Make Sure The Seller Can Legally Sell You a Domain Name | DomainInvesting.com
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Make Sure The Seller Can Legally Sell You a Domain Name

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After a few weeks of back and forth negotiations with the Whois contact on a great domain name, I came to terms and agreed to buy the name in a five figure deal. The price was more than I initially wanted to spend, but I felt it was still going to be a very good deal with enough upside to take the risk. All was going well, but he needed to wait to pull the trigger until his wife’s website could be moved to an alternate domain name.

Fast forward a couple of weeks, and I hadn’t heard anything back regarding the domain name. I called the domain owner, and apparently there was some “family discord” about selling the domain name and relocating the website. The wife, who owns the website, was not happy at all that the husband, who has ownership of the domain name, had agreed to sell the domain name.

Luckily for me, this happened before the deal actually transpired. Had I bought the domain name and the woman had an issue after the deal, I could have been in a legal murky area. Although the domain name was registered to the husband, the wife may have had some say over the domain sale, and that could have been problematic, especially since it seems that she owns the actual business.

When you’re buying a domain name, it’s important to ensure that the domain name registrant has the authority to sell a particular domain name. You can do research to see if he/she owns the company or is a domain manager. If the later, you better check with company management before you execute your deal. Yes, it may actually kill your deal, but it will certainly save you trouble if the deal wasn’t legit.

I am still hoping the husband can convince his wife to sell the domain name, but I am glad it didn’t get tangled in personal issues.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. 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 (9)

    Elliot Silver

    There was an interesting story a while back about Sofa.com domain name being sold by an employee who didn’t have the right to sell the domain name.

    August 15th, 2011 at 3:59 pm

    Adi

    Now the husband is bitching around for not selling you the domain and the wife is going to call you back in a few weeks. That’s going to be a good opportunity for you to lower the price 😉

    August 15th, 2011 at 5:12 pm

    Snoopy

    This is often used as a negotiating strategy (have to ask wife, need to put it before the board etc), a way of pulling out if they aren’t really sure.

    August 15th, 2011 at 6:18 pm

      Elliot Silver

      @ Snoopy

      Good point, although it seems legit since the website is fully operational and he didn’t make any attempt to increase my offer.

      August 15th, 2011 at 6:19 pm

    Larry

    Agree with Snoopy and have seen this a few times.

    Anyway, you said:

    “husband, who has ownership of the domain name, had agreed to sell the domain name.”

    and then:

    “Had I bought the domain name and the woman had an issue after the deal, I could have been in a legal murky area. Although the domain name was registered to the husband, the wife may have had some say over the domain sale,”

    In order to be in a legal murky area, the value of the transaction would have to have been high enough for someone to get a lawyer involved. While it’s hard to tell since you said “5 figures” which could mean $15,000 or $95,000 if the amount of the deal is toward the lower end that’s simply not going to go legal from a practical standpoint. If anything if they wanted the name back you could make a few thousand by selling it back to them obviously.

    I think this also shows a good point about not publicizing your sales (ala Rick Schwartz) which you don’t do. The reason is say you buy that name for $20,000. Then say you flip it for $70,000. And you brag about it. The seller finds out. With that kind of money on the line they are going to find some way to get some money out of you. Maybe by saying you lied to them or whatever.
    Doesn’t have to be true. They just need a basis to claim something.
    By keeping quiet you greatly reduce the chance of something like this happening.

    That being said if this were a deal I was doing the above particular situation wouldn’t have bothered me one bit. Simply because the husband apparently (from what you have said) did have ownership rights.

    Depending on the circumstances this appears to be a risk worth taking for a good deal. There are many things in business that leave you exposed (not getting a signature on a credit card charge etc.) but you take your chances.

    August 15th, 2011 at 6:55 pm

    Elliot Silver

    @ Larry

    It would have been enough for them to take legal action, but it’s a moot point. The husband (wisely) opted to not do the deal because his wife would have been upset and not angering his wife was more valuable to him than the money from the domain name (arguable :-) )

    “I think this also shows a good point about not publicizing your sales (ala Rick Schwartz) which you don’t do. The reason is say you buy that name for $20,000. Then say you flip it for $70,000. And you brag about it. The seller finds out. With that kind of money on the line they are going to find some way to get some money out of you. Maybe by saying you lied to them or whatever.
    Doesn’t have to be true. They just need a basis to claim something.
    By keeping quiet you greatly reduce the chance of something like this happening.”

    EXACTLY. I would never want someone to see that I made $10,000 or $100,000 or more in a two week flip. I would feel guilty if I knew they knew how much was left on the table, and I would also be concerned that out of nowhere some legal issue pops up. People smell money and they get jealous, and I have absolutely no need to tell anyone how much I am earning, especially when a high value flip is less about work and more about market insight.

    I, too, would be upset if I had a domain name for 10 years, sold it for $2,000 and found out that the buyer then re-sold it for $50,000. I would take the medicine, but I wouldn’t be happy. Some people would automatically get litigious as if there was a legal argument.

    August 15th, 2011 at 7:01 pm

    John

    Once a sale occurs the Trade is Done. Most people can’t handle that. A professional should understand that if someone buys something at $2K (which one didn’t have to sell at the price) and is able to flip it for $100K good for them. They had a better skill set or contact list.
    I have come to realize that domains make people crazy similar to politics or religion, so I do hear You Elliot.
    Perhaps, the topic is worthy of a future post.

    August 15th, 2011 at 8:55 pm

    Elliot Silver

    @ John

    That’s how I look at it, too… Most people, sadly, would look at it as if they got screwed, despite the fact that they were happy as a peacock when they got $2k for a name they’ve never used and only spent $250 renewing.

    August 15th, 2011 at 9:06 pm

    Jesse

    Jealousy is a crazy thing… no matter how nice you are, how well you conduct yourself or how much of a “nice guy” you are, there will always be people out there that will never be happy.. I guess it falls into the “you can please some of the people all of the time and all of the people some of the time but not all over the people all of the time.

    August 16th, 2011 at 12:38 pm

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