Due Diligence is Necessary Even When Buying on Aftermarket
Just about anyone can list a domain name for sale on various domain name aftermarket websites. If the seller can prove he or she has possession of the domain name, there isn’t much an aftermarket website can do to prove otherwise. This makes it somewhat easy for someone to list a stolen domain name for sale.
Before buying a domain name, whether it is a private sale, aftermarket purchase, or even an auction purchase, domain buyers need to do their own due diligence on a domain name’s history. If it turns out the domain name was previously stolen, the person who bought the domain name may be out of luck, with the payment lost and the domain name taken back.
If a domain registrar is able to recover the domain name on behalf of the legitimate registrant or if a court orders the domain name returned to the rightful owner, the person who bought the domain name may lose money and the domain name. I am not a lawyer or legal expert so I won’t opine on how important possession is in the case of a stolen domain name, but I wouldn’t want to be the owner of a stolen domain name or someone who flipped a stolen domain name.
Doing due diligence can be time consuming. I generally use DomainTools’ Whois History Tool to get a really good idea of the provenance of a domain name. Oftentimes, it requires expert knowledge to detect something fishy, like a subtle email change or strange transfer.
I don’t think we can expect a domain aftermarket website to be able to research every domain name on its platform, and I don’t think any platform would guarantee all domain names are rightfully owned by the seller. As such, the burden of doing due diligence belongs to the buyer, and it’s important to be thorough.
None of us want to develop or re-sell a domain name that was stolen and unlawfully re-sold, and doing due diligence is one way to prevent that from happening.
I saw that Theo published something similar last week. I think he offers so good advice as well.
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