Reputation Killer - Backing Out of a Domain Deal |
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Reputation Killer – Backing Out of a Domain Deal


Want to know one of the quickest ways to destroy your reputation? Back out of a domain deal, and you can be sure that people will think twice before doing business with you ever again. This is a small industry and word gets around very quickly. People want to do business with trustworthy people, and if you violate this trust, people won’t want to do business with you. Whether you deal with premium generics, trademarks, typos…etc – it doesn’t matter – nobody wants to do business with someone that is dishonest.

In the past few weeks on various domain forums, I have seen a number of cases where people backed out of deals after an email agreement was made. A couple even started escrow transactions but backed out because a better offer was received in the meantime. I think this is VERY shortsighted. Perhaps the seller made a few hundred dollars more on a particular transaction, but it is doubtful many people will ever do business with that person again. I had this experience once, and I won’t do business with the seller again.

As I said before, “honesty and trust is the most important thing” in the domain investment business. If an acquaintance or friend tells me about someone who backed out of a deal, I wouldn’t do business with that person. It’s not worth taking a chance that something will happen in between agreeing to terms and the domain name being transfered.

The one caveat to this is in the event a trademark claim is made on the domain name. One unwritten rule of the business is that you never sell a domain name while any potential legal issue is pending. In that case, and only in that case, is it permissible to back out of a deal – and only after explaining the situation.

Whether a contract is legally valid if its made via email doesn’t really matter for the purpose of this post. I am strictly speaking from an ethical point of view. If you happen to be someone that is contemplating backing out of a deal (or maybe recently backed out of a deal), I would strongly suggest you reconsider. This is a mistake that is made only once in this business. Usually the first time is the last and only time.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of 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 Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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Comments (12)

    andy kelly

    I totally agree with the theme of your post.
    My word is my bond should be the ethos ~ unfortunately there seems to be a number of buyers and sellers who have never heard of this maxim. It’s extremely frustrating to be the victim of a trader who has no honour. There are even a few around who trade to falsify stats to lever a good ppc multiple.

    caveat emptor I guess

    December 27th, 2007 at 5:13 pm


    Think this is referring to story that came out today about me, the seller who backed out–and it was very respectful of the writer to not mention names although I’m not ashamed.

    There are always 2 sides to every story.

    When judging morality understand I’m a charitable person and am generally good. This guy profits off of trademarks and wants me homeless.

    I put the name up on escrow to 2 different people and thought 1 was not going to buy it.

    With a wild coincidence they both agreed to the transaction and paid for it simultaneously.

    I had to make a decision.

    One tycoon loses out on some future lunch money and the little guy gets a little extra to get by. Yes I know the long term “business ramifications” but this isn’t my business and it’s not the cosa nostra either. There are a lot of things that make up ethics besides this. One shouldn’t be so quick to judge another’s character.

    Great blog

    Much success


    Because no name was left, I have no idea if you are one of the sellers who backed out, but you are a seller who did back out of a deal.

    IMO, you have a very short-term view of things. I have several clients whose first business with me was back when I was selling names in the $25-100 range, and now purchase names for much more. If I had done this to one of them a couple of years ago, I could have lost out on thousands of dollars worth of business from each of these clients, and possibly more since they do business with others.

    Additionally, it doesn’t matter what someone else’s moral compass is. You need to look at yourself in the mirror every morning. Backing out of a deal is dishonest and not ethical. Much of the domain business is done on a virtual handshake.

    December 27th, 2007 at 6:36 pm

    David J Castello

    I won’t name names, but a very successful GeoDomainer I know is also one of the toughest buyers in the business. He’s had two sellers change their minds after confirming sales prices via email (one changed his mind about selling, the other tried to up the price). He took on both sellers (via his attorneys) and bought both names with the originally agreed upon prices.


    I don’t like to resort to legal action, but sometimes it’s the only way to resolve a conflict. It really depends on the name and price.

    December 27th, 2007 at 8:28 pm


    This does seem to be happening with great frequency lately.

    Disturbing. Even more disturbing is the buyer justifying or rationalizing by blaming everything or some circumstance to warrant the failure to deliver. Typically, it boils down to one thing…money.

    Unfortunately I am in a situation where I have been waiting nearly three weeks on the transfer of a domain I have paid for. No response.

    This is an endeavor where there are not many places to hide.

    December 27th, 2007 at 8:49 pm


    Correction: It is the seller blaming all else.

    December 27th, 2007 at 9:05 pm


    Actually I’m first to admit it was about money.

    Unexpectedly, both paid for it and I can’t sell it twice.

    Had to choose one. Deals fall apart all the time.

    December 27th, 2007 at 9:18 pm

    Ms Domainer


    Perhaps it’s time for a whistleblower to start a forum that names names.

    Nothing like a black list to keep sellers (and buyers) on the straight and narrow.

    Ms Domainer

    December 27th, 2007 at 11:18 pm


    Me…if it’s about the money, have you considered the legal ramifications of your actions and the possibility that the shunned buyer will sue you? Maybe you made a few hundred more on the sale, but a lawsuit will cost you $25k+ in fees alone.

    PS: You said you started an Escrow transaction wth both buyers. Why?

    December 27th, 2007 at 11:25 pm


    Well the same thing was going to happen to me either way. They both paid for the name. Nothing I could do after that point except decide 1.

    December 27th, 2007 at 11:35 pm


    this makes me think of the SEDO mobi auction…

    December 28th, 2007 at 12:03 am


    I had this happen to me last week and started the post at DNF. In my case the seller backed out after agreeing to a price, accepting Escrow and then later telling me of a higher offer.

    The seller said, he still would work with me, after several long talks and emails “to do the right thing”. I still have hope the seller will finish the deal he accepted, but talk is cheap. I have already contacted a lawyer, he has all the emails (most importantly, the Accepting of the price, with the domain, as well as the Escrow info) and this isn’t going to be about money, it’s going to be about bad business. I will be glad to fight it, because I strongly feel the seller is doing the wrong thing! More to come in the New Year (Jan 08) as that’s when the transaction “might” finish. If not, Cyberlaw has a case to work on. I will expose the business name if the deal falls threw.

    December 28th, 2007 at 5:07 pm

    Ms Domainer

    The thing is, if some sellers and buyers deal in other hinky business practices (selling and buying TM and TM typo domains; non-transparent auctions, possible shill bidding), what makes you think that they won’t screw each other over on business transactions?

    Best, Ms Domainer

    December 28th, 2007 at 9:16 pm

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