What a Domain Broker Does | DomainInvesting.com

What a Domain Broker Does

A domain broker or domain brokerage service can help facilitate a deal between the owner of a domain name and the buyer of a domain name. Domain brokers operate in a number of ways, and they can either represent a domain name owner, a domain name buyer, or they can operate as an impartial third party between the buyer and the seller.

This guide will teach you about what a domain name broker does, and you can see if a domain name broker can help you. You can also reference this list of domain brokers if you are ready to use the services of a domain broker.

Working with a domain broker

Several domain brokers have a proprietary list of clients and other domain buyers. They send out a daily, weekly, or other periodic newsletter to their subscribed list offering domain names for sale. More often than not, the domain names that are offered have a buy it now price listed, but on occasion, the broker is seeking offers.

Most domain brokers represent domain owners on specific domain names, and they privately reach out to potential buyers. Some buyers may be individuals who are known to actively acquire domain names, and others are large corporations who may have an interest in acquiring a specific domain name. A domain name broker should be competent at negotiating, should use discretion when negotiating in private, and should be willing to contact prospects via telephone or email.

Some domain brokers and domain brokerages represent buyers of domain names. They are engaged to confidentially inquire to purchase a domain name on behalf of a person or company. These buyers’ brokers are working on behalf of the buyer rather than on behalf of the seller, and they should work with the interests of their buyer in mind. More often than not, they know their client’s budget, and they try to acquire a specific domain name on behalf of that client at or below the budget.

Domain broker commission

Most, if not all, domain brokers and domain brokerages work for a commission. They will either be paid a percentage of the total sale or total purchase price. Some brokers will put a cap on the total commission potential, but most offer a set commission percentage for facilitating the deal. Domain broker commissions typically run anywhere from 10% – 20% of the sale price, although the actual total should be worked out at the time of engagement. The broker should be paid upon the completion of the deal.

Nearly all domain brokers and companies will require an exclusivity period for working on a domain name sale. This prevents the domain owner from selling the domain name while the broker is working on a sale at the same time. Additionally, many brokers will require a domain owner to pay a commission if a deal is closed between a domain owner and a prospect that was initially contacted by the broker. All of this should be covered in the domain brokerage agreement that should be signed at the beginning of the engagement.

Transacting on a broker deal

Although some domain brokers and brokerages offer in-house escrow services, it is recommended to engage a licensed escrow service to transact. Using an escrow service will ensure that the transaction is completed in a timely manner and overseen by a third party who specializes in domain name escrow services.

When a deal is in the process of closing, the buyer or seller should discuss confidentiality with the broker. Some buyers and sellers prefer to keep their deals private, and a non-disclosure agreement (NDA) should be added to the domain sales contract. The brokerage or broker should be able to supply a NDA, and the counter-party needs to be in agreement with this in order to execute it.