Unpleasant Surprises for Online Real Estate Buyers

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."

Comments

Check it out first, dammit

[KiloByte]

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

[ROOK*CA]

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

[drwho]

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.

This is an idiotic statement. There are plenty of good companies and individuals which are 'less well known'. Your ultra-conservative sentiment means you'll often end up paying more, getting less, and wondering why there's practical monopolies in the economy. Beyond this, even well known brands can be rip-offs - Radio Shack for instance, has knowningly sold completely defective products and left the consumer in the lurch. Enron and Parmalat were household names. Your statment is similar to the one "You get what you pay for" - which is also untrue and even dangerous. You pay what you negotiate, through some method or another.

This isn't to say that your sentiments aren't useful. If you and others spread the FUD about small companies, there will be less competition on ebay for the really good deals.

Sight unseen

[Southpaw018]

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."

Too good to be true

[Opportunist]

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!

Barnum was right

[ROOK*CA]

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:Darwin in action

[acvh]

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.

Eh?

[ErikZ]

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.