Geo Domain Buyer Broker

(I wish I could share the domain name with you but the deal was confidential.)

I was contacted by a new client to broker the purchase of a large non-US city geodomain. We had a good conversation about his motivation for buying the domain and of course, his budget. He had a good business sense and was easy to communicate with. He preferred to communicate by email since English was not his first language.

So, I knew that he was "mentally" qualified to chase a big domain like this so now I had to make sure that he was financially qualified. He said his budget was $50k. My thought was that this MIGHT be possible but most likely he would have to pay more. Regardless, I edited my standard domain buyer broker agreement and took on the project but with just a little research, I knew this one was going to be a challenge.

The whois was not private but the owner would prove to be hard to identify. With some help from DomainTools.com, archive.org and some strategic search engine searching, I was able to find a good contact phone number for the owner. I always try to pick up the phone and talk with the owner rather than to engage by email. More often than not, people are very different on the phone than they are by email. Also, by phone you have the element of surprise where you can gauge their immediate reaction, something you can't get by email.

I called and left an introductory message with my interest to make a serious offer, my phone number and my email address. Oddly enough, this owner did not want to talk on the phone and insisted that we negotiate by email. Like my client, this person's English was not his first language either. I think time differences were partly responsible for the email preference. Anyway, now I'm thinking this should make for interesting negotiations... three different languages with each party in a different country as well.

So, here we go with the negotiations. I kick it off with $25k since that really is a respectable starting price that should get most people to the table. Nope. Counter offer was well into low six figures which was way out of my client's price range and way to high priced for this geodomain. Sure, this was a large city geodomain we are talking about but remember, this is a large non-US city so I am confident that this owner hasn't seen too many offers over $25k.

I ask if I make an offer of $50k if it would be accepted. I propose counter offers this way because if I just counter with $50k then the seller will think that there is more where that came from. I always say something like "If I can get my client to make a $50k offer, would that be acceptable?". Also, I like to mention that IF the $50 is accepted that my client could close quickly without contingencies. A quick closing and no contingencies can be VERY valuable and always helps to keep the price down.

I get a reply of $90k take it or leave it and that the seller will need a delay of a few weeks in order to reorganize his business so he could sell the domain. RED FLAG!

Reorganize his business? First, I'm not even sure that I am even dealing with the decision maker and even if I am, I'm not sure that there isn't some partial owner in the business and/or the domain so yikes, this deal could fall apart very quickly if I can't verify a clean "title" to the domain.

However, since I like to focus on the positive, the price move down from a $175k original price to $90k is very positive so if my client can move up from his $50k budget, looks like we MIGHT have a deal.

My client agrees to the $90k and agrees to the delay but insists, appropriately, that he write up the contract and that the seller have the absolute sole right to sell the domain. Once I get the seller to agree to a price, the deal usually goes through but in this case, I'm thinking that the language barrier, time differences and question about ownership inside the seller's company makes for a low expectation for a deal to go through. However, a good broker always has to focus on the positive aspects of the deal while being prepared for the twists and turns.

Long story short, the seller did have some legal work to do and did have sole ownership. He signed the contract. The escrow transaction went through just fine and everyone is happy.

Learning Points

Pick up the phone: Always pick up the phone and call the other party. When you call you have the advantage to gauge the person's reaction without giving them the chance to give their response much thought which is usually a good thing.

Be positive: Always try to find the positive aspects of the deal but look out for deal killers like misrepresentations, vague answers, lack of interest to sign a contract and other hints of problems. Usually deals go through just fine but a good broker earns his/her money when it looks like the deal is falling apart for one reason or another.