I purchased a webisite from a stranger via buydomains.com. They even helped us with some PR and SEO, whitch was not, of course, a part of our business plan. So I got more value than expected.
Here are a couple of ways to protect yourself as a seller: 1. Use Escrow.com. Basically Escrow accepts the buyers money into trust, then pays it out to the seller once the website and domain name have been transferred. 2. If you use PayPal, make sure you backup the website your selling onto a CD and post it to the buyer. This way you have proof that you shipped the goods and it makes it harder for the buyer to do a charge-back on PayPal.
A good way to be assured that this is a legitimate transaction is to meet the person in real life and discuss it with them.
Flippa ensures security for both parties. I use them a lot when selling my sites. The only problem i face with them is selling niche sites with possible trademark issues as flippa automatically disallows their sales.
Online reputation counts for a lot - could be faked, but takes time. If the seller isn't on Skype, Facebook, Twitter, or LinkedIn it's a pretty good signal to be extra careful. Require real name, phone, mailing address, and THEN, once they've given it, a photo/scan/fax of govt ID like driver's license/passport. This will probably get rid of a good chunk of the fraudsters. As xorshells said, meet in person if you can. Check the WhoIs listing, of course.