FP - When buying sites... (real versus 'faked' information)

[edc]

Hello all,

When purchasing a web site, how far do you go to verify traffic and income? Anything that can be transmitted electronically can be faked (web logs / stats, PayPal / Clickbank screens, etc). For high end web sites there will certainly be a lot of hands on verification, but what about relatively low end sites in the $1K - $10K range? I'd like to hear some opinions and experiences.

I guess that this can go in both directions. If you are selling a website you will certainly get a higher multiple of revenue / profits with 'better' proof.

-e-

[Bryan]

That's a pretty good question. And yes, you're absolutely right saying that almost anything (be it screenshots or videos) can be faked.

In my case, it all comes down to the impression I get from the seller during initial DD and negotiations. Typically, you can smell a scammer from miles away (especially on the phone) and in these cases I typically just back off, no matter how good the deal sounds. On the other hand, if the seller seems to be trustworthy and my initial background check on them (Google ) checks out then I normally don't sweat a whole lot about triple-verifying everything.

That said, when talking about $10k+ deals a good and accepted practice is verifying revenue proof over a teamviewer session. Even though this too can be faked (by directing proof URLs to a shadow web server running on seller's local computer, for instance), it's extremely complicated to pull it off and typically it's pretty easy to catch these guys as all you have to do is have them click around a little bit i.e. click on links that they never thought you'd ask them to click and hence haven't prepared a "shadow" copy of these.

But as I said above - the main thing in this business is to establish a certain degree of trust prior to closing a deal. More often than not, a few emails accompanied by one or two phonecalls give you a very good idea as to who you're dealing with.

[edc]

That said, when talking about $10k+ deals a good and accepted practice is verifying revenue proof over a teamviewer session. Even though this too can be faked (by directing proof URLs to a shadow web server running on seller's local computer, for instance), it's extremely complicated to pull it off and typically it's pretty easy to catch these guys as all you have to do is have them click around a little bit i.e. click on links that they never thought you'd ask them to click and hence haven't prepared a "shadow" copy of these.

Thanks for the insight, and you're right. The first think I check on these types of verifies is their hosts file, to make sure that the domain in question is not routing back locally.

-e-

[wptheme]

As Thomas mentioned, getting to know the buyer is a great way to assure yourself that you are not negotiating with a scammer. Google is the most helpful tool in this case. Besides that, you can also Google to see the background of the site. Normally if you are really good in searching, you will be able find out that several websites claiming to generate $500 income per month was sold a week ago for $50 at DP or any other webmaster forum.
Therefore you should check the website history really carefully. It just not make sense to be able to redevelop a website from a $50 budget and then claiming a big amount of revenue in a weeks time.
Besides Google, also look at the domain changes stats (domaintools.com) and popular webmaster forums using any info you can find on the seller.

UPDATE: Sharing my experience, I know this happens as I remember developing websites for a person and then in a few days I found it at Flippa claiming getting unbelievable rev etc. That is why sometimes you see people wanting to purchase high PR domain or aged domains to run these scams. Its not always that purpose but like I said most of the reason.