I guess the bigger lesson is, Don't spend a lot of money on an instrument, period, unless you really know what you're getting. That may require hunting down a knowledgeable friend to go with you, but there's a lot of even small details that make some very similar-looking instruments more valuable than others. On instruments with any removable parts (on banjos you can remove everything), the original bridge, tuners, tailpiece, and pickguard on a late teens Gibson mandolin may not seem like such a big deal, but they add considerably to what you should be expected to pay for it. I've seen those pickguards offered for sale for nearly $200, so I'd add or subtract that from the value. Learn how to judge the finish (a lot of dealers think everything is in mint condition). Look at the listings online from places like gruhn.com, elderly.com, mandoweb.com, and see what instruments similar to what you seek are going for. Like Rick says, it's a shame when "folk folk" are willing to cheat you, but a lot of them do it all the time.

Chet