Due diligence is an important aspect of buying a domain name. Whether a buyer is acquiring a domain name privately without the assistance of a third party, using a domain broker, buying a domain name via auction, or using an aftermarket platform, due diligence is critical to ensure the domain name acquisition is legitimate.
I don’t think auction platforms do much (or enough) due diligence on domain names that are listed for sale. I believe some confirm that the customer who listed the domain name is the registrant of said domain name, but I am not even sure if that happens for every domain name nor do I know if it happens with every venue. Even if this is true, a thief who stole a domain name and has possession of it could easily prove possession of the domain name, so this is not much help.
As part of doing due diligence, it can be helpful to contact previous domain registrants to track the history of the domain name. DomainTools’ Whois history tool is the primary tool I use to see the historical Whois records for domain names. I believe DomainIQ also has some historical Whois records as well. Google searching for Whois and the domain name may also reveal some (spotty) results.
Once I have historical contact information, I will use that to contact former registrants to confirm that they sold or let go of the domain name. I might not contact every registrant, but I will try to contact at least a couple if I have any questions about the domain name or sale listing. Typically, I will start off by sending an email to ask general questions about the domain name, and I usually follow up with a phone call. I tend to get better results on the phone, but I prefer email because it leaves a record I can use if something ever comes up.
Unfortunately, domain name theft is a big problem. Some people have no idea a domain name was stolen for quite some time, and once they find out and complain to their registrar or take legal action, it can leave a domain name in limbo. I have seen several instances where a domain registrant had a domain name removed from their account because a prior registrant had it stolen and it was subsequently re-sold. This can become a messy and expensive legal situation.
Doing due diligence is important, and I try to contact former registrants to confirm that they sold the domain name. Unfortunately, many former registrants do not reply no matter how many times I try. If I am not comfortable with a purchase situation, I will walk away from an opportunity. It’s important to understand that just because a domain name is listed for sale in an auction, via broker, or via marketplace, thorough due diligence has probably not been done and it is the buyer’s responsibility to do it.