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Domain name brokers FAQ


Selling and Leasing Overview
Once registered, a domain name is the property of it's owner.  Like other forms of property (real estate, for example), domain name ownership can be transferred between owners who may agree to pay for this property transfer.  Selling a domain name, therefore, is very similar to selling a house or a car.

Like selling your house, you have two main options for selling a domain name that you currently own:

  1. Contact potential buyers directly; or
  2. Use a domain brokerage or listing service.
We'll review these options in more detail below and provide a summary of the process for transferring domain ownership

In addition, the leasing of domain names is becoming a popular and simple alternative to selling names.  You will find more information on this topic below as well.

Finally, see our WARNING about restrictions on selling .info domain names registered on or before August 31, 2001.

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Transferring Domain Ownership
The legal registrant of a domain name is the original Administrative Contact listed at the time of registration, regardless of whether the Administrative Contact information has been changed since then.  If the administrative contact information has been changed since the original registration, the most recent administrative contact information entered will be visible in the WHOIS record. However, this information may not be that of the actual registrant of the domain name.

In the event that you would like to sell your domain name, the only way to legally change the registrant information on file is to undergo an official Transfer of Registrant with your registrar. Simply editing contact information (such as Organization and Administrative contacts) does not constitute a Transfer of Registrant.

Registrars typically charge a fee -- often comparable to new registration fees ($25-$35) -- to transfer domain registrations, so consider this cost when selling a domain name.

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Direct Contact
The WHOIS service makes information about who is responsible for a domain name publicly available.   Based upon the contact information from a WHOIS look-up, you are permitted to contact the owner of a domain name.  One viable, though labor intensive, approach to selling your domain is to contact the current owners of related domain names.

For example, if you own the domain name "autoloans.com" you might try sending an email to the Administrative Contacts for "loans.com" (or even several bank domain names) and indicate your interest in selling your domain.  From that point forward, you are free to negotiate for the purchase of the name and arrange for ownership transfer.  See Transferring Domain Ownership for more details.

We recommend working with a professional broker or a knowledgeable attorney to facilitate any transaction that results from directly contacting another party unless the purchase price is below $500.

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Domain Brokers
Brokers connect buyers and sellers of domain names.  Most brokers facilitate these transactions through an automated online listing or auction service, although others work on an individual basis with buyers and sellers.  While sellers can often list their names for free, most brokerages earn commissions on any sales, generally 5% to %20 of the purchase price paid by the seller. 

In addition, most larger domain brokers provide an escrow service which holds purchase funds from the buyer in a trust account until the official transfer of ownership has been completed and verified.  Brokers may charge between $100 and $300 for this service and in many cases the service can be used independent of the listing or auction services.

Many brokers also provide free parking for domain name sellers and fee-based appraisal services to assess the value of a particular name.

Some websites, called domain listing services, allow users to list and sell  their domain names free of commissions.  These listing services commonly route purchase offers directly to the seller's email address.  While free, listing sites often lack the professional and complete services offered by a broker, and provide no legal protection for buyers and sellers.

One important note:  some brokers require a seller to agree to list their domain name exclusively with that broker for a defined period of time -- often 3 to 6 months.

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Parking
Some brokers and listing companies provide domain parking services which create a single web page to advertise the sale of your domain.  This page is then displayed when a WWW user enters your domain name into their browser.  Since parking promotes your domain name and the brokerage itself, many companies offer this service for free -- so-called "free parking."

Your domain parking web page usually allows an interested buyer to make a purchase offer in one of two ways:

  • offers are emailed directly to you; or
  • offers are communicated to you via the brokerage.
Naturally, most brokerages that provide parking services route offers through their web site in order to maintain control of the purchase process.

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Leasing
Leasing is an alternative to selling domain names in which rights to use of the domain are rented for a defined period of time.  Leasing a domain name is much simpler, faster, and cheaper process than selling since no Transfer of Registrant is required.  Rather, the you just change the DNS information to point to the renter's server.

For the lessor (the domain owner -- you), leasing is an appealing option to selling since you retain total control over the DNS information.  If the lessee (renter) does not pay their rent, the DNS record can easily be changed to prevent further traffic to the lessee's website.  Despite this control, it is advisable to have a solid lease agreement in place.

Many different types of lease agreements can be used and we suggest you use an attorney or professional broker to draft the contract. The following are points to consider when developing the contract:

  • Term - How long will the lease be? Terms may be as short as month-to-month up to several years.  You should also consider specifying options for additional terms (like a 1 year lease with two 1 year options) and the rent amount for those terms.
  • Purchase Option - Does the lessee have an option to buy the domain name at anytime during the lease, and if so at what price?
  • Loyalty - Are you allowed to sell the name if you receive an offer from a third party while your lessee is renting?
  • Price - What is the rent amount? How frequently is it paid -- monthly, quarterly, yearly?  Is the rent amount fixed for the term of the contract or does it increase over time?
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.info Domain Restrictions
As part of the intellectual property protection incorporated into the launch of the new .info top-level domain, Afilias offered a "Sunrise Period" to enable trademark holders to register their marks in advance of the general public.  Sunrise names have a "created on" date prior to September 1, 2001.

Sunrise names are not currently eligible for ownership transfer as they are locked for up to 180 days following the close of the Sunrise period on August 31, 2001. Additionally, all Sunrise names are subject to challenge until December 26, 2001; current Sunrise domain name registrants may lose ownership of the domain name as a result of a challenge proceeding, thereby making it impossible for them to sell and deliver the name in question.
 
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