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

Darwin in action

[Ancient_Hacker]

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:In other news: water is wet.

[baryon351]

> 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.

Diversity?

[QMO]

"Diversity" means one thing : CRIME and WELFARE

Interesting that you put "diversity" in quotes.

When we moved to our current apartment my wife looked up some crime stats for various neighborhoods.

With 100 as the national average:
Some areas of Newark, NJ were 400 or more.
The small town where I went to high school (about 2000 pop, 50 miles from nearest Mc Donald's) was about 25 or so, IIRC. The town has significant Mexican (ex-pat) and Navajo populations.
The town where our apartment is, rated 4. That's right, single digit, 4.

This is the most diverse place I've ever lived, or visited. On my short block (duplexes and single-family homes) there are at least 6 native languages.
My daughter's first grade class had a variety of Christians along with Jews, Muslims, Buddists, and I don't know what religion the kid from Mongolia follows. The school has maybe 20 students that would qualify for free or reduced school lunch.
When I'm in church on Sunday I talk to people from Nigeria, Jamaica, Haiti, Mexico, Chile, Peru, Germany, Philipines, Eastern Europe, etc.

We happened to drive through one of those very high crime areas of Newark and my daughter had a question. "Why is everyone the same color?"

Result: In my (perhaps not statistically significant experience) it is the lack of diversity that has a positive correlation with crime and welfare. So, I think it's interesting that you put "diversity" in quotes.

The trouble is that I doubt that I'll ever be able to afford to buy a home in the town where I live.

My Family Sold a House Online

[maggard]

About 10 years ago my mother and her sister bought a summer house in Nova Scotia, Canada. Both are from there, though nowhere near where they bought the house and they now live in Boston, Mass. & Vancouver, B.C. respectively. However it was a pretty place, along a river, 100 acres, two barns, woods, orchard, fantastic year-round neighbors, good deal, etc.

However my aunt is a real estate agent and after a few years of flying cross-country for vacations wondered if her investment money wouldn't be more productive elsewhere. So almost on a lark she listed on an online auction site, no commitment to sell. And the bidding went insane!

So she called up Mom, confessed what she had done, then agreed that if the silly numbers were true they'd sell. They ended up having a prospective buyer fly up from Texas and stay in the house for a few days. The buyer loved the place, made an offer that was jaw-dropping by local real estate values, and the place was sold.

However, the buyer was from Texas, i.e. a US citizen. This hadn't been an issue for my mother, after 40-some years in the US she has always remained Canadian, but they did warn the buyer they'd have to look into local laws, particularly as they were dog-breeders and planning to use the barns for kennels, etc.

(By the way, Nova Scotia is cheap and trying hard to make itself attractive to retirees; if you're looking for a vacation place or to retire it's a great place to consider!)

Anyway, within a few years the new buyer had to sell. They'd not done their homework and had instead simply moved and started selling dogs. Apparently when informed they'd have to leave the country and immigrate the legal way they didn't find a peer online to sell the house to and instead sold at a rate far more in keeping with the local norms, and thus took a complete bath on the whole process.

So my family had a GREAT experience, others might not do so well...

Oh, and there's my buddy Richard, who buys a new eMachine PC on sale every year, images it's drive, pulls out and replaces the parts he doesn't care for, then a year later sets it back up the way he got it and sells it online, every time for more then he'd bought it for a year earlier! There really is another sucker online every minute!