No escrow?

Pendejo,

I work in real estate, and I asked the same question (to myself) about the use of escrow when I first thought about buying on Audiogon. Escrow protects both parties in the purchase and sale of real property, so why not audio equipment? However, before making my first purchase, I did a lot of reading of the forums, not only about equipment but also buying and selling. I learned that escrow could be a problem for both buyers and sellers. Buyers have been burned by outright scams, phony escrow companies that the seller requested be used. The transaction ended for the buyer when he sent his money to the “escrow company.” Sellers could also be victimized by being instructed by a phony escrow company to ship the equipment because the buyer had deposited its money with the non-existent company. Sellers also have to be sure that legitimate escrow companies don't instruct the seller to ship until the buyer's funds have cleared. Some escrow companies and sellers have been scammed by phony bank checks.

Even if sellers didn’t lose their equipment, sometimes buyers used escrow to audition equipment and then refuse it when it didn’t meet their expectations, simply by informing escrow that there was some damage or operational problem. As no doubt you are aware, not being satisfied with the sound is not a legitimate reason for a buyer terminating his purchase. The seller got his equipment back, but not only had to pay for a new ad on Audiogon and start the sales process all over again, he also was out his shipping costs because all the buyer's money was returned. For this reason, even a seller who would agree to an escrow might require the buyer to pay the shipping cost up front to the seller directly.

If you want more analytic reasons why escrow doesn’t work as well for audio equipment as for real estate, consider the following differences.

1. Real estate escrow companies are usually recommended by a realtor, who knows the escrow companies and whose license is at risk if it suggests a scam outfit. In addition, the parties go to the escrow company’s office to sign documents, which eliminates escrow companies that are nothing more than an internet address.

2. In a real estate purchase, the buyer examines the property before making an offer. After escrow is opened, the buyer has a short period of time to make have the property professionally inspected, at which times all issues about physical condition are resolved or the deal terminates. The buyer is entitled to a re-inspection just prior to the closing, but damage must be substantial to allow termination of the deal, and the seller (or its agent) can fairly easily verify or refute damage claims by their own examination. With audio equipment, the buyer doesn't examine the property until escrow has been opened and the equipment shipped to the buyer. The physical condition of the equipment is the last issue to be resolved and is difficult to do because the parties can’t jointly examine the equipment.

3. In the sale of real estate, the buyer does not get possession of the property until the deal closes and the seller has been paid. In the personal property escrow, the equipment is delivered to the buyer after the money is deposited in escrow but before it is released to the seller. This difference doesn’t matter much, if the sale goes through. However, there is a difference if there is a dispute. A stalemate will exist in an escrow for both real property and personal property, with the buyer unable to get its money back and the seller unable to re-sell the property. However, in the case of personal property. the buyer is in possession of the property, which makes the seller much less secure.

4. Yes, audio equipment often involves thousands of dollars. However, it is a fraction of the sales price of most houses in this country, even after the bubble collapse, not to mention commercial properties. In a real estate escrow, each party's escrow fee (not to be confused with title charges, transfer taxes, recording fees and other closing costs) is usually less than .3% of the purchase price. A comparable escrow fee for a $10,000 piece of audio equipment would be $30 per party, which is non-existent.

The bottom line is that escrow companies involve extra cost and delay and can’t solve the major problem of parties dealing at a distance in the sale of audio equipment, which is issues involving the physical condition of the property.

In the case of really expensive equipment (and everyone’s definition is different), you might want to go to the seller to check out the equipment and take delivery. I also suggest you read lots of ads for the type of equipment you're interested and notice the different styles in which they are written. Some are bare bones and some are very informative, but many also convey a certain tone. Does the seller sound argumentative or helpful, dictatorial or flexible, abrupt or easy going? It's not an infallible guide, but it helps.

Real estate and stereo deals have about as much in common as buying groceries and buying a car.It started about 15-20 years ago when the majority of people growing up spent most of their early years in front of a screen,be it computer or TV instead of in front of people learning interpersonal relationships.So when they leave their screens to interact their unsure,scared,unknowing of basic codes of how to deal with many situations involving people and buying and selling procedures.Their 25 going on 15.Join the club here.It will only cost you a little faith,YMMV,Bob

Thanks for all the feedback. Seems that most folks here have found ways to give them some reasonable level of assurance, though it appears it's either the buyer or the seller who's without a real safety net. Still puzzled as to why an escrow process isn't more established that has guarantees for both. Works for real estate.

Excellent advice from those above..I use paypal with my credit card. The credit card company will go to bat for you if need be. And paypal can at least provide tracking information. At least to some degree. Check feedback from buyer or seller on this website and others that they may be a part of. For a major purchase if you are still concerned, then wait for an item you would want, they is being sold/purchased, that is in driving distance. You save on the shipping, and perhaps even meet a fellow audio nut.

I always check how long the other party has been a member of AudioGon, check their feedback, and whether they have been active in any threads. This will give you a good idea of the other parties intent and integrity. If you are a new member, someone will need to take a gamble on you. Even if you are honest and have impeccable integrity, I would trust a longtime member with perfect feedback before dealing with you, not to say I wouldn't. I would always want to talk with a person with little or no feedback to establish a comfort zone or break off a deal.

You might want to try a few small transactions and get a feel for how things work. I have never had a bad transaction on this site.

Lots of pendejos make transactions on this site using paypal. You have some, SOME, protection. Like the other pendejos said above, check feedback, get a phone # and call the seller, get a feeling for the pendejos you are dealing with.
Escrow has been known to be full of scams, a bunch of pendejos around the world posing as escrow, taking your $. So why bother.
It may seem like an ocksee moron, but my advise is: be a smart pendejo.
Con Safos.

Use a credit card. If you do not receive the item, do a charge back, or use paypal. Money order can be cashed, and you may not receive the item. If seller refuses CC or paypal, look elsewhere, there is always something else at the same price or better.

I have completed something like 5 transactions (all purchases) in excess of $3,000.00 through Audiogon.

No complaints.

I do study feedback and I once even checked member's discussion forum threads, just to get some reassurance.

I don't think it was just dumb luck as most people hereabouts seem satisfied.

Thanks for the response.

I have paypal which is fine for small transactions of maybe a few hundred dollars. For larger sums though, using paypal seems dangerously gullible. I've been burned myself so know from experience, paypal will do close to nothing if a transaction goes bad. What happens if nothing is delivered? The seller perhaps gets a slap on the wrist from audiogon and has his account suspended. What do I get?

There are some great deals here and I'd love to be able to use this site. I can understand that escrow might be too slow for some sellers, but the reasons I've been given so far by sellers is that they don't trust it, but then, as a buyer, I am expected to either send a money order or use paypal and thus take on a huge risk. I did see some comment here on another thread to always use a credit card with paypal, so maybe that offers some level of protection for the buyer, via the credit card company?

Look at the sellers rating. If he/she has a high rating you should be ok.

Personally, I don't ship until I have been paid and I have always been ok to pay upfront. In many years of dealing on Audiogon I have not had any big issues ... yet.

Regards
Paul

I've used escrow as a seller. It works but does slow the transaction process which turns many sellers to use it. If the amount is substantial and a buyer wants it I will do it but prefer not to.

Many of the members here use Paypal.

Since you might not have a paypal account and if you see something that you are interested in buying, offer to pay with a money order.

Yes if they make some kind of contact and are comfortable.I have 12 times which means 12 other people did it too.There are thousands others......the bloodstained bandits are quite rare here.I was hesitant at first and now its casual.Refreshing really.As usual YMMV,Bob