If you want to buy a domain someone already owns, you’ll likely need a domain broker service. Finding the owner of the target domain and negotiating a deal can be hectic if you don’t seek professional help. A broker makes the process easy while you focus on other endeavors.
Let’s say you want to start a new online business and decide on the perfect name. You hop onto a domain registrar only to learn someone else registered the domain name a few years back. Who is the owner? How do I contact them? How will I get a fair deal if I find the owner? These are typical questions that pop up, highlighting why you should use a domain broker.
If you’re thinking about negotiating the deal yourself, consider these questions:
- Is researching for information about a domain’s owner the most productive use of your time?
- Are you a persuasive negotiator who can convince the owner to sell their domain at your desired price?
- Are you sure about getting a fair deal and not being taken advantage of?
If you have positive answers to the above questions, you can go ahead and negotiate an acquisition yourself. Otherwise, hiring a domain broker to smoothen the process is the best choice.
Before diving deeper into why you should use a domain broker, let’s examine what a domain broker service is and how it works.
What is a domain broker service?
Domain brokers are professionals who help you acquire a domain someone else already owns. The broker handles the following:
- Finding the owner of the domain name. This task isn’t trivial because many domain owners choose to hide their information from the WHOIS database. However, brokers can check other sources like securities filings, real estate records, business registration records, and corporate databases to identify the owner of the domain name you want to buy.
- Negotiating a fair price. Brokers are skilled and experienced domain name negotiators. They’ll help you acquire your target domain for an optimal price. Meanwhile, negotiating by yourself carries the risk of overpaying for a domain.
- Legal documentation. The broker takes care of all the legal paperwork needed to acquire the domain, escrow, and the final transfer into your registrar account, saving you a lot of stress.
How does a domain broker service work?
A domain broker service is an intermediary between a domain buyer and seller—the internet’s version of real estate agents. The broker can represent you as a buyer while keeping your identity anonymous.
Like most intermediaries, domain brokers charge a commission on every deal they negotiate.
Domain brokers can also represent sellers. If you own a domain you want to sell, a domain broker can help you find a buyer at your desired price. Of course, they’ll collect a commission for their service.
How much does a domain broker cost?
Domain brokers charge a commission on all sales plus some additional fees. A typical domain broker service takes an initial acquisition fee plus a 10% to 20% commission when they close a deal. The initial fee formalizes your interest in acquiring the domain, and the broker goes to work researching the owner and negotiating a deal. They take a commission for their efforts if they successfully clinch a deal.
But there’s no guarantee that a domain broker will clinch the deal—the owner might not be willing to sell at any cost. In that case, the domain broker might still keep the initial fee for their research and negotiation efforts. Some do offer partial or full refunds if they cannot clinch a deal.
How to choose a domain broker service?
It’s necessary to vet any domain broker before enlisting them to help you buy a domain. The last thing you want is to use an unskilled domain broker who’ll likely never clinch a deal or, worse, could cheat you.
Before diving into why you should use a domain broker, here are some tips for choosing a domain broker:
Do your research
Always carry out due diligence to determine if a broker matches your needs. A domain broker isn’t a licensed profession, so the market is flooded with both skilled and unskilled people. It takes due diligence to sift the experts from the non-experts.
You can check domain industry publications like DomainNameWire.com or DNInvesting.com to discover the best domain brokers. Escrow.com is another valuable website that helps you find the best brokers.
Check customer reviews
After narrowing the list of the brokers you can work with, check customer reviews to see what past clients say about them. Check reputable review sites like Trustpilot and G2 to get honest reviews. Most brokers also post testimonials on their website, which you can then verify via other sources.
Ask difficult questions
Don’t hesitate to contact a broker and ask them the hard questions. You’re about to enter a valuable business deal with the broker, so you need as much information as possible to make an informed decision.
Typical questions to ask include:
- Can you share references from your past clients?
- What is the exact breakdown of your fees?
- What notable domains have you acquired?
- What’s your acquisition process like?
- Can you handle complex negotiations and work with lawyers when necessary?
- Do you represent both sides of the transaction?
Other questions to ask include:
Who have you worked with in the past and can I speak to your clients?
Speak with a current client to understand their experience. It gives you a clearer picture of what to expect.
Ask for the contact information of clients for the domain names they’ve brokered. How was their experience with the broker and were they satisfied with the service?
Use Whois to crosscheck that references match the seller and buyer email addresses. This ensures that the broker isn’t giving false information.
Sometimes, clients have strict NDA’s in place that make it impossible to release client names, but a buying domain service should have a list of clients they can share with you.
Do you use an escrow service to close deals?
Do not transfer money directly to the broker under any circumstance. An accredited escrow company is essential to facilitate a domain name transaction between buyer and seller.
Escrow.com is the industry standard in domain brokering. There are other reputable domain name escrow companies such as Epik.com that facilitate transactions.
What is your commission and how long is your exclusivity period?
Domain brokers offer different exclusive terms and conditions. Most terms range from 30 – 120 days or more depending on the brokerage firm. Additionally, commissions for domain buy services range between 5% – 20% depending on the value of the acquisition.
Benefits of Working with a Domain Broker
1. Secure Transaction
When buying a domain name, a secure transaction is essential. A domain buy service ensures the transaction is completed successfully while minimizing your financial risk.
Some domain broker services also provide additional security features to protect your domain from bad actors with tools like registrar domain locks.
2. Sticks To The Budget
Experienced domain name brokers help you value the domain name you want to buy. They use a database of proprietary methods and historical sales data to arrive at a realistic budget. Their expertise ensures you’re not paying above market rate for the domain you want.
3. Better Negotiation Skills
A reliable domain broker must have negotiation skills, patience, and timing in active negotiation. It’s easy to get emotional very quickly when you’re buying a domain name without help. The domain broker acts as a buffer between buyer and seller to keep emotions out of it.
Emotional detachment and a neutral diplomatic approach facilitate a smoother transaction for the buyer and seller.
4. Protects Your Anonymity
Anonymity is important when buying a premium domain name. Most customers use a domain broker because they don’t want the seller to know who is buying the domain as that could drive the purchase price up.
Companies also don’t want it made public that they’re trying to acquire a domain name as it could alert their competitors to future growth plans.
Your domain broker keeps all details confidential and works in good-faith to protect both parties involved.
5. Established Network with Some of the Largest Domain Owners
With nearly 2 billion registered web domains, finding a great domain is like locating a needle in a haystack.
However, this is where reputable domain brokers can help. They have relationships with larger domain name investors and portfolio owners to deliver a range of options to fit your specific acquisition needs. These connections are also valuable in securing a better price for you.
An inexperienced person might spend weeks or months looking for a domain without luck but an experienced broker knows how to cut through the noise and find one quickly. The time saved plus efficiency make all the difference in reaching your business goals.
6. A Deeper Knowledge of the Market
Since market trends and popularity fluctuate weekly, a deep understanding of the domain marketplace ensures you don’t overpay for a domain name.
For buyers, domain brokers educate you on the available options on the market and how these domain names will benefit your business. The information prepares you for the transactions, helps you manage expectations, and budget properly
In an event where the primary domain target is unavailable, a domain buy broker assists you to create a backup plan.
7. Handles Paperwork and Domain Transfer On Your Behalf
If you don’t have experience buying a domain, there’s a good chance you don’t know how domain escrow works.
When the deal is complete, a reputable domain broker provides you with all relevant information and paperwork related to your domain transfer.
Not only can a broker oversee the process, but they also ensure that the domain transfer is completed in the safest manner possible.
