Archive for March 11th, 2006

Online Real Estate

If you buy real estate online from a stranger without ever seeing it, you are more than inviting peril. You are an idiot. Yet that is exactly what is going on daily on sites that include eBay, and, not surprisingly, people are getting cheated.  Typically, stupid slobs are buying overpriced garbage in areas of urban blight from opportunistic cheaters who are flipping them over. There appears to be little recourse, even in cases of blatant misrepresentation.

Sam Hoyt, a Democratic state assemblyman and co-chairman of the Buffalo mayor’s task force on real estate flipping, whose aim is to educate consumers on the destructive effects of the practice, blames eBay, saying it enables dishonest flippers to lure buyers.

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."

Representatives of eBay say the company has few legal obligations to buyers of real estate on the site. "The people responsible for house flipping," an eBay spokesman, Hani Durzy, said, "are the people selling these houses and the people buying them sight unseen. How these sellers and buyers are connecting is not as important as the fact that the buyers are not doing the proper due diligence when buying a property."

(Although eBay holds real estate licenses in many states, it does not act as a real estate agent and does not charge a commission. Instead, it charges a flat listing fee of $100 to $300 for residential property, depending on the duration and the type of listing.)

The rate of commission should have nothing to do with it. It is my view that eBay is in reality defacto brokering real estate-they are offering property for sale and are compensated for it. They are more than just the classified section of a newspaper. That they have so little liability simply because they are unlicensed is something that the New York Department of State and other licensing authorities should investigate.

I am a big proponent of caveat emptor. However, it is clear to me that eBay has the ability to do something that is pro-consumer and yet they don’t, which further solidifies my low opinion of the service. It is not that I don’t believe that idiots need to be protected from themselves; these people deserve what they got for being so dumb. It is simply that governments cannot have such a blatant double standard about regulating entities that sell property simply because some charge a larger fee than others.


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