Daily Poll: Should a Domain Name be Used Before Being Paid Off?

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Payment plans are a popular way for a company to buy a domain name. The way it typically works is that the buyer and seller agree upon a price, and the buyer pays for the domain name over an agreed upon period of time. A $100,000 deal paid off over 2 years could involve quarterly payments of $12,500. A company like Escrow.com can manage this payment plan or the buyer and seller can choose to use an attorney to manage the escrow.

I have always felt that the buyer should be able to use the domain name upon making the first payment. Perhaps more is spent in the initial payment to ensure there is enough skin in the game, but the sooner the buyer begins using the domain name, the easier it should conceivably be to pay for the domain name as the business is generating revenue.

There is another school of thought that the buyer should not be allowed to use the domain name until it is paid for in full. A domain owner could be concerned that the usage of the domain name could harm its value. If a startup fails or has negative attention, it could harm the value of the domain name, and therefore, it should not be used until the buyer owns it fully.

What do you think?


5 COMMENTS

  1. Not much different than mortgaging a building. You get to use it at closing, not in 30 years. If you run a strip club that might devalue property for next buyer, but that’s biz.

  2. I think it depends on the name. If it’s a very unique word like Uber and the company crashes after a couple years then I believe it would taint the name, but if it’s a more common name like Rain then I don’t think it would matter.

  3. I think that if an agreement has been made and an initial payment has been placed as a down payment then thee person that is mortgaging the domain should be able to use the domain. It’s just like buying property or even a home. The person that is mortgaging the property gets to use the property even though they don’t fully own that property.

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