March 9, 2023

Domain Due Diligence – What to Do Before You Buy

written by

Joe Uddeme

Joe Uddeme

Domain Due Diligence – What to Do Before You Buy

Before getting excited about the domain name you want being available, ask yourself why it is up for grabs – especially if it appears to be a great name. Many domain names on the open market have a hidden past – as NameExperts.com Director Joe Uddeme explains…

Let’s say you just found out you can secure a domain name that matches the name of your new business. Or maybe you’re doing it the other way around and want to start with an available domain name that you’ll build your business around.

Now let’s suppose it’s one of those short, snappy modern domain names made up of five letters that don’t mean anything.

Now press pause.

Before you plan the entire history of your brand around these five letters, it’s advisable to perform some due diligence – just as it is when buying any domain name.

When buying a car, it’s helpful to have a trusted mechanic perform an inspection and to review the vehicle’s service history before handing over your cash. A similar thing applies to purchasing domain names.

It’s necessary to perform proper due diligence – or you risk wasting money. This article will give you a due diligence checklist to follow to ensure you make a worthy purchase and ensure you don’t buy a domain name with a damaging hidden past.

Key Takeaways

  • Spammy “past lives” of your domain name could damage your reputation
  • Discover the tools that help you discover your name’s true past
  • Make sure there are no trademark issues

Why You Need To Conduct Due Diligence For Any Potential Acquisition

Due diligence means investigating the details of a business or person that you want to enter a commercial transaction with. It’s necessary because it helps you understand the nature of what you want to buy, the risks involved, and anything else that could be a hindrance.

Not conducting domain name due diligence before buying can cause trouble. For example, you may buy a domain that has been blacklisted for spam activities and wonder why your website isn’t getting traffic. Or why any email sent from your domain goes to the recipient’s spam folder.

You could also buy a stolen domain and be subject to lawsuits accusing you of theft – or one that used to be an adult site. The list of potential risks is endless, so always carry out domain due diligence before any purchase.

 

Domain Due Diligence Checklist

WHOIS

WHOIS is a public database containing information about domain name owners. You can run a WHOIS lookup to trace the ownership of a domain name, and it’s advisable to do this for any domain you want to buy a domain name.

Check the WHOIS history for at least a year to see if there were any ownership changes. If you notice any, you can contact the prior owner to ensure that they actually transferred the ownership and the domain wasn’t stolen. Domain thieves try to sell domains in a hurry, and this process helps you avoid buying a stolen domain and exposing yourself to legal troubles.

Because of Europe’s GDPR data protection laws, you may not be able to see details about a domain’s owner (it’ll appear as redacted). However, access is granted to certain licensed third parties that, in turn, offer that data to people for a fee. DomainIQ and DomainTools are two examples of such parties.

Domain History

The WHOIS lookup will help you verify that the domain is owned by a legitimate buyer and not a hacker. After that, the next step of the domain name due diligence is to check how the domain was utilized in the past. What type of website was it used for? Is it something that could have gotten it into a blacklist?

A good website to check a domain’s history and utilization is the Wayback Machine. This is a digital archive that lets you see how the website for any domain looked in the past. The idea is to ensure that the domain was used for appropriate activities.

If it was used for nefarious things like unregulated gambling, domain name scams, or data theft, it’s a signal to stay clear because the domain may have been blacklisted by search engines and email providers.

Potential Trademark Issues

Ensure that the domain name you want to use is not similar to an established trademark because this can lead to infringement lawsuits and a possible court order to hand over the domain. There was a popular case of an entrepreneur called Mike Rowe, who registered the “MikeRoweSoft.com” domain for his software company. Microsoft, the well-known software company, filed a lawsuit alleging trademark infringement, and Mike Rowe had to hand over ownership of the domain in exchange for an Xbox and some certification training.

If the domain name you want to buy is similar to an established trademark, it’s best to avoid it and go for something else.

Search Value

Another important part of the due diligence checklist is to see how the domain name performs on search engines. If you can’t find valid results when you input the domain name of a search engine, it’s a signal that it may have been blacklisted due to past activity. Check if there are backlinks from nefarious sites pointing to the domain because that represents another red flag.

It’s also important to see if a domain has been marked by email blacklists. If so, emails from that domain will likely end up in the recipient’s spam folder instead of the main inbox. Popular email blacklists include SpamhausBarracuda, and Proofpoint, and most of them let you run a simple scan to see if a domain is part of the list.

 

During the Acquisition Process

Once you have ticked all the boxes in your acquisition due diligence checklist and decided to proceed with the purchase, there are some essential tips to follow.

Tracking Each Step

You should create a spreadsheet to track each step of the domain name sale. The spreadsheet should contain sections like “current status”, “date transferred”, and “price”. This will help you stay on top of every detail of the imminent domain acquisition.

Setting Up Escrow

Escrow refers to a neutral third party that holds the money before it is transferred from the domain buyer to the seller. It’s necessary to use an escrow service to prevent yourself from falling victim to fraud. The escrow service will hold the money that you’ve agreed to pay for the domain and only disburse it if the seller fulfills all the terms of the deal.

Large stash of US dollars to denote importance of safe escrow services when buying a domain name

 

What To Keep In Mind For the Transfer Process

When you acquire a domain, the buyer will have to transfer it to your registrar for it to officially become yours. A domain must be at least 60 days old to be transferable according to rules defined by ICANN, the governing body for domain registration. The owner will need an authorization code from their registrar to authorize the transfer to your own registrar. Once this is complete, the domain is officially yours.

If you need help with domain name due diligence, you can hire a professional domain broker with experience in appraising and investigating domain names.

The broker can help you decide if it’s a worthwhile purchase and also negotiate a good price with the owner. Check out our post on domain name negotiation tips for further insight into this exciting and complex world!

 

About the author

Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Subscribe for More Domain Buying & Selling Advice

Related posts

Alarming image of a piece of paper stamped with 'scam' for an article about domain name scams
Understanding the Domain Name Scam

The bigger the domain name purchase price, the more attractive it is to scammers and fraudsters. Global domain name broker Joe Uddeme shares his top tips for staying safe when buying or selling premium domain names. It’s essential to understand the different types of domain name scams to protect yourself and your online identity. Domain name holders must be vigilant about renewing their domain names to retain exclusive rights. Domain name scams can be difficult to spot, but there are ways to identify them, such as recognizing phishing emails. One domain name renewal scam typically involves urgent phone calls or emails pressuring you to renew your domain names immediately and pay or risk losing your domain. This domain name renewal scam tries to trick people using phishing scams and deceptive tactics when registering names. Awareness and reporting are crucial to protect yourself. Be cautious of emails or letters that create a sense of urgency or threaten to cancel your domain name registration. Watch out for fraudulent domain renewal notices that may look official but are not. Domain registrations often come with options for renewal or transfer, so explore these to avoid falling for scams. Always verify the authenticity of the email or letter by contacting your registrar company directly. Be aware of deceptive practices by companies that send official-looking letters from a domain registry, urging you to transfer your registrations under false pretenses.   Protecting Yourself from Domain Scams Always use a secure payment method to pay for domain name renewal. Recognizing legitimate renewal notices is essential to avoid unnecessary fees and potential loss of domain ownership for the customer, so don’t ignore every email you received about your names. Just treat them all with caution. Verify the authenticity of the email or letter by contacting your domain registrar company directly. Scammers often exploit the relationship with your existing registrar by suggesting that a transfer is merely a renewal process. Monitor your domain name registration and renewal dates to avoid missing important deadlines. Scammers use various methods, including urgent phone calls and deceptive emails, to execute a renewal scam. Use domain locking to prevent illegal transfers. Domain hijacking is another threat that can be mitigated by this measure. Registration scams typically manifest through fake renewal notices, creating confusion and unwarranted financial pressure. Keep your contact information private by using a domain name privacy service. Scammers may trick owners through fake offers, exploiting confusion around domain registration and renewal. Fraudulent phishing scams often target website owners, too, using tactics to deceive them into believing they owe money or need to make changes to their domain or hosting services.     Understanding Domain Name Renewal Scams A Domain name renewal scam is a type of intellectual property scam or confidence scam that target the owner. These scams can result in financial loss for businesses and individuals. The financial loss can be substantial, affecting both small businesses and large corporations. Domain name scams can take many forms, including domain slamming, false offers to buy or sell domains, and fake trademark protection. It’s essential to understand the different types of domain name scams to protect yourself and your online identity. Domain Registry of America is an example of a fake trademark protection service. They contact the website owner claiming to have a trademark right or warning that someone else owns the rights to your name. Check your expiration date and make sure your domain information is protected so you don’t lose control of your asset. While you can’t technically buy a domain name forever, you can register and renew for extended periods. Domain name scams often involve unscrupulous domain name registrars attempting to generate revenue by tricking businesses into buying, selling, listing, or converting a domain name. These scams can be difficult to spot, but there are ways to identify scam tactics. Be cautious of emails or letters that create a sense of urgency or threaten to cancel your domain name registration. Always verify the authenticity of the email or letter by contacting your registrar company directly. Be able to recognize scammer tactics by paying attention to blog post and article updates. Customers should also consider adding two-factor authentication for all registered accounts, or hiring a domain name consultant for guidance. Definition of domain name scams A domain name scam is a fraudulent scheme where scammers deceive individuals or businesses into paying for fake registration services, overpriced renewals, or by impersonating legitimate registrars. It often involves phishing, domain hijacking, or misleading offers to trick victims into making unauthorized payments or losing control of their domain Importance of awareness and prevention Awareness is the first line of defense against domain name scams. The website owner must be vigilant and proactive in protecting their assets. This means being cautious of unsolicited offers, verifying the authenticity of emails and letters, and keeping domain registration information up to date. By understanding the risks and taking preventative measures, website owners can safeguard themselves from getting scammed. Regularly monitoring domain status and using secure payment methods for renewals are also crucial steps in prevention.   Domain Registry and Scams Domain renewal scams: fake notices and invoices Domain scams are a common tactic used by the scammer to trick the owner into paying for unnecessary services or transferring their site to a different registrar. These scams typically involve sending fake notices or invoices that claim the domain name is due for renewal. Often involving inflated prices, notices often appear to be from a registry or a legitimate company, but they are actually from fraudsters posing as an internet registry. Swindlers use various tactics to make these notices or invoices appear legitimate. They may include the domain owner’s contact information and registration details, creating a sense of urgency by claiming that the domain names will expire or be lost if the renewal fee is not paid immediately. They may ask for you to renew your domain and pay an exorbitant fee. This pressure can lead the holder to act hastily without verifying the authenticity of the notice or link. They may also try an inflated price on the renewal scam for your website or use a scare tactic and tell you your name is about to expire if you don’t pay a fee. To avoid domain scams, website owners should be cautious of unsolicited notices or invoices. Always verify the authenticity of the sender by contacting the current registrar directly or checking the domain name holders registration information online.     Domain Scams – How to Stay Safe To protect yourself from domain scams, it’s crucial to be vigilant and take proactive steps. Here are some tips to help you avoid falling victim to domain scams: Keep your domain registration information valid, up to date and secure so it never expires. Simply renewing ahead of time. Set a calendar reminder to be a step ahead Be cautious of emails or letters that create a sense of urgency or threaten to cancel your domain name registration. Verify the authenticity of the email or letter by contacting your domain registrar or reseller directly. Use secure payment methods when you register and renew your site or domain name. Avoid Mail that contains your physical mail address. Address customer concerns by contacting customer support. Monitor your domain name registration and renewal dates to avoid missing important deadlines. Consider adding auto-renew as a double check for registering your asset before it expires. Use domain locking to prevent unauthorized transfers of your registered assets. Keep some money in the registrar account in case you have an issue with your credit card when you pay. Keep your contact information private by using a domain name privacy or proxy mail service. By following these tips, you can reduce the risk of falling victim to domain scams and protect your online website identity for your domains.   Reporting Domain Scams to Your Domain Registrar If you suspect that you have been a victim of a domain scam, it’s essential to report it to the relevant authorities. Here are some steps you can take: Report the scam to the Federal Trade Commission (FTC). Share the information about the scam on social media to warn others. Use the social media links provided to share the post. Report the scam to your domain registrar company such as Network Solutions. Contact the Internet Corporation for Assigned Names and Numbers (ICANN) Complaint department and let them know about the letter or email. File a complaint with the Better Business Bureau (BBB) if the scammer is a business. By reporting domain scams, you can help prevent others from falling victim to the same scam and bring the fraudsters to justice.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Two professionals looking at documents to imply safety checks when buying a premium domain name
How To Safely Purchase Premium Domain Names

Almost every good domain name you can think of has already been registered – meaning you’ll need to buy it from someone if you want it. NameExperts.com Principal Joe Uddeme explains how to do it the right way.   We are living in a time when there are more active domain names than there were people alive in the 1920s. There are over 1.8 billion websites, and this doesn’t even include the ones that aren’t active. This doesn’t leave a lot of room for you to find an original domain name that will instantly connect with your market. If you want your business to succeed in the online world, you will likely need to buy a premium domain name that is already owned by someone else. Keep reading to learn everything there is to know about premium domains and how you can successfully purchase them – with or without the help of a top domain broker. Key Takeaways Understand premium domains and what they can do for your business Top tips for purchasing a high-value domain name How a domain broker can simplify and streamline the whole process   What Are Premium Domain Names and Why Do You Need One? You want your business to be successful right off the bat, and premium domain names might be the best first step. Here, we discuss what premium domain names even are and share a few tips to help you purchase them. Elements of a premium domain name Premium domain names are short, easy, and highly marketable names that are usually already bought by someone and are available for sale for a “premium” value. They are priced higher than normal domains due to a few factors: They have high marketability thanks to their unique and trendy names that are instantly recognizable by the target audience. Premium domain names tend to be shorter in length and are easier to remember. (Example: Facebook bought “fb.com” as it was used almost as much as “facebook.com”). While not on our list of most expensive domain names ever sold, it certainly commanded a high price. They have optimized keywords that are hard to find in new domain names. They usually end in the popular “.com” extension. There are a few other things to consider and a few criteria that are used to qualify your domain name as premium. The first is if they are generic or single word domain and whether they have a .com or another globally driven brand. They should also be pronounceable and meaningful and should have a desired commercial appeal. Similarly, does the name you want to have a clear path to developmental success or is it random and highly specific? A premium domain might also already have a rich-SEO history and what we call a “white-hat” SEO past. Your domain should be catchy, brandable, and most importantly – scalable. Basically, you’re looking for a timeless domain that won’t go out of style or be easily forgotten. A domain name consultant can advise here, and can prove invaluable when investigating your intended domain name’s past. When you’re looking to add a domain name to your business, it’s important to focus on some of these pointers above if you want to add value and long-term equity to your overall brand. If you plan on selling your business someday, you want to choose a name that can be resold; try and give yourself a little digital curb appeal for if the business doesn’t pan out down the road.   Why Premium Domain Names Are Necessary For Your Business While they’re more expensive, premium domain names offer a range of benefits that often match that price and provide a pay-off in the long term. The first benefit you can take advantage of is a higher reach and resonance with your audience. A memorable domain name will stick in consumers’ minds and create a more credible image around your brand. If they remember your domain name, they’re more likely to search directly for it. Check out our guide to choosing a strong brand name for your business. Premium domains will typically contain relevant keywords that are used frequently by consumers of your chosen business segment. This provides a potential pool of traffic already searching for your domain – readily available for you to access. Premium domain names are not essential when you’re first starting out and do not have a lot of capital. They are often expensive and might be a risky investment at the beginning. Once your business starts growing, a premium domain name will help take your online presence to the next level and open you to a world of new opportunities. The Name Experts team regularly helps provide detailed strategies about great business names to help your startup off the ground. Our Tips For Purchasing Premium Domain Names Buying domain names can be stressful if you do not have much experience with the process. Here are a few tips you can follow to successfully purchase a premium domain. Hire a Domain Buyer Broker with a successful track record. They will help you perform a WHOIS search easily and aid you through the process of your purchase. Make sure you get your broker to sign an NDA to protect your information. Contact the owner professionally. Keep a list of alternatives. Be honest and flexible in your negotiations. No one wants to deal with dishonest or overly-rigid buyers. Ask your broker any question that comes to your mind. Why Choose a Domain Broker for your Premium Domain Name Purchase Though this is a quick and general list, we highly suggest reaching out to an experienced broker to help you with the process. A well-established firm like Name Experts offers a full-service domain name brokerage experience for clients. With over 16 years of industry experience and a proven track record (including helping Monday.com to rebrand), we can help you buy a premium domain name your business needs to boost its online presence. We’re highly skilled at tracking down and reaching out to owners of off-market domain names, as well as negotiating the best price for our clients. Buying high-value domain names is a process, and our services ensure that you’ll get the best deal with the least fuss.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact him at: [email protected]

Google screengrab for article about domain names
How Do You Create a Strong Brand Name (And Secure the Domain Name to Match It)?

From Amazon to Coca-Cola, strong brand names have helped propel businesses to stratospheric heights for centuries. Here’s how to find one that will take yours to the next level and ensure you have a domain name that supports it.  

Why Work with Name Experts

Name Experts offers personalized domain brokerage services, assisting clients in buying or selling premium domain names with expert appraisal, negotiation, and complete transaction management while ensuring confidentiality.

Some of our most
successful stealth acquisition and sales

Aid.com

Fit.com

Mine.com

GLD.com

Jeff.com

Fora.com

Nori.com

Secure.com

Guitar.com

F*ck.com

Radian.com

MetaData.com

Prize.com

Link.com

Loop.com

Programs.com

Claim.com

Quince.com

Hook.com

QXO.com

NQ.com

Rest.com

Humani.com

Max.com

Need help buying or selling premium domains?