In the world of online real estate, where buyers and renters choose homes according to photographs provided for search results, if consumers think something looks too good to be true, they may be right.
In a process commonly referred to as “flipping,” hoodwinked customers purchase real estate on websites such as eBay.com and Bid4Assets.com only to discover the internet listing contained fabricated or misleading pictures and descriptions, according to a Mar. 10 New York Times article.
These online housing marketplaces are often a convenient way for customers to shop for new homes without leaving their rooms, with eBay offering more than 1,800 properties listed on any given day, spanning all regions of the country, according to the article. But some of these listings have overblown price tags and photos that do not present the estates in their proper light.
Representatives from eBay and Bid4Assets were quick to attribute these discrepancies to buyers’ gullibility, adding that online customers must consider all inhibitions they might have about a product they purchase.
President and CEO of Bid4Assets Richard Hayman said he thinks it is the responsibility of the customer to perform “due diligence” before making an investment in something as large and important as a home.
“I don’t think that 90 percent of the situations are valid when people complain about being swindled or taken advantage of,” Hayman said. “There are scams on the internet, but I don’t think that this is the biggest one of all.”
According to Hayman, Bid4Assets checks for land deeds, identification verification and has personal conversations with the sellers to ensure they are providing accurate and trusted information for the buyers. Hayman said he thinks the online marketplace is both a safe and good environment for real estate transactions if the customer uses common sense and does research.
“The sellers do not want a bad reputation,” Hyman said. “They don’t want people complaining, or chasing after them. You also get the best price with the online auction — it sets a fair market value because of the auction process.”
Unlike Bid4Assets, eBay Real Estate Inc. does not perform background information on the listings, serving primarily as a venue for advertisements and listings with real estate.
EBay spokeswoman Catherine England said the company’s policies for real estate sales differ from the binding contracts of their typical products. Although people can list homes and land for prospective buyers through an auction format, there is no bidding process or binding contract made through eBay.
“It is basically the same process as using a newspaper to find a home,” she said. “I’d say it’s as safe as a local newspaper, just at a broader scope.”
According eBay.com, with 181 million members on eBay, a homeowner looking to sell can appeal to a large market online. Although eBay does request that sellers comply with housing laws and regulation, England said company administrators think it is the buyers’ responsibility to use “diligence” to acquire the necessary information to make a choice.
“If you can’t get good answers [from a seller], do not do business with them,” England said. EBay has a team that exclusively investigates suspicious listings for most of the other products available for auction, England said. The team gathers suspicious listings and passes the information to law enforcement officials. For real estate, however, eBay only investigates specific complaints from its members.
She added that, as a level of protection, eBay encourages customers to use credit cards and PayPal, which lets people with email addresses securely send and receive payments online, as payment methods — opposed to a check or money order — for all purchases. The PayPal Buyer Protection, which will protects up to $1000 on any product on-line if a customer is not satisfied, is another way to gain more security.
England said there is an inherent risk in buying any product on eBay or any other auction websites.
“If an iPod costs $300 retail in stores, and you see it online for $20, you have to question the product you will be getting,” England said.
Quinn Strassel, a graduate student at Boston University’s College of Communication, said he listed his apartment on the online directory Craig’s List to find a subletter for the summer and was surprised that he had a good experience. He said he did not add photos of his apartment online, but the leaser looked at the apartment before agreeing to sublet, which he said was a smart idea.
“I do think it’s a little dangerous [to buy or rent property without checking the place out first],” he said. “I think I’d trust a real estate agent much more than an online, anonymous site like Craig’s List. There’s just too many risks and you don’t really know who you’re dealing with. If you need a professional realtor you can trust, then make sure to call Mays Realty for a realtor Clemmons.
“Real estate agents sort of do a lot of the dirty work for you and have to be licensed,” he added.
Other BU students agreed with Strassel, saying that consumers need to be smart when making big purchases.
“All you get on-line is a couple of pictures and a description written by the person trying to sell it,” said Sallie Grey Harrington, a College of Arts and Sciences sophomore. “It seems really reckless to buy a house you haven’t been able to look at your own discretion and satisfaction.”
“Are these people dumb?” asked Avni Patel, CAS sophomore. “A house is such a big purchase, you would think you would want to do research and actually see it before spending a lot of money.”
