906324)

Buying items from a reputable, well-tested online company like (for example) Newegg or Amazon is one thing.
Buying collectibles off eBay is one thing.

Buying a big ticket luxury item - ANY such item - cars, real estate, houses, deeds...that's misguided at best unless you live in proximity to the seller and can see it (inspect it) yourself presale. We have a term for people who will buy things like this with full and total trust in the seller. It's called "sucker."
Or, if you're a proponent of our legal system, "plaintiff."

Re:Sight unseen (2, Insightful)

lheal (86013) | more than 8 years ago | (#14906508)

Particularly if the seller calls you up and says:

"Hi there, Bob. Can I call you "Bob"? I know we've agreed on $15,000 for the boat, but all of a sudden I've ... I've had some personal ... I don't want to burden you with the details. My daughter is ... anyway, I'm in a fix. I need to either call off the deal, or ... tell you what: could you give me just $12,000 for the boat, but send it to me directly, not through E-Bay?"

"We'll just tell 'em we cancelled the deal ..."

You and your $12,000 will be soon parted.

If you do this, you're asking for trouble... (0, Redundant)

babbling (952366) | more than 8 years ago | (#14906327)

Buying any real estate online is clearly a stupid thing to do. Anyone who does this was just going to lose their money via some other scam, anyway. There's not much point in trying to prevent them from losing their money, because they will eventually find a way.

A fool and his/her money will soon be parted.

Re:If you do this, you're asking for trouble... (1)

Manuka (4415) | more than 8 years ago | (#14906445)

A fool and his money are soon parted...

as well they should be, fools shouldn't be allowed to keep it.

The only factor that counts - CAUCASIAN percentage (-1, Troll)

Anonymous Coward | more than 8 years ago | (#14906332)

There is a 90% correlation of desirability of a neighborhood (safety, low crime, pleasing neighbors, increasing property value) and that is the demographic of CAUCASIAN percentage makeup of a neighborhood.

"Diversity" means one thing : CRIME and WELFARE

The facts are obvious if you compare the top 500 zip codes with the worst 500 zip codes in the USA.

The top 500 are as white as can be, and the worst 500 are practically devoid of white people.

This ridiculous article dances around the real issue : Buffalo has serious white-flight issues.

Re:The only factor that counts - CAUCASIAN percent (1, Interesting)

Anonymous Coward | more than 8 years ago | (#14906466)

By CAUCASIAN, I assume you mean the typical neo-Nazi WASP credential -- in which case I would argue that you are wrong. I worked for a city development office that put out about a 100+ 8-1/2x11 book on neighborhood crime statistics. When we moved to Baltimore, one of the first things I did was go to the city hall and ask for a similar set of stats on their neighborhoods. They looked at me like I was a martian, or at least a leftist agitator, so, in a moment of inspiration, I asked where the Jewish neighborhoods were. THAT they knew. Haven't regretted it. And in the subsequent move to our current city we did the same thing. It's great. We can watch the crime on TV from both the inner city _and_ the exurban white welfare meth lab trailer parks and apartment complex suburbs. In contrast, our very much inside-the-beltway, but not "inner" city, neighborhood public school has the highest test scores in the state.

So do Jews count as CAUCASIAN in your equation, Dudster?

I don't want to feed the trolls but (1)

Silver Sloth (770927) | more than 8 years ago | (#14906557)

Does anyone else notice that those with extreme reacist views never have the moral courage to put their names to them.

Re:I don't want to feed the trolls but (2, Insightful)

ami-in-hamburg (917802) | more than 8 years ago | (#14906571)

I believe it's because racism, bigotry, etc.. etc.. are generally fuled by fear. Therefore, cowards are the ones making the comments.

well thats just stupid (0, Redundant)

nickgrieve (87668) | more than 8 years ago | (#14906334)

Buying a house site unseen is just plain stupid, fools and their money indeed.

Re:well thats just stupid (1)

paiute (550198) | more than 8 years ago | (#14906718)

Buying a house site unseen

Accidentally perfect statement.

Too good to be true (4, Insightful)

Opportunist (166417) | more than 8 years ago | (#14906335)

If something sounds too good to be true, it most likely is. Why do people stop thinking when greed becomes a factor?

Someone sells you something for FAR less than what it should be worth, provided they're not lying. Bonus question for $1000: Why should they? Would you sell your house without at least getting a rough quote from some online service how much your hut is worth? Hey, we're talking a few 1000 bucks at the very least here, it's not like I'm selling some old junk that might be someone's treasure, a house is a house, and by its very nature, it has value! And everyone, literally everyone, knows that.

So why should you think someone does NOT know that a house is worth more than a few 1000 bucks, especially when it's somewhere in downtown?

Just like with used cars. When the year old car that's been driven only by a cute old granny, always just to church and back goes for less than 1000 bucks, would you buy it?

I wouldn't even buy the story, and certainly not the car!

Now that's laziness (-1, Redundant)

MikeRT (947531) | more than 8 years ago | (#14906341)

Sorry, but anyone who buys a **house** online and doesn't check it out first is a moron. They deserve as much sympathy as someone who sinks their entire life savings, knowingly, into a get rich quick scheme.

Barnum was right (4, Insightful)

ROOK*CA (703602) | more than 8 years ago | (#14906342)

from the article:

"Mr. Hoyt said he had repeatedly appealed to eBay officials, asking the company to make specific changes, like informing sellers that they must comply with New York State disclosure laws and requiring a copy of written sales contracts. But Mr. Hoyt said he had received little cooperation from the company.

"What eBay is doing, in my opinion, is immoral," he said. "They have a responsibility to not facilitate activity like this."


Wait a minute, eBay has a seller rating system, eBay has an escrow service, so who in there right mind buys a HOUSE sight unseen, from an unrated or negatively rated seller, without using escrow? I think this is a problem with some people, they make stupid buying decisions and then turn around and want the listing agent (or the government) to take some sort of responsibility for it.

I'm not trying to relieve any of the responsibility for this off unscrupulous sellers (it is in fact immoral to intentionally rip off buyers), however at some point buyers need to have enough common sense to do at least a modicum of due diligence don't you think? Apparently people think that caveat emptor doesn't apply on the Internet, when in fact it's probably the most important consumer protection mechanism, especially when most of the tools you need to do your due diligence are at your fingertips (MLS services, city records, etc..,)

Also from the article, this one IMO is a true "gem"

"Mr. Krug said Mr. Tanner had asked him the same question. "I told him the first thing he did wrong was buy a computer," Mr. Krug said."

Amen Mr. Krug, Amen.

Re:Barnum was right (1)

Red Flayer (890720) | more than 8 years ago | (#14906479)

"(it is in fact immoral to intentionally rip off buyers)"

Morality is subjective; the morality of an action cannot be immoral in fact, but only in someone's opinion.

It may be a fact that you think it is immoral -- but plenty of people have no moral qualms about getting the best price possible. People always try to show properties in the best light when they are selling; is that immoral?

That said, I agree with you in general -- caveat emptor still applies, and unless the seller made false claims about the property, the buyer needs to chalk this up as a learning experience.

Re:Barnum was right (1)

Asic Eng (193332) | more than 8 years ago | (#14906522)

I disagree regarding the computer aspect here. Mr. Krug was taken because he has been absurdly careless with his money. He could have just as easily lost it by buying a ruin which was advertised e.g. in the New York Times. Of course then Mr. Krug and Ms. Fennelly might complain that they'd seen the ad in a reputable paper.

Re:Barnum was right (1)

leuk_he (194174) | more than 8 years ago | (#14906622)

from an unrated or negatively rated seller

Even if it was from a positive rated seller. If he sold some very small items it would have been easy to get a good rating. Then make a big rip of on a big item and just loose 1 rating.

And then there are also hijacked accounts.

By the way, anyone here interested in buying a place that contains toxic waste?

Re:Barnum was right (0)

Anonymous Coward | more than 8 years ago | (#14906676)

Barnum was right, but he didn't say what you think he said.

Barnum would like you (1)

DogDude (805747) | more than 8 years ago | (#14906693)

Wait a minute, eBay has a seller rating system, eBay has an escrow service, so who in there right mind buys a HOUSE sight unseen, from an unrated or negatively rated seller, without using escrow?

The fact that you qualified this post with "if you had used eBay's escrow services, or bought from a highly rated seller" proves that you're one of those suckers Barnum was supposedly talking about. Trusting eBay for any kind of purchase is just stupid. I haven't known anybody who HAS NOT gotten scammed from eBay at least once.

JRGhaddar (5, Funny)

JRGhaddar (448765) | more than 8 years ago | (#14906350)

They don't tell you you're going to be across the street from a crack house. Yeah but if you get 3 more crack houses you can then upgrade to a bordello, and that's where the money is...

Re:JRGhaddar (1)

AndroidCat (229562) | more than 8 years ago | (#14906754)

Cool, another Grand Theft: Monopoly fan!

It's the same for most major purchases (1)

matr0x_x (919985) | more than 8 years ago | (#14906351)

Honestly, the same issues this article is shedding light on apply to any major purchase you make online. A lot of cars being sold online have small defects in them, they state the cars year and mileage, but fail to mention that it was abused for several years and doesn't quite shift properly, etc. Caveat Emptor applies to every major situation - and it's harder to be fully aware of what you're purchasing when you're riding 100% on how someone else describes it.

Reasearch! (1)

Drakin (415182) | more than 8 years ago | (#14906369)

Why do people seem to think that buying on the net is that much easier?

No matter how you're buying something, you need to do some research into what exaclly you're buying.

Re:Reasearch! (1)

Vo0k (760020) | more than 8 years ago | (#14906545)

Oh, but it IS easier!
Russian Roulette is easier than Bingo too.

Online real estate? (1)

Marimus (5470) | more than 8 years ago | (#14906372)

I thought they were talking about Second Life or some MMORPG.

Right up until I read the article anyway.

Sight unseen? (2, Funny)

erick99 (743982) | more than 8 years ago | (#14906392)

And I worry about buying a $20 item on eBay based on a description and a photo......

Common sense (0)

Anonymous Coward | more than 8 years ago | (#14906395)

What is it about those twits that common sense is increasingly identified as "news"?

Hmm (1)

Turn-X Alphonse (789240) | more than 8 years ago | (#14906406)

I always thought the rules for buying online is "Never spend more than you are willing to lose" unless you would trust the website with your life.

Hell these guys got a house, they could of just got a garden shed put on illegal land or fake deeds. May not be the super nice advertised place hey said, but they could at least give it to a charity working with these type of people (read : homeless, prostitutes, etc.) and let them turn it into a safe house of sorts to supply food to people if nothing else.

Re:Hmm (2, Insightful)

ROOK*CA (703602) | more than 8 years ago | (#14906437)

May not be the super nice advertised place hey said, but they could at least give it to a charity working with these type of people (read : homeless, prostitutes, etc.) and let them turn it into a safe house of sorts to supply food to people if nothing else.

Unless of course the cost of getting the building up to code or tearing it down is greater than the value of the place, in which case a charity isn't going to take it, since they would in effect be paying you to take the property off your hands. I'd imagine that's the goal of some of these Real Estate "flippers", sell it for way less than the value of the land and pass along the incumberances of the house to somebody else, in essence they are making the seller pay for the priviledge of paying the liabilities on the property. Which ends up being a ponzi scheme, everybody in the chain makes money except the last guy (who can't even then give the property away).

Some obvious solutions (1)

Dekortage (697532) | more than 8 years ago | (#14906420)

Well, the buyer can just turn around and resell it on eBay -- hopefully recouping their loss. One idiot can sell to another, right?

But I'm concerned by this sentence: "The practice, local government leaders say, is destabilizing already weakened urban neighborhoods by displacing legitimate investment." That is a real problem. Perhaps it should be illegal to purchase a house unless you sign something stating that you (or your legal representative) has seen the place in person. I mean, you cannot legislate intelligence, but you might be able to erect a few barriers to stupidity.

Re:Some obvious solutions (1)

ROOK*CA (703602) | more than 8 years ago | (#14906465)

Well, the buyer can just turn around and resell it on eBay -- hopefully recouping their loss. One idiot can sell to another, right?

Sure, if the idiot doing the selling is an idiot with no integrity.

But I'm concerned by this sentence: "The practice, local government leaders say, is destabilizing already weakened urban neighborhoods by displacing legitimate investment." That is a real problem. Perhaps it should be illegal to purchase a house unless you sign something stating that you (or your legal representative) has seen the place in person. I mean, you cannot legislate intelligence, but you might be able to erect a few barriers to stupidity.

I see your point, however I suspect the comment regarding market destabilization is specifically designed to drive legislation, how can a market where there is apparently no practical way to sell under legitimate circumstances be "destabilized" any further? Personally I don't think the public should pay to protect adults from their own blatant stupidity and laziness (via additional legislation).

Re:Some obvious solutions (1)

Vo0k (760020) | more than 8 years ago | (#14906536)

Oh, but why? Responsible buyers buy from responsible sellers in a responsible manner, and can recognize a scam long before they get involved. This sector of market is stable. Idiots buy from scammers. This sector of market is unstable, but who gives a shit?

I'm not sure about the origins of the following quote, but I certainly love it:
"I'm not saying there should be capital punishment for stupidity, but why won't we remove all the warning labels and let the problem solve itself?"

Re:Some obvious solutions (1)

sethg (15187) | more than 8 years ago | (#14906721)

The easier it is to make money as a real-estate con artist, the harder it is to make money as a legitimate salesman. (For example, it becomes harder for the legitimate people to build trust with their customers, because the crooks damage the reputation of the whole market.) This reduces the liquidity of the market, which is a nuisance for anyone trying to buy or sell property.

I don't have much sympathy for the people who bought these slums sight-unseen, but like drunk drivers, their stupidity harms people other than themselves.

Why didn't I think of that? (0)

Anonymous Coward | more than 8 years ago | (#14906436)

There I am trying to flog rubbish on ebay for $20 -- $100, in the hope that some people don't check well enough for crooks like me before bying something cheapish.

And these people actually sell $200,000 houses on ebay! Brilliant! Why didn't I think of that before!

Dear Slashdotter, (2, Funny)

archeopterix (594938) | more than 8 years ago | (#14906478)

I am contacting you with this fabulous business offer. I am selling a property at a bargain price of $50000!. I have prepared some pictures here [google.com] .

Re:Dear Slashdotter, (1)

CrazyTalk (662055) | more than 8 years ago | (#14906501)

Thats nice, but I'd be more interested in the Brooklyn Bridge. Isn't that the one that is usually for sale?

.. I got scammed like this (4, Funny)

neveragain4181 (800519) | more than 8 years ago | (#14906481)

Yeah, got hit by the unexpected shipping charges...

4 rules to cover your ass (0)

Anonymous Coward | more than 8 years ago | (#14906482)

1. Use a big escrow company and do a 30 day escrow, including a phrase that says you have 1 week to inspect the property.
2. Hire a good inspection company to inspect the place.
3. Go there yourself, you won't waste a trip because at least you know you are going to buy the place (rather than just win the auction).
4. Title insurance is cheap.

It's really not that hard to cover your ass on this.

I always wondered. (1)

Joebert (946227) | more than 8 years ago | (#14906492)

I always wondered where people that won the powerball spent the money.
I'm sorry, but anyone buying a HOUSE on the internet obviously isn't spending money they worked very hard for...

Trusted Realtors (1)

tekcsound (857579) | more than 8 years ago | (#14906505)

I repeat the previous sentiments: buying property on eBay w/o escrow, what are they thinking?

I do web work for a realtor who sometimes sells commercial properties (apartments etc.) to clients who've never seen what they're buying in person. Then again, he's with one of the larger agencies and does the actual purchase through traditional channels.

Plus, with the virtual walkthroughs I'm doing, the client has a pretty good idea of what they're buying beforehand. So yes, buying properties "online" is possible, but the client needs to use their brains a bit when choosing who they work with.

But the price was _so_ good (1)

smchris (464899) | more than 8 years ago | (#14906521)

Just for the concept, I still regret not being able to say I got a new car for $3999.99 in 1989 when a local dealership was dumping Yugos. Same thing for some of the stuff on ebay. How could a piece of that resort timeshare outside Kwa Zulu Natal not be worth $1500?

Well, let us count the ways, right?

Google Earth might help (2, Interesting)

digitaldc (879047) | more than 8 years ago | (#14906532)

If you want to get a good overview of what you are buying, try typing the address in Google Earth [google.com] and then see what lies around it.

Google Maps and Earth (2, Interesting)

AnonymousPrick (956548) | more than 8 years ago | (#14906550)

I see a lot of posts saying, "Don't buy sight unseen!"

But, no one has suggested using Google maps/earth. That's what I would do even if I were buying locally.

I was once on a trainging flight and as I passed over this really expensive neighborhood, I saw a quarry not more than a few hundred yards away, tucked in a very heavily forested area. I'm sure after they spent mega$$ on their McMansions, they were probably surprised by the blasting and all of the trucks going by.

Now, I'd make sure there wasn't any surprises like that if I were buying a home.

Re:Google Maps and Earth (1)

castoridae (453809) | more than 8 years ago | (#14906747)

A lot of developers make it regular practice to use helicopter fly-bys to check out parcels of land they are interested in purchasing/developing - or to find new areas in which they may want to purchase/build.

Could have been worse... (2, Interesting)

spiritraveller (641174) | more than 8 years ago | (#14906555)

If it had been contaminated with toxic waste (e.g. from a meth lab), he could have ended up owing thousands or millions to the government [wikipedia.org] for clean up costs.

Not all online real estate deals are dangerous (2, Interesting)

ami-in-hamburg (917802) | more than 8 years ago | (#14906560)

Some online real estate deals are, for the most part, safe.

For example, wilderness purchases if you should have the inclination to build a getaway cabin. Granted, there are no structures most of the time, it's just the land.

Another example would be buying fringe properties. If you believe that a company or a city will eventually want to expand into a particular area, you might want to buy the land if you have the chance to get in early enough. You would have to look out for potential immenent domain problems though. A friend of mine inherited basically a huge field when his parents died in a small town in central Arizona. About 3 years ago, some company wanted to build a retirement village with a golf course. They paid him 7 Million for a stupid field. Sweet!

Other potential online purchases would be castles. Yes, that's right, castles. There are dozens and dozens of mansions and castles that sit in what was formerly East Germany. The original owners have simply abandoned them and the local authorities auction off the properties. Many times they go relatively cheap, like a couple thousand dollars cheap, if you don't mind the renovation costs. They can make great vacation spots or quiet retirement villas.

And still going.... (2, Interesting)

flipper65 (794710) | more than 8 years ago | (#14906581)

Just out of curiosity, I cruised over to ebay and searched for real estate in Buffalo. Surprise, surprise, a 'Mr. Burt' is listing a fixer upper for a very low price. Coincidence? I don't think so. I was going to insert something here about not buying sight unseen, but then I sat back and thought about it and realized that I might very well have done the same thing. Dropping 3K to own a bit of real estate doesn't seem like a bad flyer. How bad could you get hurt? This was actually a wake up call for me.

Loads freaky ebay stuff that's too good to be true (2, Interesting)

AndroidCat (229562) | more than 8 years ago | (#14906603)

Check this "dragon chopper" [ebay.com] motorcycle. I'm sure that there'll be a number of buyers for these that will end up disappointed when it comes time to actually register and plate them. (For one thing: no place to hang the plate!) Little details like no break or turn lights, an EPA certification that's probably virtual, might make it hard to get on the road. Which is good .. because if you do get it up to the claimed 128 MPH (from a 200cc aircooled 1 cyl engine, narf!), slowing with the cable front breaks could be problematical even if the frame holds up. From a seller that got a shipping container from China, and once they're sold, he's gone. All these warning signs, and people still buy them online, sight unseen.

Still .. beautiful plumage!

Re:Loads freaky ebay stuff that's too good to be t (1)

AndroidCat (229562) | more than 8 years ago | (#14906715)

I swear the break / brake typos were not deliberate on a conscious level. Not enough coffee for conscious levels yet.

Greed overcomes Reason (1)

hattig (47930) | more than 8 years ago | (#14906635)

Idiots. Fancy not even researching the area where a house is!

I don't feel very sorry for these people. They should have known better.

OTOH the people 'flipping' these houses aren't exactly nice people either, and seem little better than scammers. Clearly sales of houses online should be subject to the same laws as selling them elsewhere - i.e,. the description has to be accurate, as the article says.

He should be thankful he is only $30,000 down on the situation. A lot, but not life-changing. If you can't afford the risk, then don't take it.

mod 0p (-1, Troll)

Anonymous Coward | more than 8 years ago | (#14906660)

Would they write a story about positive experience (1)

slashname3 (739398) | more than 8 years ago | (#14906665)

The New York Times investigates negative experiences of people buying investment real estate online.

So people bought real estate without ever seeing it and some of them did not get what they thought they were buying? Gee, who would have thought that would happen? Probably the same people that are working with a Nigerian representative to get money out of that country. What better place to park a lot of money they will be getting soon, property purchased via the Internet.

Such people should have their computers confiscated and be barred from using electronic devices. These are the same people that jam forks into toasters and plug to many things into a single outlet.

Gotta love the internet (1)

taff^2 (188189) | more than 8 years ago | (#14906707)

There's an old saying that goes

"A fool and his money are easily parted."

Now, thanks to the internet, it's even easier! Caveat Emptor!

Various Aphorisms Apply (1)

the eric conspiracy (20178) | more than 8 years ago | (#14906719)

Caveat Emptor
A Fool and His Money are Soon Parted
Nobody ever went broke underestimating the intelligence of the American public
SEC v. Zandford (01-147)

Eh? (5, Insightful)

ErikZ (55491) | more than 8 years ago | (#14906720)

The guy spent 10k. On THREE houses.

A deal like that, one would expect them to be on the edge of an active volcano.

At this point, you level those houses and rebuild on the property. 3k doesn't get you a house, it gets you land with house shaped debris on it.

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