Why I Put a Time Limit on Domain Prices
I’ve been more vigilant lately about putting a time limit on my sales offers, and it doesn’t have anything to do with domain sales strategy. The reason I have been doing it is to prevent someone else from frontrunning my domain names.
Here’s a scenario for you to illustrate my concerns:
I offer to sell a person a domain name for $5,000. He agrees to the price, and we have a deal. Over the next several days, the prospective buyer reaches out to dozens, hundreds, or thousands of other people and tries to sell my domain name for $20,000. If he is successful, he goes into escrow with me and closes quickly. If he isn’t successful with this, he disappears without a trace and my deal is off.
There are obvious risks for the other party in doing this. If the owner of the domain name finds out because he receives an inadvertant email or someone contacts him to verify ownership, the deal could be off. In addition, if a third party buyer agrees to buy the domain name but doesn’t follow through, the person in the middle of the deal might not be able to quickly flip it as planned.
I don’t think this is a common practice, but it is something that can happen very easily. People do this on auctions and domain names in various stages of the expiry channel, and there is little that can be done to prevent that, especially if the auction venue has no incentive to curb the habit. I think limiting the time someone has to pay for a domain name can help prevent it. Aside from that, it can ensure that payment is made quickly, but that is usually a secondary need.
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