eBay: The Missing Manual

Hey, Big Spender

The best way to begin buying on eBay is to purchase some low-priced items to build up positive feedback and learn how auctions work. After a while, though, you might be tempted by luxe-level offerings. Before you bid on big-ticket items, there are a few things you should know, like when to use escrow (Section 2.3.1.2) and how far eBay and PayPal's buyer protection programs will (or won't) cover you (Section 2.4.4). But there's more. This section shows you what you need to do before you bid, and it offers specialized strategies for the pricey stuff, like jewelry, cars, and real estate.

If you plan to bid $15,000 or more, you need to contact eBay in advance; eBay requires big-ticket bidders to have a valid credit card number on file or separate confirmation of your identity (explained below). If you haven't registered a credit card number with eBay, you can do so from your My eBay page. (Head to the navigation bar and click My eBay to pull up your My eBay page.) Click the Personal Information link, scroll down to Financial Information, and then click Change. After you've confirmed your password, you can type in information about your credit card.

Tip

If you submitted your credit card info a while ago, make sure the card hasn't expired since then. If it has, update your information.

If you'd rather not give eBay your credit card number, you can have your personal information verified for a $5 fee. When you do so, you get a nifty icon next to your eBay ID to show that you've been verified. From the navigation bar, select Services → ID Verify → Sign Up Now. Be prepared to give your date of birth, Social Security Number, and driver's license number (if you have one; if not, select No Driver's License from the drop-down list). When you click the Continue button, you authorize eBay to check your personal credit profile.

Note

When eBay verifies your identity, you can't change your contact information (address and phone number) for 30 days. After 30 days, you can change this info—but if you do, you lose your verified status. You'll have to go through the verification process all over again if you want it back.

FREQUENTLY ASKED QUESTION: Join the Club

Where can I discuss collectibles with other collectors on eBay?

One of the joys of eBay is that you can find other people from around the world who share your interests. If your friends and family are getting a little tired of hearing about your passion for vintage lunch boxes or mermaid figurines, it's obviously time to make some new friends.

The place to look is in eBay's Collectors Clubs. In these bulletin-board-style discussion groups, you'll find both buyers and sellers in conversation about every aspect of collecting, from questions about particular items to notices of special sales to talk about favorite pieces. Groups also let members conduct polls and post photo albums.

From the navigation bar, click Community. On the eBay Community page, look under Connect for eBay Groups. Click the Groups link, and then click Collectors Clubs to discover a whole new world of fellow collecting fanatics. There are 15 top-level categories, from Antiques to Toys Hobbies & Trading Cards, each with many groups under its umbrella. Click any category to browse its groups.

When you find a group you'd like to join, click its name to open the Welcome page for that group. The Welcome page gives you a description of the group and tells you the eBay ID of the group's leader, when the group began, how many members it has, and the date of the last post. It also tells you whether the group is public (any eBayer can join) or private (to join, you must receive an invitation or email the group leader for approval).

To join, click the Join Group button. If the group is public, you're in. If it's private, a page opens with a text box that lets you explain why you'd like to join. Type your message, and then click Send Request.

If you don't see a group that interests you, you can start your own: from the navigation bar, click Community → Groups → Collectors Club → Start Group. To start a group, you have to have a feedback score of 50 or higher and have been registered for at least 90 days. For more about eBay Groups, see Section 10.1.2.

Smart Shopping for Big Spenders

No matter what big-ticket item you buy—from an antique armoire to a brand-new luxury car to a warehouse for stashing all your purchases—follow these guidelines to make sure you're going to get what you pay for:

• Always check the seller's feedback (Section 2.1) and read the item description carefully.

• Check out the seller's return policy (on the auction page). If you're spending big bucks, you should have time to inspect and authenticate the item before the transaction becomes final. Watch out for no-return policies and restocking fees; sellers sometimes charge a fee for taking a return (usually a percentage of the purchase price).

• Check the auction page to see whether escrow payments are available. If not, and you want to use an escrow service, use the "Ask seller a question" link to make sure that the seller will go with Escrow.com. Ask this before you bid. Be sure to mention Escrow.com by name to assure the seller that you're not trying to set up a fake transaction.

  Warning

  The biggest recent trend in online fraud has been fake escrow services. eBay recommends only one service in the U.S., Escrow.com, discussed on Section 2.3.1.2. See Section 4.3.5 for more on scams using fake escrow sites.

• If you're planning to bid more than $15,000, register your credit card with eBay (Section 4.2). If you neglect this step, eBay won't accept your bid.

• Check out the seller's contact information before you pay. Use the "Ask seller a question" link from the auction page (which sends an email) or, if you're in an active transaction, use Advanced Search → Find Contact Information (which gets you a phone number). If the phone is disconnected or the email you send bounces back, report the contact information as invalid (Help → Contact Us) and don't send any money.

• Shell out for insurance (Section 5.4.6.4). It's worth it to make sure you'll get your money back if the item arrives damaged or doesn't arrive at all.

• Never agree to any off-eBay transactions, and never agree to wire transfer as the form of payment. Wire transfers are untraceable and unrecoverable (see the box on Section 4.3.6). If the seller asks you to wire money or tries to close the deal off eBay, report them. (Choose Help → Contact Us → "Report problems with other eBay members" → "Problems with sellers," and then select the specific problem. Click the Continue button, and then the Email link. Type your report and click Send Email.)

• Be ready to authenticate the item—take it to a jeweler, mechanic, rare-book expert, or whoever is qualified to judge what you're buying. It's ideal, of course, if you can do this before the auction ends, but if you use an escrowservice, you can keep your payment in limbo until you've got an expert's thumbs up (or thumbs down).

Jewelry

When you go into a jewelry store, you have a chance to inspect the merchandise (check for flaws or loose settings, try on a piece to see how it looks) before you decide whether to buy. And most stores make it easy for you to return your purchase if you change your mind later on.

Things are a little different on eBay. If you're interested in buying expensive jewelry or watches on eBay, know that many reputable jewelers sell on the site. But problems do exist, including inflated weight estimates, suggestions that the item's quality is better than it actually is, and overblown or phony appraisals. Because many online jewelry sellers aren't certified gemologists, sellers may not realize that their descriptions are misleading. (Or sellers may be shady characters who know darn well what they're doing.)

Either way, the following strategies can help you sift the gems from the dirt:

• Be familiar with eBay's listing policies. eBay has established listing policies to make it easier for buyers to know what they're getting. For example, only natural (mined) diamonds meeting industry definitions can be listed in a diamond category. Man-made stones must have the word simulated or lab-created in front of the gem's name; titles must contain phrases like simulated diamond or lab-created sapphire. Cubic zirconia has its own category and must contain cubic zirconia or CZ in the title. Similarly, if an item is not solid gold, sellers must state this fact in the auction's title: gold filled, gold plated, gold electroplate, and so on. Sellers who fail to meet these guidelines risk seeing their auctions canceled.

  Even with these guidelines in place, you should read the auction description thoroughly. Sometimes a seller will "forget" to state in the auction's title that a gem is lab-created but mention this fact in small print somewhere on the auction page itself.

  If you got taken in an auction that advertised a diamond but sold you a CZ, report it to eBay. Go to Help → Security Center and report the seller for misrepresenting the item.

• Be prepared to get your own appraisal. You can find an appraiser through the American Society of Appraisers ( www.appraisers.org) or the American Gem Society (www.ags.org).

• Ask to use an escrow service. If your seller will accept payment through Escrow.com—ask before you bid—the site will hold your payment until you've had the item appraised and accepted it.

• Insist on a fair return policy. Although using an escrow service affords the best protection, many sellers don't like using them because they feel it protects the buyer but leaves them open to risk: some unscrupulous buyer might replace their genuine piece of jewelry with a fake, returning the fake and keeping both the real item and the payment. If that's the case, make sure that the seller has a return policy you can live with. Look for policies that allow enough time for you to get the item appraised after you've received it, and watch out for restocking fees.

UP TO SPEED: Certification vs. Appraisal

Some of the auction listings on eBay offer jewelry with "certified" stones and show a photo of the certificate. Others describe the jewelry as "appraised." What's the difference?

An appraisal is a jeweler's estimate of the item's retail value. Regardless of what the auction claims about appraisals, you should have your own appraisal done by a jeweler you trust to confirm that the piece is worth what you paid for it.

A certificate analyzes the specifications of a particular gem, rating what jewelers call the four c's: carats, cut, color, and clarity.

• Carats are the weight of the stone; one carat equals 200 milligrams. Larger stones are worth more because they're rarer than smaller stones.

• Cut describes the stone's shape: round, pear, marquise, oval, princess (square), and so on. A well-cut stone is symmetrical; its facets reflect light evenly to increase the stone's brilliance.

• Color involves hue (the gemstone's basic color), saturation (the color's intensity), and tone (the depth of the color). Even diamonds that appear white or clear have color ratings.

• Clarity measures the visibility of inclusions, tiny flaws or cracks within the gemstone. The lowest clarity rating is I3, in which prominent inclusions affect the stone's appearance; the highest are FL or IF (flawless or internally flawless) and VVS (for very very slightly included). The inclusions in VVS stones are difficult for a gemologist's trained eye to spot, even at 10x magnification.

Just because a gemstone has a certificate doesn't mean it's valuable. It's a good idea to scrutinize the certificate and know where it comes from. To make sure you're getting a valid report, look for these laboratories:

• Gemological Institute of America (GIA). Look for the phrase GIA Gem Trade Laboratory on the report. The GIA's Web site is www.gia.edu.

• American Gem Society (AGS). The report should state that an AGS-certified gemologist has compiled it. See www.ags.org.

• EGL USA. The company began as the U.S. branch of the European Gemological Laboratory but is now independently owned and unaffiliated with EGL labs outside of North America. You can verify EGL USA reports on its Web site: www.eglusa.com. Click Online Results, and then type the report number in the box and click Submit. (Many auctions for EGL USA certified items include the report number on the auction page. If not, you can email the seller to ask for it.)

• International Gemological Institute (IGI). This site also lets you verify its reports online. To do so, go to the IGI's Web site at www.igi-usa.com. From the home page, click English . Update & Duplicate Reports, type in the "SOA number"(which is shown on the report in the text box), and then click View Report. A window opens with a copy of the report, so you can double-check the particulars.

eBay Motors

Since its beginnings in April 2000, eBay Motors (Figure 4-4) has been the venue for more than one million car sales and is now the fastest-growing part of the entire eBay site. The Motors division is a nationwide car lot, with everything from collectible muscle cars to basic transportation to brand-new luxury vehicles. Most of the vehicles are sold by dealers, and the average price is just shy of $10,000. To check it out, head to the eBay home page and click the link for eBay Motors, or type www.motors.ebay.com into your Web browser.

Figure 4-4. eBay Motors sells more than just cars. It's the place to look for any motorized vehicle, including go-karts, snowmobiles, speedboats, RVs—even helicopters and airplanes. Be sure to stop by the "How To" Center to familiarize yourself with vehicle auctions before you bid.

You might be nervous about buying a car sight unseen over the Internet. And you'd be right. If you can't kick the tires and look under the hood yourself, how do you know what you're getting?

The first thing to do when you're considering buying a car on eBay is to learn as much as you can about the vehicle. Besides reading the description carefully, something you'd do for any auction, you can check the vehicle's history (Section 4.2.3.1) and order a professional inspection (Section 4.2.3.1). These options cost money, but if you're seriously thinking about buying a car from a stranger in another state, spending a little money before you buy can save you lots of money later.

Tip

To find car auctions close enough to home that you can look at the car before you bid, click Advanced Search on eBay's home page (not the eBay Motors home page, which has a minimum range of 500 miles). Type in the model you want, select eBay Motors as the category, and then scroll down the page to the "Show only" section. Check the box next to "Items within," then select the number of miles you want and type in your Zip code. The results are within the distance you specified.

Run a vehicle history report

A vehicle history report lets you know whether there are any known problems with the car's title, odometer, service record, and more. For example, if the car has been reported stolen or an insurer has declared it a write-off after an accident, a vehicle history will reveal those things.

To run a vehicle history report, head to the auction page of the car you're looking at, and then click the VIN (vehicle identification number). Doing so takes you to AutoCheck (owned by Experian, the credit-reporting company), where you can buy a vehicle history report. (Sellers who offer cars built after 1981 must include the car's unique VIN in the item description; cars built before 1981 don't have a VIN.)

Tip

AutoCheck reports are $7.99 apiece, but if you order several at the same time, you can get up to 10 for $14.99. Helpful if you know you're going to buy a car but are undecided among several choices.

Get an inspection

A physical inspection of the car you're considering can go a long way toward making you feel comfortable that a seller's description is, in fact, accurate.

At your request, SGS Automotive Services (recommended by eBay) will send a technician to do a 150-item check, including interior and exterior photos, of a car you're thinking about buying. Most inspections cost just under $100, and SGS also inspects motorcycles.

Note

An alternative inspection service, CarChex (www.carchex.com), offers a 55-point inspection for $79.95.

Know what it's worth

If you were considering buying a car from Ed's Used Cars down the street, you'd look up the going rate in Kelley's Blue Book (www.kbb.com). Do the same when you're buying through eBay Motors.

Other industry-standard resources include NADA guides (www.nadaguides.com) and Edmunds (www.edmunds.com). These sites let you customize your search beyond year, make, and model: you can include factors like mileage, optional equipment, condition, and even the vehicle's Zip code to fine-tune the price you should be paying.

Calculate all costs

In your rush to get a good deal on a hot car, don't forget the costs that go beyond the purchase price. After you buy a car, you still have to deal with your state's tax, title, and registration costs. Also, check to see whether the seller charges any additional fees beyond the purchase price. If the vehicle is in another state, for example, you'll need to factor in the cost of getting it to you (or you to it).

Tip

If you want the car delivered to you, www.movecars.com is an Internet directory of auto transport companies that can help you find the best rate.

Arrange financing

It's fun to bid on cars, but after you've played, you've got to pay. If you need financing, you can get it through eBay's financing center (http://financing-center.ebay.com) before or after you commit to buy. Rates and lenders vary. In most cases, you can get your application reviewed in less than a minute.

(Of course, you can also arrange financing with your local bank or credit union—if you can do it fast. Most sellers want full payment within a week of the auction's close.)

Watch out for scams

Because car sales typically involve thousands of dollars per transaction, eBay Motors attracts scammers like swarms of geeks to a Star Wars premiere. Section 4.3 reveals a number of general scams, but there are a couple you should be aware of that are common on eBay Motors.

If you bid on a car, motorcycle, ATV, boat, or other vehicle, be particularly careful about Second Chance Offers. A Second Chance Offer (SCO) sometimes happens when a buyer backs out of a sale, or when a reserve auction (Section 1.4.2) ends without meeting its reserve. In those cases, the seller can either relist the item or offer it to another bidder for the highest price that person bid. (Usually Second Chance Offers go to the second-highest bidder, but they can go to anyone who participated.) Read more about fake SCOs, how to spot them, and how to detect them on Section 4.3.6.

Warning

Never accept a Second Chance Offer that comes in an email with "Question from eBay Member" as its subject line. How do scammers get your email address? Sometimes they just guess. If your eBay ID is joesmith989, they'll try [e-mail], [e-mail], [e-mail], and so on. But if you're selling something on eBay, the scammer will use the "Ask seller a question" link in one of your auctions to send you the bogus offer.

Another common scam abuses preapproved bidder lists. The scammer sets up a legitimate-looking auction for, say, a brand-new Mini Cooper, but only preapproved bidders can participate. You email the seller to see if you can get on the list, and the seller comes back with an offer to sell you the Mini for a few thousand bucks. All you have to do is wire the money…. Huh? Doesn't the seller want to see how high the bidding will get? Don't be fooled. Every would-be buyer who asks to be on the list gets the same offer you did—because there is no Mini. (And after reading the box on Section 4.3.6, you'll know it's always a bad idea to pay for an auction with a wire transfer.)

Tip

If you have any questions about buying on eBay Motors—or if an auction looks fishy to you—click the Live Help link at the top of any eBay Motors auction page to chat with an eBay Motors specialist.

Real Estate

Listing real estate on eBay lets sellers reach an international audience of over 50 million potential buyers, and more than 2,000 properties sell via eBay every month. But real estate transactions are complex, and before you bid you should make sure you know what you're getting into.

Although eBay says that its real estate auctions are divided into "binding" and "nonbinding" auctions, no real estate auction conducted on eBay is in fact legally binding, thanks to a plethora of state laws and the complexity of real estate transactions. Here's what the terms actually mean:

• Nonbinding. A nonbinding real estate auction is basically an ad. The price listed is the seller's asking price, and there's no Place Bid button or bid history. Instead, there's a form at the bottom of the auction page, shown in Figure 4-5, where you can type in your contact info and any questions you might have. Contacting the seller is not the same as making a bid; potential buyers who fill out the contact form don't have any obligation to follow through. It's like calling a realtor about an ad in the paper.

• Binding. A so-called binding auction for real estate looks just like a regular eBay auction. In these auctions, you're not supposed to bid unless you intend to follow through with the transaction. But because there's so much involved in completing a real estate sale (everything from a property inspection to a title search to obtaining a mortgage) and because laws governing real estate sales vary widely from one state to another, there's no legal obligation to complete the sale. What "following through" means is continuing in good faith. In other words, if you win a real estate auction, you're promising to take the next steps in the transaction. But if the house doesn't measure up to its description or if your mortgage application doesn't come through, you're not obliged to buy.

Note

Buyers and sellers can leave feedback on a binding real estate auction, just like on any other eBay auction. There's no feedback involved in the nonbinding real estate listings advertised on eBay.

Before you place a bid in a real estate auction, take all the steps you would in any other auction. Check out the seller's feedback (given as well as received). Read the auction description carefully, watching for hidden costs. For example, some auctions include a processing fee or closing costs beyond those you pay the bank. In other auctions, you're bidding not on the actual sale price, but a down payment on a much higher price.

Figure 4-5. To learn more about a piece of property advertised on eBay, fill out this form. All that's required is your name, email address, and agreement to eBay's terms, but you can also ask questions and provide your phone number and a time to call. The seller can use the information you supply only in relation to this transaction; any other use of your information, if you report it, can get a seller kicked off eBay.

Tip

In the Item Specifics section of the item description, look for a Neighborhood Profile. Click the link to get statistics and demographics about the property's neighborhood, based on Zip code. You can learn about average income, population, and crime rates for the area. All sellers have an opportunity to include a Neighborhood Profile when creating a real estate auction, so if there's not a Neighborhood Profile, you should wonder what the seller is trying to hide—a high crime rate? A depressed area where you're unlikely to find tenants? Know what you're getting into before you bid.

Other issues to investigate when buying real estate through eBay include the following:

• Is the title clear? Can you buy title insurance?

• Are taxes up to date?

• Is the property inhabitable as is, or does it need significant renovation?

• Are there any easements or restrictions on the property?

• What type of deed comes with the property? Make sure you're getting a warranty deed, which guarantees the title comes to you free and clear.

• What are prices of comparable properties in the same area? (You can look up current listings on www.realtor.com to get an idea of prices.)

• Will you have time to apply for a mortgage after the auction ends, or should you arrange financing immediately? Will the seller consider owner financing, which means that the seller carries all or part of the mortgage?

• Can you have the property inspected before the auction ends? Even if you can't travel to inspect the property in person, you can pay a professional inspector to look at a property you're seriously interested in. Find a licensed home inspector anywhere in the U.S. at www.inspectorsguide.com, or call a local real estate agent for recommendations.