There's already been a lot of discussion / questions about the relatively high chance of getting scammed when buying sites (especially when buying through more dodgy marketplaces, such as DigitalPoint and a few others) so I decided to post this quick how-to to help out some of you.
While the post relies on my own experience, and I'm quite happy to say that by taking the precautions I will be talking about I've never, ever been scammed myself (even though I've done a lot of buying), it's still by no means conclusive and you should always keep your guard up.
So here goes - the Top 7 Warnings Signs:
1. If it seems too good to be true then it probably is!
This is the golden rule. And it's not on top of my list by an accident.
Even though it's indeed possible to stumble upon extremely good deals, you should always bear this rule in mind and take a "too good to be true" deal as a major warning sign. By no means am I telling you to walk away from good-sounding deals - I'm simply saying that when finding an extremely good deal you should always be even more careful than with a "usual purchase" and start very closely looking for other warning signs.
2. Traffic and revenue don't seem to be in correlation.
This is the main mistake newbie-scammers (luckily, most scammers out there fall into this category) make and hence they're usually rather easy to spot.
A few examples - a site that gets 100 unique visitors per month is claiming to be making $200 per month selling a $5 product. A quick calculation would show us that in order to achieve that, the site would need to convert at 40% - meaning that out of every 10 visitors 4 would need to buy. Needless to say, this figure is extremely unrealistic, no matter how good the site is.
Another example - claimed revenue has been very stable over the last X months, however traffic has jumped a lot. This obviously indicates that something is dodgy, as generally revenue should increase together with traffic (unless the seller has tried marketing methods that have brought a lot of junk traffic).
Finally - in case of Adsense sites take a note of unrealistic CTR figures. Sure, it's indeed possible to achieve a 20% CTR in some cases, but not in most cases. For instance, if you see a site that only displays one or two ad boxes and they are both hidden in the bottom of the page (or somewhere else where they're not easy to be found), yet the site claims a 15% CTR then you should walk away from this listing pretty quickly.
3. Seller unwilling to disclose (enough) statistics.
Another very typical scenario, especially on DP and other free marketplaces.
Always try to get Google Analytics stats - and not just (fakeable) PDF proof but actual access to the seller's Google Analytics. It is extremely easy to give someone read-only access to your website stats - all it takes is logging on to GA and adding new user. And there is virtually no excuse not to do it as you won't be able to mess up anything (you will be given read-only access) and you won't be able to sell any other sites associated with this account either!
There's also many buyers who simply don't have Google Analytics installed and offer stats provided by tools such as Awstats and Webalizer. There's two things you should bear in mind when dealing with this kind of stats:
1) Since most of these tracking programs are installed on a local server (as opposed to GA which is on Google's own server) and analyse raw log files, rather than actual live visits, they are extremely easy to manipulate with. So whenever you're about to buy a site that doesn't come with GA statistics, you should do a bit more research to see if the site really is getting the kind of traffic it claims to get. Check statcounter (data is not accurate but will give you an idea), check their Alexa rank, make sure that they actually rank for their main keywords on Google etc.
2) Another cool trick is to go to the site, open the source code of it (usually right click anywhere on the site, then "View Source" will do), press CTRL+F and type in "analytics". If you then see Google Analytics tracking code then this means that the site in fact DOES have GA installed. And the seller who is trying to tell you that it doesn't is simply full of it.
4. Seller's got no reputation or even worse - bad reputation.
Sure - everybody needs to start somewhere and there are plenty of legit sellers who have no reputation at a particular marketplace, but if that's the case then it's your job to do proper background research. Find out some of their details (name, email), google them, ask them if they've got history at any other marketplace. Use your imagination
Something to be extremely careful about is obviously sellers with BAD reputation. Most marketplaces have a feedback system in place (Flippa's Feedback Score, DigitalPoint's iTrader etc.) You should always take a very good look at these scores and if anything is even remotely dodgy (even one negative comment), ask the seller to explain it.
Needless to say, if you find a seller with a lot (more than 10%) of bad feedback you should immediately walk away and not even question them about it.
5. Unprofessional listing copy.
While an unprofessional listing copy alone is not really an indication that the seller is a scammer, it's indeed a very good warning sign and you should always be more careful when dealing with sellers who seem unprofessional.
There's obviously a lot of sellers out there who are legit but come off as unprofessional, hence you shouldn't make your decision based on this fact alone, but bear in mind that 99% of scammers out there are extremely unprofessional, hardly ever speak/write good English and will by no means agree with a phone conversation with you.
6. Price too low.
Once again, this fact alone is most definitely not enough to determine that the seller is a scammer, but should be considered as an additional warning sign.
There is an exception to this, though. If the price is EXTREMELY low (let's say a site that has made $2k a month for 6 months in a row is now sold by $3k) then there's a 90% chance that the seller is a scammer. Even if they've provided reasoning (usually something idiotic-sounding, such as "I need money for another project ASAP), get them on the phone, question them, see if their facts actually hold up.
7. Seller demands payment via unsafe/dodgy channels.
And last but not least, I've made it a rule to NEVER deal with sellers who demand payment via Western Union, MoneyGram, Liberty Reserve or other similar means. For buying, I use ONLY PayPal, Escrow or direct Wire Transfer in case I have a written contract with the seller or if they transfer me a part of the site (such as the domain name) prior to payment.
The above post is not meant to discourage anybody from buying though. It's simply a few things that you need to keep in mind and if you do then chances are good that you won't ever get scammed.
Remember one thing though - you can always walk away from a deal that you're unsure about and find a better one! Sure, you may lose a day or two but how many days would you lose if you'd take the risk and get scammed out of your money?
As usual - comments/additions are more than welcome!