Close a Deal By Suggesting Financing Options | DomainInvesting.com
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Close a Deal By Suggesting Financing Options

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I was negotiating a domain sale with an end user buyer a couple of weeks ago, and when it came time to discuss payment, he mentioned a potential hardship in paying the full amount at one time. I didn’t want to lose this sale, so I mentioned that there are financing alternatives since banks don’t generally lend to purchase domain names.

In order to close the deal, I arranged an introduction to Domain Capital, and fortunately, the buyer and Domain Capital were able to come to terms, and the deal closed yesterday. When I think of Domain Capital, I generally think of domain investors and others with domain industry connections who use the company as a means of financing an acquisition or getting liquidity for domain names they own. I am glad I thought of them when I was dealing with this end user buyer.

Of course, there are other financing alternatives to consider (a couple of which I considered), although two of these are not really “financing” per se. You might consider these options when closing a deal with an end user, even if it’s not mentioned. I would imagine some people wouldn’t discuss a payment hardship, so unless you suggest the financing options, they might balk at paying your asking price.

Here are a few domain financing options:

  • Domain Capital – I mentioned it above.
  • Self financing – Offer the buyer the option to pay with a payment plan and keep the name until payment is made in full. It’s the least expensive option but it can get hairy if something goes wrong. Be sure to have a solid contract with the buyer and don’t risk this on a valuable name.
  • Escrow.com payment plan – It’s not cheap, but it may make a buyer more comfortable to have the name held in escrow while payments are made. You can also step away from the transaction and let them collect your payment on your behalf. Escrow.com offers this on deals valued at $75,000 or higher.
  • Attorney escrow – Work with an attorney like John Berryhill (who I know offers this on some transactions). You can work out the legal agreement and his firm will hold the domain name in escrow while payments are being made.

About The Author: Elliot Silver is an Internet entrepreneur, and he is the publisher of DomainInvesting.com, a website that shares domain investing news, insight, and strategy. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (10)

    Guy

    What name did you sell

    May 9th, 2012 at 12:32 pm

      Elliot Silver

      @ Guy

      Sorry, but it isn’t a name I mentioned before, and it was a private sale.

      May 9th, 2012 at 12:48 pm

    chriswoodward

    Elliot have you ever leased out a domain or considered doing so?

    May 9th, 2012 at 12:58 pm

      Elliot Silver

      @ Chris

      Considered, yes, but haven’t actually done it. I have one self-financed deal at the moment (three payments for a name).

      @ Edwin

      Yes that is true. It’s fairly expensive though if the deal is only in the $25-40k range.

      May 9th, 2012 at 1:01 pm

    Edwin Hayward

    Escrow.com will apparently work with sub-$75,000 names as well, but they will assess their commission at the $75,000 level. Even so, it could still be worth considering for certain deals based on the strength of their reputation (ie if it lets you close a deal you ortherwise wouldn’t get)

    May 9th, 2012 at 12:59 pm

    Mike

    I think domain capital it’s even more expensive than escrow for what I know.

    May 9th, 2012 at 2:22 pm

    Elliot Silver

    @ Mike

    Possibly, but terms are different. Domain Capital is actually lending money so the seller gets paid right away. With Escrow.com, it’s a payment plan.

    May 9th, 2012 at 2:25 pm

    John

    I’ve used Moniker.com’s escrow payment service before and had no issues. I sold a name of which the buyer was willing to pay 3 months payments. It cost the buyer $99 to set that up. The buyer was able to use the name right away while Moniker held the name and I got paid immediately after each payment.

    May 9th, 2012 at 3:26 pm

    Francois

    FYI: ECOP.com secures for 1 year now seller financing deals from $1K. The escrow cost is 3%.

    May 10th, 2012 at 4:04 am

    Adam Melling

    I’ve done a coupe deals with Zenscrow.com that worked out pretty good as well. I’d recommend checking them out.

    May 11th, 2012 at 8:41 am

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