Some People Will Pay More for Comfort | DomainInvesting.com

Some People Will Pay More for Comfort

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I don’t know the exact details about the Autism.Rocks sale aside from the seller’s comments, but I want to discuss why a buyer / seller would choose to use a more expensive service when there are reputable, less expensive options available.

I have had situations where a buyer or seller would only use Sedo to transact, even though it might be cheaper elsewhere. Late last year, I had privately agreed to buy a domain name. The seller’s one term was that we needed to use Sedo or Afternic to transact, despite the fact that the domain name was not listed on either platform and the deal was struck in private. It was strange, but I agreed to pay the higher escrow cost simply to get the deal done. Unfortunately, the buyer ended up getting cold feet and didn’t close.

There are several reasons why a buyer or a seller would want to use Sedo or Afternic to transact on deals struck in private, even at a higher cost than a straight up escrow service like Escrow.com. I have dealt with a few of these situations over the years, and I want to share some of the reasons I have encountered or assume would be a reason:

  • Other party has done deals at these venues and trusts the venue more than another company they haven’t used.
  • Buyer has funds from another deal expected to clear at the venue and they are able to apply the funds to the other deal.
  • Other party trusts the sales contract at the venue and would rather use something that they have either used before or have had run through their legal department and approved.
  • Faster to use a venue that has already been used by them that doesn’t require registering a new account and sharing personal/business information like bank account information.
  • Other party likes the fact that a venue offers more “hand holding” in the process and takes possession of the domain name and funds.

The domain name aftermarket and domain investors in general tend to be a bit opaque, and familiarity breeds trust. Some people would prefer to deal with a company they know, even if it costs more money. It may seem a bit peculiar for someone to insist on using a more expensive service to transact, but it’s not all that uncommon.

I am not sure exactly what happened with the Autism.Rocks situation – whether someone was given the wrong information or they made an error when setting up a transaction. I believe Sedo is investigating the situation, and hopefully I will be able to share a comment from the company at some point soon.


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 (6)

    Mike

    Ask your friend Dave.

    June 24th, 2015 at 10:00 am

      Elliot Silver

      Dave didn’t have any information.

      I also asked Sedo’s general counsel, and he said the company has been looking into it but doesn’t have a comment yet.

      In reply to Mike | June 24th, 2015 at 10:04 am

    JZ

    Sedo offers an escrow service where the fees are almost the same as escrow.com. 3% fee.

    https://sedo.com/us/services/domain-transfer/

    June 24th, 2015 at 10:26 am

      Elliot Silver

      A $100k transaction at Escrow.com is $890.

      In reply to JZ | June 24th, 2015 at 10:40 am

      JZ

      Ah, right. I’ve never looked at the fees for such transactions as unfortunately i’ve never had one. I assumed escrow charged 3.25% across the board. I guess sedo escrow only works for lower priced sales in that case.

      In reply to Elliot Silver | June 24th, 2015 at 10:55 am

    Acro

    I’ve used almost every domain escrow service for domain purposes under the sun, including:

    Escrow.com, Moniker, Sedo, CAX, GoDaddy, Afternic, EscrowHill.com

    Never had any issues with any of them. Services that aren’t up to par soon evaporate.

    For the particular transaction regarding Autism .Rocks, there seems to have been a lack of understanding about the two different options Sedo offers; their 3% escrow fees apply only when the seller contacts them for a controlled transaction – not when a seller accepts an offer.

    Ideally, Sedo could make a donation to the buyer’s non-profit, equal to the difference in fees. Then again, such an act would require an executive decision.

    June 24th, 2015 at 12:54 pm

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