Sometimes to complete a domain sale, you need to offer a payment plan to the buyer, allowing him to pay over time. It might not seem advantageous to do a no-interest deal like this, but sometimes it’s necessary to close a deal.
I’ve bought a couple names using payment plans simply because it was offered. My thinking was why the hell not take a payment plan when it would cost me nothing to stretch payments out, and I could pay a lump sum if/when I sold the domain name. If you’re offered a no-interest payment plan when buying a domain name you want at the right price, it’s a no-brainer.
When you’re selling a domain name on a payment plan, here are some things that you might want to consider (these things may be different if you’re the buyer):
Keep the domain name in your portfolio or put it in escrow (like Moniker escrow) until all payments are made. If the buyer has your name and you have no money, you have less leverage when you want to be paid the outstanding balance. Legal costs to get it back could be more than the remaining payments.
Do not change the DNS unless absolutely necessary. If the buyer uses it in a way that infringes upon someone else’s trademark or does something else that would reflect poorly upon you, it wouldn’t be very good and may cost you the domain name. If you do need to change the DNS, monitor the content and make sure you let the buyer know there are restrictions.
Make sure the buyer knows if all payments aren’t made, the seller keeps the domain name and payments that have been made up until that point. You don’t want to keep the domain name in limbo if payments aren’t all made but the buyer thinks he still has rights to it. It’s your call about whether to cancel the deal if the buyer is a day, two days, a week…etc late with payments. This is a personal choice and I guess it would be dependent upon your relationship with the buyer.
Have all details spelled out in a sales agreement or clearly put in an email. Don’t make assumptions on something like this, especially if the amount to be transacted is significant.
Be assured that the buyer isn’t going to try and sell the domain name before it’s paid off. It would suck to have a 3 letter domain name be subject to a UDRP because the buyer (before paying for it in full) tried to sell it to a company that believed it had rights to the domain name.
The payments should be divided fairly evenly. You don’t want to have small upfront payments because there is less incentive for the buyer to keep the deal if he has to make very large payments at the end. If he’s only paid a small % of the price during most of the term, it may be more likely that he would back out knowing that he hasn’t lost much.
Never, ever back out of a deal if you receive a better offer during the course of payments. I don’t care if you sell a name for $10,000 and you get a $100,000 offer. If you are willing and able to finance a deal like this, I am sure your reputation is worth much more than the money you would forgo by keeping the deal. You could pass the offer along to the buyer and work something out, but that’s between the two of you.
In today’s market, self-financing deals with a payment plan is a decent way to close a deal.
