Domain Auctions Should Hold Domain Names in Escrow
Earlier this year, I won an auction at Sedo’s Great Domains. Immediately after I received the email confirming my auction win, I sent payment to Sedo. Unfortunately, the domain name was never transferred, the transaction was cancelled, and my payment was refunded.
I’ve heard many stories about deals not being completed after auctions conclude, and it happens at all auction houses. Although buyers may have legal recourse, that option is generally expensive, time consuming, and it’s not usually worth the effort to complete the deal.
I believe there is something that domain auctioneers can do that would mitigate this issue.
If the auction house takes possession of the domain name prior to the auction, the domain owner would not have the ability to back out of the deal. Since the owner has already committed to completing the deal, the only issue post auction is the follow through, and if the auction house has possession of the domain name, completing the sale wouldn’t be an issue.
Of course, taking possession of the domain names requires additional resources to ensure the domain names are pushed to the auction house accounts at various domain registrars. I would bet that expense would be covered by the commission from completed deals that may have fallen through.
It’s 2012, and there’s no reason domain auctions should fall through. It’s disappointing as a buyer, and I am sure it’s also frustrating to the auction houses.
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