Buying Domain Names Privately
I was just asked about how I buy domain names privately, and instead of replying to a comment/email, I thought I would make a post out of it, since the question has been asked before. The question I received was: “just curious if you could provide some detail on your process of buying a name privately. I am not seeking specifics like prices you paid, etc. But more general stuff like, do you use an attorney to write up a sales contract and liability release, do you use escrow, etc.“
When I purchase in private, I only use an attorney if the deal is more complicated than normal, if I am working with a seller who is unfamiliar with domain sales, or if the seller requests it. I had an attorney draft a sales agreement template several months ago, and I generally use that – making changes as necessary. Since most of my purchases are unsolicited offers by me, I am more comfortable moving forward with a deal than if someone contacted me out of the blue to sell me a domain name.
I am vigilant about doing a domain history search (using Domaintools) to make sure everything lines up. I want to make sure the seller has the right to sell the domain name. I also trust my gut – if something doesn’t seem right, I don’t do the deal. If I see a great name that is too cheap, I will typically stay away unless I am confident that things are legit. A few things that I look out for in the history check are that the email address didn’t recently change, the contact email isn’t that of the developer who might be managing the name but doesn’t have the right to sell it, the name wasn’t involved in a dispute, and anything that looks suspicious.
50% of the time I will use an escrow service like escrow.com or Moniker. Escrow.com is more widely known outside of the domain industry, so I will use them if I am dealing with someone who isn’t a domain investor. I don’t want someone to get confused about using a domain service they might not trust. That almost happened once, so after I close a deal, I do my best to make things as simple as possible.
The other 50% of my deals are done using wire transfers or payment via Paypal. These are done exclusively with people/companies I know and trust, or if the value is less than it’s worth to use an escrow service – going on gut instinct again. I also use my AmEx when I pay via Paypal, so if something does go wrong, I am fairly confident that I will be covered. It’s important to know the person who you are dealing with when sending a wire, as your options for financial recovery may be more limited.
The most important thing is going with your gut. If something doesn’t seem right, you are probably right. If you aren’t 100% comfortable going at it alone, you should invest in an attorney to assist you. I know a few who are familiar with the industry, and I’d be happy to make a recommendation if you’d like. There seem to be new scams popping up every day in the domain industry, so it’s important to learn what to look out for and avoid the pitfalls.
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