Ask for a Right of First Refusal

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Seller’s remorse is fairly common in the domain industry. As an active seller, there have been plenty of times I regretted selling a domain name I would like to have kept for various reasons. I have an idea on how to combat seller’s remorse just a bit.

When you are in the process of selling a domain name, ask for a right of first refusal if the buyer ever decides to sell the domain name in the future. Most buyers will say no because this could hinder a future deal, but there may be a chance that you could negotiate this into a deal.

I’ll explain how this would work. Let’s say you sell a domain name for $25,000. If the new owner decides to sell it and has a $50,000 offer on the table, he would have to offer it to you for that offer before agreeing to sell the domain name. Most likely, you will say no most of the time, but it’s good to have the opportunity to re-buy.

There is one time that this right of first refusal might present a good opportunity. Think about the Brand.com domain name, which had been acquired for $500,000. The company filed for bankruptcy, and the domain name was reportedly re-sold for $300k. With a right of first refusal in place, the company who sold Brand.com for $500,000 would have had the opportunity to buy it back for $300,000 (I am not a bankruptcy expert, so I am not entirely certain). Maybe they would not have wanted it, but they would have had the opportunity if they had the right of first refusal.

As mentioned earlier, most buyers would balk at this type of deal. That being said, there are some companies that are desperate for a particular domain name, and they’ll be willing to agree to that term, especially if they think a re-sale would be exponentially higher. Knowing you’ll have the opportunity to buy a domain name back in the future could help overcome a case of seller’s remorse.

1 COMMENT

  1. If you have sellers remorse on any domain during talks.

    Say if this you sell a domain for 10k. Then in “simple” agreement say something like if the domain gets resold you are obligated to pay 10 percent or whatever the amount is.

    Can work well in the flipping side of business. Domainer to domainer market.

    • That’s a great idea, excellent. Enforcement might be an issue, but I still like it, and if you sell to a party with any significant mainstream reputation then perhaps enforcement and integrity would be less of a concern. I like Elliot’s first idea, too, but am also concerned about how easy it might be to fake to try to impose a squeeze play on the original seller if buyer realizes seller may be reluctant or want it back.

    • I definitely have seller’s remorse over one I sold for low $xx,xxx not long ago, so an idea like yours would have come in handy and I wish I had it now. I do think the domain could be very resellable for significantly more later.

  2. I believe once a company files bankruptcy, it is up to the bankruptcy judge to decide which contracts and commitments will be honored and which ones will not. It all depends on what benefits the creditors.
    I will let the JD’s confirm this.

  3. When a domain name is sold, I think it should be forgotten about. You can’t eat your cake and have it.

  4. Why’s that?

    At the domain wholesale level make sense.

    You get liquidity. Buyer can get a cheaper price. Let’s say he has 10k. You want 11,500. He’s happy at 10k. He takes the risk at 10k. If it sells for 30k he’s happy. Buyer pays seller at 1500 at 15 percent.

    See it as a win win matter. Or it doesn’t sell. Owner won’t move. Buyer won’t move. No deal.

  5. It won’t work in cases a sale involves more than a purchase. There might be a trade, mutual tax savings, selling to a subsidiary.

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