Buyer Beware, Indeed!
In a recent story, I noted that Craigslist is being sued to comply with the same Federal Fair Housing regulations that apply to newspaper classified ads.
According to a recent front page New York Times article, real estate transactions in which buyers have never seen the property have become increasingly common on the Internet, particularly on eBay.
It should come as no surprise that a great many of these sales are fraudulent. Any buyer of a house or land who does not at least view the property prior to buying it is an idiot (it is hard to put it any more kindly). That there are buyers foolish enough to proceed in this fashion is, in fact, a symptom of an overheated market in real estate (even with the slight cooling down in the housing market this year, things are still a bit frothy).
That said, these cases of outright fraud raise issues similar to the Craigslist lawsuit. eBay, and others, simply cannot go on abdicating responsibility for online transactions consummated on their sites. Ultimately, there will be a backlash.
If you stick to rummage sale items, it's reasonable to assume the same level of responsibility that you would find at a yard sale: once you walk away with your purchase there is no recourse.
But real estate is not a dusty tchotchke from your parent's attic. High ticket items lead to real damage, and to legal recourse.
Furthermore, most jurisdictions provide fairly thorough legal protections for buyers in real estate transactions in the off-line world. Both from a moral and a legal viewpoint, eBay will have to find a way to incorporate these protections into its workflow when real estate is involved—or surrender this potential portion of the online transactions market to the fraudsters.
Posted by Harold Davis at March 13, 2006 9:23 AM
