It doesn’t happen often (enough), but sometimes a motivated buyer makes a very good opening offer that is acceptable right off the bat. The challenge with a good opening offer is whether to accept the offer or push back and try to get an even better offer.
There are a couple of schools of thought here.
Accepting the offer right away could theoretically cause the buyer to think he opened too high and might try to walk back the offer. By accepting, the domain owner has essentially set a ceiling should the buyer decide to walk back the opening offer by making an excuse (“Sorry, the board did not approve but we can offer $x instead”). On the other hand, should the buyer be ethical, accepting it right away could get a deal closed rather than giving the buyer time to seek out something else at a better price.
On the other hand, not accepting the opening offer could present an opportunity to sell a domain name for even more than anticipated. Most buyers don’t make the best offer as their opening offer. Even if the buyer thinks the offer is great, getting push back could cause them to make a better offer to get a deal closed. Accepting an opening offer could leave money on the table.
Whenever an offer is rejected or pushed back, there is always the risk of losing the offer.
Today’s poll asks whether you accept a good opening offer:
Call the buyer and confirm the offer. Sometimes offers are fake, sometimes they are real. If it is a genuine offer, you can walk them through the transaction while on the phone or explain to them the Escrow process. Answer and questions or concerns they might have and follow up with an email in writing what you discussed on the phone.
I once had a $35K offer that was accepted and I called the buyer and asked him, is that how he does business? He said yes and handed me to his secretary to close the deal that day with a contract and all.
I once had a $50K deal that I accepted on behalf of a Seller straight away when I advised them not to reply straight away. That they might scare the buyer.. That name is still for sale and the buyer is lost to the tales of time.
Lesson, call to confirm and gauge the situation with your intuition.
It all depends on the circumstances and the domain, but sometimes I will accept (occasionally losing the deal), and other times I counter (occasionally losing the deal).
I don’t know if there is a secret formula here, but I know everyone seems to have their own strong opinions on this subject. Good poll!
The biggest lesson I learned in my nearly 3 years of domaining; consider a good opening offer and your bankroll leverage. I held to the always reject the first offer rule; great rule for wealthier DN speculators. Last spring 2017, I got an offer of $10K on a domain name. Turned it down. Ran into some financial troubles a few months later. Ended up selling the same DN for $5K to the same buyer. So, it depends on your financial situation. The domain name is about leverage and bankroll management.
I immediately shrank my 400 DN portfolio down to 100.
No. Wasn’t it said somewhere that Mike Berkens said you should always counter? That’s my view, for all the kinds of considerations above.
The problem, however, is that some buyers are really stubborn, stupid and pigheaded, so they also lose out. Some of them are not even willing to discuss or respond even once when you counter. Some of them will occasionally even tell you they will not discuss or negotiate. It just doesn’t get any stupider than that, not to mention cowardly. Honestly, you will not die from replying to a counter. In one or two cases for me, for example, the worst that could have happened was that I was ready to accept their first offer if they had only responded once to my counter.
(To me the #1 issue in this is that if you accept the first offer even if you find it acceptable they might weasel out on it thinking they could have done better.)
My approach is a bit different, so here’s Alex Verdea’s school of thought:
Honestly I am not even interested in an offer at all! I state my price and go from there.
I want to be transparent and upfront from start to finish.
I get some people that counter within 50%-60% of my asking price and I simply say no. Of course they all complain about the price etc but I tell them politely not to take their frustration out on me and that is not my fault they came to me with a broken budget! 😉
I never EVER lower my price or targets. Why?? IF I don’t believe in my price and product how could I expect anyone else to BUY from me?
You guys are talking about loosing a deal if you accept the 1st offer or if you counter??
WHY not lose a deal on YOUR OWN TERMS? If I lose a deal I want it to be QUICK and on my terms!
I also believe that there’s not 1 thing, offer or something that you can say(unless you are being unprofessional) to blow a deal. I think it’s the things we don’t DO that blow a deal ie: not following up, not asking for the sale again and again, not pushing, not building value, not doing whatever it takes.
I lost a $96K offer/sale because I did not simply accept and arrange for payment.
I’ve been in the same position and it sucks.
Yikes! I’m sick just reading about your lost offer.
Has it been months or years since that happened?
Even if you are fully satisfied with the offer, a buyer feels better if you make a slight counter. Human nature.
I usually don’t accept the first offer, unless it’s way above my BIN.
But once in a great while, you get buyers who make their top offer right off the bat. These are usually CEOs or executives who have no time to play games and want to buy right away.
@steve Very good point. That is why one-size fit all approaches can cost well meaning domain speculators a lot of $$$. You have to do the research; know who you are negotiating with.
All my DN have BIN price with 15/20% above of what I Want for DN.
If the offer is the BIN, I take it without remorse; period.
99% of my domains have fair market BIN prices enabled and immediate transfer available for quick sales. however, if i receive an offer that’s acceptable, depending on the name and profit margin, i may accept the initial offer rather than risk losing the sale with further negotiations. buyers often make impulse offers and flake when given the chance!
A great business mentor once told me the first offer is always the “sucker” deal.
In my experience, he was correct. I’ve always received better offers by not accepting the first offer.
Also, in the reverse, I offered someone their “asking” price in a deal, which is like accepting the first offer. It should have been a closed deal, with me walking away with $3mil non-recourse loan! As free as FREE money as you can get. (complex music IP deal not domain).
Instead, IP seller’s wife said “we can get more because he offered us asking on first try!”
That kitchen kool aid conversation literally sunk an international multi-million dollar deal.
So to your original question, no I suggest you almost never take the first offer. Rarely…very rare.