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Unpleasant Surprises for Online Real Estate Buyers 240

Posted by Zonk from the caveat-emptor dept.
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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Unpleasant Surprises for Online Real Estate Buyers More

Unpleasant Surprises for Online Real Estate Buyers

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  • Buffalo, NY (Score:2, Insightful)

    by Anonymous Coward
    "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 (Score:5, Funny)

      by CrazyTalk ( 662055 ) on Monday March 13, 2006 @08:40AM (#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 (Score:2, Interesting)

        by Jon_S ( 15368 )
        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 i
    • "winter temps above 0"
      Easy change that to winter temps above 40 and you have a winner.
      Cold is one of the reasons. The other is that the north east outside of Boston and New York City have a bad reputation. There are lots of areas with low cost housing and a good quality of life that are having the same type of problems as Buffalo.

  • Check it out first, dammit (Score:5, Insightful)

    by KiloByte ( 825081 ) on Monday March 13, 2006 @07:45AM (#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.
    • 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 f

      • Re:Check it out first, dammit (Score:5, Insightful)

        by ROOK*CA ( 703602 ) * on Monday March 13, 2006 @08:02AM (#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 (Score:5, Insightful)

        by drwho ( 4190 ) on Monday March 13, 2006 @10:29AM (#14907084) Homepage Journal
        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.

    • 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 dam
      • > 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
        • 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.
          • The way the govermint (read: The FRB) is going to get the country out from the insanly high mortgages now being paid, once the market collapses, is to debase the currency. I mean massive inflation. Suddenly, that $2500/mo mortage will seem like peanuts and the administration will stay in power.

            The other thing that's interesting is that the economy is moving from one based upon capital to one based upon debt. Americans, supposedly, owe more on credit cards than their net worth - as a whole (not the average!)
        • 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.

        • "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."
      • > 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 ma
      • >>Same thing with the idiots who buy "historic" homes only to be shocked with municipal restrictions when they try to renovate the property.

        Historic Renovation is something that I did once ( I like to restore Victorians ). I will NEVER do a historic home again.

        I could take a Victorian, restore it fully without using anything new ( maybe slight plumbing issues, but everything original and old ) and finish without a problem within 48 days. ( I had the best crew and we always worked 6 days a week ).

        the o

    • 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
      • 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.
      • You forgot the most important one: If you change horses in the middle of the stream without a paddle, you might find that the broth is spoilt before it's hatched out of the bag.

    • 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 a
    • 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 rai
    • People spending hundreds of thousands of dollars with sellers of unknown reliability on land and houses they've never seen sometimes get ripped off.

      Film at 11.

      If this were fark.com, I'd be adding a pic of a certain reporter with bad hair.
    • This also happens offline. There was a story about 4 months ago in the CLeveland Plain Dealer (The archives aren't free from that far back, so no link) about a woman who was talked into investing in 4 houses in Cleveland. She bought 4 houses, no money down, using her decent credit, sight unseen. I think she paid (well, owes) about 200K for the 4 houses. Turns out the houses were worth about 40K total for all 4. I don't know what came of it- I think they were trying to go after the guy who talked her into it

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

    by ereshiere ( 945922 ) on Monday March 13, 2006 @07:45AM (#14906315)
    Real estate, of all things, is something that someone should look at first. Is the entire world becoming a shut-in?
    • 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 (Score:5, Funny)

    by LiquidCoooled ( 634315 ) on Monday March 13, 2006 @07:45AM (#14906316) Homepage Journal
    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
    • 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
      • 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.
        Personally, I've always thought that what has the greatest potential would be to operate an entirely legitimate site that offers a genuine service which requires a user name and password, and then go out and hit the major sites (banking, eBay, stock, etc) and see how many people registered with the s

    • 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 (Score:5, Interesting)

    by Ancient_Hacker ( 751168 ) on Monday March 13, 2006 @07:45AM (#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.

    • 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.
      • 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
        • But he missed a couple important variables.

          -75,000 (cost of building new, $250,000 home)
          +250,000 (value of new 250,000 home)
          he should have properly assessed the value at

          $142,000 (he could have halved that, because not everyone has a fleet of low price contrectors ready to put in a $300,000 home for the lowest possible cost in materials and labor)

          Because after cost of demolition and rebuilding the home, that's what it was worth to pay for the thing.

          Remember a $300 home costs a lot less to build, most of the

    • Re:Darwin in action (Score:5, Insightful)

      by acvh ( 120205 ) <geek.mscigars@com> on Monday March 13, 2006 @08:04AM (#14906387) Homepage
      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.
      • 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 (Score:4, Insightful)

        by spiritraveller ( 641174 ) on Monday March 13, 2006 @08:50AM (#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 (Score:2, Informative)

          by lost_it ( 44553 )
          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 spur

        • "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.
    • Maybe if they had looked on google earth, they would have seen the liquor store on the corner, the holes in the roof, and the thugs standing on the corner slangin. I daresay that these people's mistake was not that they used the internet to buy property, but that they didn't use the internet enough. Look up median income, crime statistics, etc. etc. Then go look at it. I mean
      even when you buy a used car, you want to take it for a drive first.
  • These speculators are no different than penny stock "investors" ... who could possibly feel sorry for them.

  • First... (Score:2, Interesting)

    by hoodofblack ( 957491 )
    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.
    • > not be so good to have a house on a busy street next to a crack house...
      their are alott of people who wouldn't mind being walking distance to any of these.
      personally I would get much more enjoyment being a block from a bar/strip joint than a church, boutique, etc (oh wait, with the exception of my current house I have never lived more than 3 blocks from a bar.)

  • Sight unseen (Score:5, Insightful)

    by Southpaw018 ( 793465 ) * on Monday March 13, 2006 @07:47AM (#14906324) Journal
    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 (Score:3, Insightful)

      by lheal ( 86013 )
      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 par

  • Too good to be true (Score:5, Insightful)

    by Opportunist ( 166417 ) on Monday March 13, 2006 @07:50AM (#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!

  • Barnum was right (Score:5, Insightful)

    by ROOK*CA ( 703602 ) * on Monday March 13, 2006 @07:51AM (#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.
    • "(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
    • 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.

  • JRGhaddar (Score:5, Funny)

    by JRGhaddar ( 448765 ) on Monday March 13, 2006 @07:54AM (#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...
  • 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.

  • Sight unseen? (Score:2, Funny)

    by erick99 ( 743982 )
    And I worry about buying a $20 item on eBay based on a description and a photo......
  • 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 (Score:3, Insightful)

      by ROOK*CA ( 703602 ) *
      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

  • 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 legisl

    • 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 rep
    • 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?"
      • 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

  • Dear Slashdotter, (Score:3, Funny)

    by archeopterix ( 594938 ) on Monday March 13, 2006 @08:34AM (#14906478) Journal
    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].

  • .. I got scammed like this (Score:3, Funny)

    by neveragain4181 ( 800519 ) on Monday March 13, 2006 @08:36AM (#14906481)
    Yeah, got hit by the unexpected shipping charges...
  • 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 (Score:3, Interesting)

    by digitaldc ( 879047 ) * on Monday March 13, 2006 @08:54AM (#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.
  • 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 sur

  • Could have been worse... (Score:3, Interesting)

    by spiritraveller ( 641174 ) on Monday March 13, 2006 @09:00AM (#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 (Score:3, Interesting)

    by ami-in-hamburg ( 917802 ) on Monday March 13, 2006 @09:02AM (#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.... (Score:2, Interesting)

    by flipper65 ( 794710 )
    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
  • 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
  • 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 aff
  • 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 the
  • 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? (Score:5, Insightful)

    by ErikZ ( 55491 ) on Monday March 13, 2006 @09:39AM (#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.

  • Use that web thingy. (Score:4, Insightful)

    by paiute ( 550198 ) on Monday March 13, 2006 @09:45AM (#14906763)
    Really, before you dropped a few thousand on a house you had never seen, wouldn't you at least

    look at it in Google Maps?
    search the local papers for stories mentioning the street, streets nearby, the neighborhood?
    call someone who lived near to it - maybe a business - and ask what they thought of the place?
    check any online information from the city/county/state - assessed values, etc?

    I know jack about real estate, and I would be doing those in the first ten minutes after the thought to invest came to me.

  • I love shopping online for many items, mostly 'data' type stuff (software, books, CDs, DVDs, etc), but I'm surprised there are people who actually make serious real estate purchases online-only. I won't even buy a pair of jeans online... Some things you just need to see/try in person!
  • ....for Dutch online real estate buyers :)

    go to www.funda.nl (the country's biggest real estate website) and search for 'konijn' (Dutch for 'rabbit') :)

  • Get a buyer's agent (Score:5, Informative)

    by HangingChad ( 677530 ) on Monday March 13, 2006 @10:17AM (#14906986) Homepage
    I can sympathize with why people don't like dealing with agents. Many of them are just trying to sell you something, they don't return phone calls half the time and sometimes you're rightly suspicious they're not telling you the whole story. But working with the worst agent in the area is better than dealing directly with the seller online. There are a whole raft of safeguards you give up without agency representation.

    But at least working with an agent in most states you have specific legal protections that are lacking in online transactions. It's a lot easier to take action in most states against a crooked agent than a crooked seller. Most times they're mandated to have E&O, the real estate agent's professional liability insurance. State oversight boards are notoriously brutal and inflexible. Real estate agents had such a bad reputation that many states laid the hammer down. As a spurned buyer your chances of getting justice from the state real estate commission or the courts are extremely high if your agent might reasonably have known about a potential problem.

    The buyer's agent normally gets their cut from the seller. 90% of the time it doesn't cost you anything to have an agent if you're a buyer. In some areas buyer's agents charge up front fees, so ask first.

    Truthfully, even if I had to pay them out of my pocket I'd still use a real estate agent for buying property, especially if it's out of town. If something is really wrong they've got a fiduciary duty to inform you about anything material to the value of the property. If they don't they're risking their license and an E&O claim against their broker. I've found the combination of internet research and a good local agent to be the best combination for my property purchases. Trust but verify what they're telling me.

    • Excellent advice, except for...

      The buyer's agent normally gets their cut from the seller.

      Run, do not walk, from anyone presenting him/herself as a buyer's agent, but being paid by the seller. By definition, the agent's interests then align with the property seller, not yours.

      The check needs to come from you, preferably as a retainer + post-close commission, rather than set-fee up front.

  • What knack? (Score:3, Funny)

    by MrNougat ( 927651 ) <ckratsch@noSPAm.gmail.com> on Monday March 13, 2006 @10:37AM (#14907160)
    From TFA: This might help explain why Greg Tanner, who says he has a knack for "turning one dollar into two dollars," is now more than $30,000 in debt.

    Sounds like it should be the other way around. He's doing great turning two dollars into one.
  • They deserve everything they get if they can't be bothered to check out what they're buying in person.

  • Island (Score:3, Insightful)

    by lazarus ( 2879 ) on Monday March 13, 2006 @12:08PM (#14908039) Journal
    I bought a 6 acre freshwater island sight-unseen on-line two years ago. Of course I did call around to make sure that the local planning office knew of the island and would give me a building permit for it. I also checked google satellite imagery to check on the overall shape and location of the island before I bought it. But I had 24 hours to do all of the research and make all of the connections before I signed on the dotted line.

    Result? In my case I couldn't be happier. It is exactly what I was hoping for (well, except for the really bad case of poison ivy I got there last summer...) Bottom line: Use *all* of the technology you have access to if you have to make a decision like that. Even antiquated ones like the telephone.

  • My Family Sold a House Online (Score:4, Interesting)

    by maggard ( 5579 ) <michael@michaelmaggard.com> on Monday March 13, 2006 @12:26PM (#14908197) Homepage Journal
    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!

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