When you buy links in SEO you run the risk of getting a penalty. But what is a paid link exactly. In this video, Matt Cutts spends 7:41 seconds telling us just that. He goes on and on about what actually constitutes paying for links. Long story short, if you give someone something of great value, that is pretty much a paid link. If you give them beer or buy them a pizza, it might not be a paid link.
I would say this, from my own perspective. Try to build relationships and earn links. Stay away from paying websites or giving extravagant gifts.
Watch this video on paid links and SEO below.