Back in February 2010, I made an offer in private for a domain name. The domain name hadn’t been on the market, and my inquiry was unsolicited. The owner’s asking price at the time was significantly higher than my offer, and he opted not to sell me the domain name because the gap was too great.
A couple of weeks ago, the owner contacted me again to ask if I had an interest in any of his other domain names, some of which were very good. I was interested in one name, but the price was too much for me to buy it, so I asked if I could try to broker it for him to a few clients, and he agreed (although I had no luck selling it at his asking price).
Late last week the owner contacted me again to see if my initial offer was still valid for the domain name I had originally inquired about, and I said it was. I asked if I could pay using my American Express card, and he agreed to that. I assumed the deal was done since I said my offer was still good and we were finalizing the payment vehicle.
I spoke with a couple close colleagues about the name the next day, and one mentioned that he just saw it for sale through a domain broker. Apparently, when the owner contacted me to ask if my offer was still good, he also reached out to a domain broker to ask him to get a deal done.
Fortunately the broker had just sent out his email and didn’t have any clients bite at the name, so I reached out to him and explained the situation. I didn’t want the domain owner to leverage the broker’s clients and me to get a sweeter deal for the domain name.
The lesson here is that even if you think a domain deal is done, it might not be until the domain name is in your account. Of course there might be legal recourse, but that can take a significant amount of time and expense, and unless the name is of significant value, it might not be worth pursuing.
Here’s a tip and a fairly cheap way of rewarding someone who backs out.
Contact your lawyer, have him notify the registrar a legal proceeding for X domain is in process and for the registrar to lock the name and dns.
You can usually have this run a course of several months if you play it right and the seller who backed out just may change their mind, it also prevents them from takling that better offer and reason they screwed you over to start. At some point though the lawyer will be obligated to notify the registrar if you are moving forward or not so at that point it can become expensive of course.
Just Josh’s little screw you asshole for backing out tip of the day : )
I should add that you are not obligated to actually follow through when your lawyer eventually asks what youd like to do several weeks later.
The reverse also takes place. Where you have received an offer and think you are closing the deal and then the buyer just drops off the face of the planet, never responding. That’s a bummer.
Josh–sounds good, but this is actually very risky unless you are absolutely certain you have the absolute legal right to that name.
If not, the domain owner could have a strong case of you “infringing” his legal rights to do as s/he sees fit with their property; as this approach is akin to placing a lien on someone’s property without legal justification.
US courts don’t look kindly on such questionable actions.
As I’m not an attorney, this is of course not legal advice.
@Steve, you are correct, it is all assuming the deal was to the point of what could be deemed legally binding where the seller clearly breaches said agreement. Again, correct, not merely a way of bullying.
One case in point I set said wheels in motion was a first name .com. The buyer after long negotiations agreed to sale for X, they started escrow process, we all accepted, I paid and…. they backed out. I would not take such legal action unless it got to this point.
I find that most times they back out for two reasons, higher offer comes in or they decide its worth more (sellers regret).
On a side note, care to share your last name Steve?
This is a little subject. I know that mostly invest into .com domains. You mentioned that you don’t like .org domains too much. However, if you had to pick the top 5 .org domains to own, what would they be?
In the last message, I mean, this is a little off subject. Thanks.