Brokerage Agreement Should Detail Everything

Over the years, I’ve witnessed and heard about many disagreements between domain brokers and clients. There have been accusations of double dealing, poor representation, frontrunning, and everything in between. Many of these issues could have been resolved or clarified with a signed brokerage agreement.

Domain name sellers and buyers who are going to work with a broker should execute a domain brokerage agreement that outlines expectations and requirements. I imagine every professional and legitimate domain broker will have a standard agreement that can be used and modified based on the situation. The buyer or seller should have an attorney review the agreement to ensure their interests are covered.

When a company works with a buyer’s broker to acquire a domain name, the agreement should explain exactly what the broker will do on behalf of the client. It should say how much the broker will get paid and when they get paid. For instance, it could be an hourly fee, a set success fee, and it may also include a bonus of sorts for negotiating a good deal on behalf of the buyer. The agreement should also explain what happens if the broker finds a domain name, but the buyer changes their mind.

If you own a domain name and hire a broker to sell it, you should also execute an agreement. It should list the exact domain names the broker can sell, the asking prices, and the minimum prices the broker can accept. It should say how long the broker has to find a buyer. It must also explain how much commission the broker earns and when they get paid. Some brokers want an exclusive deal, meaning only they can sell the domain during that time. This should be clearly written in the agreement too.

Without a detailed brokerage agreement, misunderstandings happen easily. A buyer might feel the broker did not try hard enough. A seller might feel the broker sold the domain too cheaply or too slowly. With a strong agreement, everyone knows what is expected, so most problems can be avoided or are able to be addressed without much fanfare.