Do Your Homework Before Making an Offer

Elliot Silver
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When I am interested in buying a particular domain name, I often do research to learn about the history of the domain name. Using insight I can glean from public and private sources, I may be able to learn something that will guide my offer. When I make an offer, I want to be reasonable, but I also don’t want to look uninformed.

There are several things I look for prior to making an offer, and I’d like to share quite a few of those below. Sometimes, I will do more or less research as my research dictates. I have also provided a bit of color for each of the things I look at to try and make it more clear about why I do this and what it could mean to me:

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Types of Domain Name Acquisition Deals

Elliot Silver
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Earlier this week, I wrote an article about using an option to buy a domain name. Since there are many types of deals that can be struck to acquire a domain name, I thought I would discuss some of them in a blog post.

It may be beneficial for a buyer and seller to work out a creative deal when a straight-forward acquisition is not possible. Some buyers don’t have the capital to buy a domain name as they start their business, and others would benefit from securing the domain name as their business launches. A creative deal can add value to the seller and give the buyer flexibility.

If you can think of other deal structures that aren’t mentioned below, please add them to the comment section so that I can add them to the article.

Types of domain acquisition deals:

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Down Market Could be Good for Domain Buyers

Elliot Silver
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A down market could be a good opportunity for domain buyers

If we see a prolonged bear stock market, it could be good for people looking to buy high quality domain names at better prices. People who have owned domain names for a long period of time might be more inclined to sell as the stock market goes down.

I have been doing quite a bit of outreach in an attempt to buy excellent keyword .com domain names. My efforts haven’t been fruitless, but it seems to be getting more difficult to buy great domain names at reasonable prices. Names that would have likely sold for $5-15,000 now seem to be priced at $25,000+.

For the most part, I have been

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Due Diligence: Subtle Email Address Changes

Elliot Silver
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There are many different facets to doing due diligence when buying a domain name. I use DomainTools’ Whois history tool to verify as much information as possible before buying a domain name. I will often call the phone number listed on the Whois record, and I may even call previous phone number listings as well. I don’t think too much due diligence is possible.

One area that may tip people off to a potential issue is a subtle email address change. When I see a very subtle change in the listed email address, it sets off alarm bells in my head. For example, if a Whois email address for 10 years was FirstNameLastName@yahoo.com and it recently changed to FirstNameLastName@hotmail.com, it makes me wonder if the change was legitimate. This change could be used for social engineering or to make others think the domain name has not changed hands.

I have seen and heard of domain name

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Using an Option to Buy a Domain Name

Elliot Silver
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5

Last week, I wrote an article about a startup called Final that is using the GetFinal.com domain name for its website rather than the high value Final.com domain name. One of the commenters remarked that the company is a very new startup and likely doesn’t have the funding to buy the domain name right now. In a situation where a startup doesn’t have the funding to buy an expensive domain name, they might want to inquire about buying an option to buy a domain name.

Essentially, buying an option from a domain owner would entail paying a certain price now to lock in a price for a future purchase. For instance, using my own domain name as an example, for $25,000, I could sell someone an option to buy DomainInvesting.com at a strike price of $2,000,000 within the next 3 years. This means the prospective buyer pays me $25,000 today to lock in a $2,000,000 price at some point during the next 3 years. If they decide against buying the domain name, I keep the $25,000 and can sell the domain name to anyone else once the option expires.

There are advantages to

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Put an Expiration Time on Offers

Elliot Silver
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If you are similar to me, you probably spend quite a bit of time trying to buy domain names. When you make an offer on a marketplace like Sedo, there is a set time before the offer expires and is no longer valid. If you are making offers directly to the domain owner, you should probably do the same.

I personally find that most offers I make are responded to within a few days. Domain owners, with the exception of some domain investors, tend to respond quickly to offers because they either know the offer isn’t good or the offer is at least worth exploring further. In these cases, the offer is either accepted or rejected (even a counter offer can be construed as a rejection). When someone doesn’t reply to my offer, I generally consider it a rejection and move on with other inquiries.

The issue I potentially face is that

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