Small town lots in state sold over Internet sites

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LANGDON - Cavalier County is among several North Dakota counties where land has been snatched up by online bidders. County officials worry that buyers don't know what they're getting.

Since 2003, a company called Finance All LLC, of Tehachapi, Calif., has auctioned off lots in small towns across North Dakota via Web auction sites such as eBay, bid4assets.com and governmentauction.com.

A search of property records in all 53 North Dakota counties by the Forum found Finance All has sold more than 130 pieces of land in Bottineau County, more than 80 pieces in Cavalier County, two in Griggs County, six in Pembina County, eight in Ramsey County, four in Ward County and one in Williams County. One lot in the Walsh County town of Fairdale was sold to a man from Upton, England.

Neil Romfo, a Cavalier County commissioner from Hannah, said the sales to distant buyers raise questions.

"Somebody could get took," he said.

Paul Amato, who operates Finance All LLC with CEO Paul Sabesky, said the company stands behind the land it sells in eight states. North Dakota accounts for a small fraction of the sales, he said.

"We have a lot of satisfied customers," Amato said.

During the past two years, online bidders from Virginia, Georgia and California have bought four lots in Calvin, a Cavalier County town of 26 people. A fifth lot, covered in long grass and twisted trees, was up for auction on eBay in January. The bidding escalated to $400 with 33 hours left, but the lot didn't sell. Finance All still owns it.

Almost all of the North Dakota lots auctioned by Finance All were sold to the company by Lester L. Larson, a private real estate investor from Sioux Falls, S.D.

Larson buys much of the land at county tax auctions. The land he sells to Finance All is conveyed through quit claim deeds. Under North Dakota law, he doesn't have to list the sale price on the deed.

Larson, 68, said he and his wife, Jean, have bought and sold land in North Dakota and South Dakota for 40 years, and their only income is profit from the land sales. He denies misrepresenting the property.

"Some will say: 'Well, you took pictures of the good side of the house.' Well, what am I gonna do, take pictures of the bad side? It's their responsibility to go look it up like I do," he said. Most of his customers are happy with their purchases, he said.

Paul Taylor and his family arrived from Vermont about a decade ago at the home they bought from Larson in Calvin. They found no one had lived in the house for 20 years.

"He (Larson) said there was water on the property," Taylor said. "Well, there was definitely water - 3 inches from the bottom of the upstairs floor."

Larson said the ads clearly state "sold as is."

"There's no guarantee on the condition," he said.

Taylor, who now lives in Horace, said Larson eventually agreed to refund $1,000 of the $3,700 paid for the property.

"We took the other $2,700 as a loss for being ignorant, for not checking it out before we bought it," Taylor said.

Some critics of governmentauction.com say the Web site has a deceiving name and uses misleading marketing practices.

"That's the first thing you're thinking: It's the government," said Anthony Hill, a former customer from Georgia who bought land in Alsen. "That's the sell right there. The government always backs what they sell."

The Web site's home page states, "We work closely with various government agencies to acquire literally thousands of properties."

The fact that it's a private company is revealed on the "About Us" and "Questions & Answers" pages.

"We invented the name governmentauction.com based on the fact that we purchased land from different government agencies and we have been in the business for more than 20 years buying land from County and States agencies," the site says.

Others have criticized governmentauction.com for not picturing the actual land for sale. Instead, the Web site often posts photos of nearby lots, larger cities in the area and North Dakota's prime tourist attractions.

Amato said it's difficult to post photos of every piece of property because of the large number of pieces sold on governmentauction.com and the company's other Web site, usalandauction.com.

"We don't take pictures of the exact lot because if you're not standing on the corner taking the exact picture, you're going to have unhappy customers, too," he said.

Hill, who owns a commercial and residential construction business in Lawrenceville, Ga., said he purchased several parcels from governmentauction.com in October. He said he has yet to see his lot in Alsen, in western Cavalier County.

"I'm afraid to go out there," he said.

Susan Grant, director of the National Fraud Information Center, advises people who buy land to check it out. Amato also encourages prospectors to do their homework.

"We've had customers buy property in Hawaii and three months later say, 'I didn't realize there were volcanoes there,'" he said.

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