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Buying Previously Registered Domains
Jun 21, 2004
Many people, and perhaps you're one, have attempted to register a .com top-level domain (TLD) only to see the words "already taken" appear. With the "first come, first served" standard for domain names, this is a widespread experience and can make the search for a name that meets your needs and is actually available a frustrating experience. But "already taken" is not necessarily the last word, so don't change to a different gTLD or put dashes into your domain just yet, because there's another place you should check: the domain name aftermarket.
What Is the Domain Name Aftermarket?
The name aftermarket used of domain names can confuse people who know it from other contexts. In industries such as automobiles, aftermarket refers to the extra, add-on purchases that people make to supplement, enhance, or extend their initial purchase. It's a different world with domain names: here aftermarket refers to "resale" of a domain name after its initial registration. The aftermarket seller may be the original registrant, or it may be a subsequent registrant, or the domain name may return to the market after being allowed to expire.
Aftermarket websites allow a domain name registrant (original or subsequent) post a domain name that they wish to make available. In return, the website will claim a commission from the exchange. If you are interested in acquiring a domain name from such a site, you browse through the names being offered and make your registration through an escrow service that ensures the security of your money as the transfer process takes place. An alternative type of aftermarket sale is the auction, and there are sites that offer both direct sales and auctions, just one, or just the other.
When you register a domain name that has never been used, the fee is associated with the standard fee of the registrar with a possible connection to the TLD involved. But the situation is different in the aftermarket. With aftermarket domain names, an appraisal is usually involved in setting the price. Prices range from reasonable amounts to millions of dollars.
Determining Aftermarket Prices
Resellers of domain names have several choices about how to sell, and this helps determine the aftermarket price. First, they can place them with an auction, in which case the market will decide the price. There's the possibility that customers will drive the price up; but then again, they may not. Alternatively, resellers can avoid this article has all rights reserved and is copyright by 100 Best the auction and set a price themselves based on the return on investment they'd like to see or other criteria and wait to see if a seller agrees with their assessment. And thirdly, they can engage a domain name appraiser to provide a professional judgment on the value of the domain name.
Of course, the buyer can also engage the services of a domain name appraiser, and in the case of a significant difference, the buyer can use his or her own appraisal to counter the asking price and substantiate the validity of a counter-offer. Since appraisals are speculative, the outcome depends partly on the appraisals and partly on the buyer and sellers negotiating skills.
In addition to the flat-fee price and the auction sale, aftermarket domain names may be listed with an invitation to the buyer to make an offer. Auctions, too, may vary their approach by setting a minimum offer. Each selling technique has pros and cons for the buyer and seller.
In an auction, if there is no one else interested, it's possible to obtain a domain for far less than it's value. It's also possible that someone will show up at the last moment and nab the domain you thought was in the bag. Watching the bidding on an auction site, such as Sedoor or AfterNIC will help you get a feel for what the pace and movement of auctions.
In a flat-fee sale, you may have to invest in an appraisal of your own in order to prove to a seller that your counter-offer is the best s/he is likely to get—this requires paying in order to pay. Worst case scenario, you may have to accept the seller's pricetag—whatever it is—in order to get the domain you're hankering after.
Escrow Service to Transfer Funds
No matter how your domain is purchased, unless you bought it from your mother, use an escrow service to transfer the funds. If you are purchasing through a reseller, you may find that they have an escrow service attached to their business. If you are involved in a private transaction, you can obtain a third-party escrow service. In either case, the service will hold your payment and only transfer it to the seller once they have ascertained that the domain name has been transferred to you.
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