One of the unique features at Atom.com is the ability to offer an early payoff option to Lease to Own (LTO) buyers. You can offer a discount that amounts to up to 15% of the remaining balance. The buyer can choose to accept the offer and pay this amount to get control of the domain name earlier.
Sellers have one opportunity to offer the early payoff discount to LTO buyers. The seller can choose the dollar amount discount to offer rather than a percentage of the balance. The buyer will then have the opportunity to accept the offer and pay off the balance owed minus to discount or continue to pay the monthly payment as agreed.
The buyer has until the next payment due date to accept the discount. If the buyer opts to continue paying the LTO monthly fee, the discount can’t be applied at a future date. Notably, the seller can only make an early payoff offer one time to a buyer.
Atom.com CEO Darpan Munjal recently shared some data about the best time to make a LTO payoff offer to a buyer, but I can’t seem to find that post (update – embedded the post below). Perhaps he could share it again to give sellers a good idea of when they would be best served to make this offer. He previously mentioned that 60% of buyers accept the offer, but that may have changed in the last year. So far, I offered an early payoff twice but neither was accepted.
There are three situations where I would give a buyer a chance to pay off the domain name early at a discount:
- if I think the sale price is exceptional and I would still be happy with the discounted price.
- If the domain name is easily replaceable and I’d rather seal the deal for a lower amount.
- If I can use the cash for another investment, for taxes, or to strengthen my cash holdings for some other reason.
For good domain names on LTO, my feeling is I will be able to sell them again if the buyer defaults, so there’s not a huge incentive to offer a discount for an early payoff. At the end of the day, it will just be a tax burden in the shorter term.
One way to reduce cancellation risk is by offering a discount for early payoff.
The best time to send this Early Payoff offer is right before cancellations are most likely. A small incentive for early payment can make a big difference in minimizing cancellations pic.twitter.com/q3ChJJs3rq
— Darpan (@darpanmunjal) June 10, 2024
The best option is the same as that used in physical retail: prompt payment of the total purchase price, then month by month until the end of the term with a digital contract and finally, if in physical retail, the seller gives the buyer the keys so that he can work and generate income.
Here it should be the same, there are many ways, one of them Atom, etc., the domain retained on their servers, the buyer makes the website, etc., like physical retail, and there will not be as many domain returns because there is a digital contract with the same clauses as physical retail.
If they don’t do this, it’s because they still don’t know that we are in the 21st century.