Buying Domain Names

Every domain investor should do some due diligence when purchasing a domain name. Generally, this entails a Whois lookup at a site like DomainTools, and it should also involve a Whois History search. If something looks funky in the Whois records, there may be reason to investigate further.

One of the best ways to do due diligence on important domain names is to contact the previous owner. You can easily find out his or her information in the Whois History too. You’ll want to let the person know that you’re calling to do due diligence and you just want to confirm that he or she did in fact sell the domain name to the current owner.

If you really want to pry, you can even ask the price, but most people will find this question inappropriate. You also may not want to know how much more you are spending than when the domain name was previously sold.

Like purchasing art, a domain name’s provenance is important to know. Generally, a domain name will not become more valuable because a particular person or company owned it, but you should know that all previous transfers were legitimate.

When inquiring to purchase a domain name, I often receive a reply that includes a price along with my favorite phrase in this type of scenario: “… or submit your best offer.”

Why do I love this phrase? From my perspective, it means that the price is flexible, and while the domain owner would like to sell the name for a specific price, it isn’t a firm price. Without a doubt, I always reply to this with a lower offer. It really makes no sense not to do that, unless you really need the domain name and can’t take a chance that the owner doesn’t reply.

One thing you can take from this is that when you’re asked about the price of one of your domain names, you probably don’t want to encourage the potential buyer to submit a lower offer. Perhaps he will do that anyway, but why encourage it? If he doesn’t respond positively to your price, you can always follow up at a later time and ask him what he was thinking in terms of price.

This may seem pretty obvious to an  astute  domain investor, but I see it happen all the time, and I love it when it happens when I am buying!