LTO Usage Can Pose a Risk

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Lease to Own deals have become much more normal in the domain space. LTO deals give buyers the opportunity to use a domain name at a lower upfront cost, and it gives domain name sellers a source of consistent monthly income. There is some risk with LTO deals for a domain investor. I was asked about this today on X.

If a lessee engages in deceptive or illegal practices with the domain name – anything from phishing schemes, email spam, selling counterfeit or illegal products/services, or hosts other illegal activities on the domain name, there can be problems for the domain name and domain name registrant.

Consider Removing “WHOIS” from Domain Name Contracts

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I use several different domain name purchase or sale agreements depending on the situation. Each of these agreements references “WHOIS” as a means of confirming ownership of a domain name before or after a sale.

With the sunsetting of WHOIS in favor of the new RDAP, it might make sense for domain investors, brokers, and escrow agents to update their contracts. This was the advice of IP attorney John Berryhill, who works extensively within the domain name industry:

He subsequently some of the larger companies in the space adjust their purchase agreements:

As WHOIS records become obsolete and no longer a requirement for domain registrars, referencing WHOIS in a purchase agreement as a means of confirming ownership will be outdated. It may also “open up a can of worms,” as John put in his post.

I hadn’t thought about this until seeing John’s post, but I am going to send my purchase agreements to John for modification. I also think it’s a good idea to have him (or other attorney) give these agreements a once-over every once in a while to ensure they remain protective of my company and align with its needs.

I Appreciate Having a Broker as a Counterparty

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I appreciate being able to discuss the sale of a domain name with a domain broker representing a third party. Not only does this give me some insight into who the prospective buyer is, but it also reduces some of the friction in a negotiation.

The best part of working with a broker as a counterparty to a negotiation is the buyer has already been educated. A broker isn’t going to take on a buyer with unrealistic price expectations. The buyer is essentially prequalified to discuss a deal. The buyer may not have the full budget, but there will be much less tire kicking.

Managing Your Own Landers Can be Difficult

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One of my favorite aspects of the business of domain investing is negotiating my own deals with prospective buyers. In order to generate some of my inbound leads, I operate a variety of my own landing pages and inquiry forms, supplemented by Efty landing pages.

There is a downside to operating my own landing pages and inquiry forms. I am fully responsible for all technical aspects of the landing pages – from their design to their resolution and functionality. This is something I do with the help of a developer, but a great deal of the management is on me.

Diligence Tip: Remove the Domain Name from Email

I do diligence on a prospective buyer because I like to know who is on the other end of an inquiry/offer email. In general, most people will reply with their full name and email address. Some people may reply with a fictitious name or nickname to try and retain some level of anonymity. For the most part, prospects don’t completely obfuscate who they are.

For my inquiry forms, the only mandatory fields are name and email address. A person may use a fake name or nickname to shield their identity, but most won’t use a unique email address nor do they take the time to create one for the purpose of inquiring about a domain name.

Most Important Elements to a BIN Landing Page for Domain Sales

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I’ve been asked to look at numerous domain name sales landing pages lately. I will generally be happy to take a look if I have the time, but I thought I would share what I think are the most important elements to a BIN landing page for domain name sales.

1) Domain name quality
2) BIN price
3) Ability to easily transact securely
and/or 4) Ability to contact seller