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Sheogorath

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Hello everyone,
I noticed that there are many lease to own listings in dan.com and that many people in the Domaining industry adopt this sales strategy.
I'm considering to change some or all of my sale listings to exclusively lease to own type due to a possible much higher sales rate.

If you do use lease to own in dan.com or on other marketplace/s, please describe how successful it is for you compared to the traditional make an offer and/or buy now listing types.
Also, did you encounter any difficulties or problems from lease to own listings ?
Do most or all buyers pay in time ?
The domains were not devalued from a possible improper usage ?

Please share your thoughts, thanks :)
 

Sheogorath

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As a developer I would never be interested in renting any domain.

Why? You put all the best effort to go up a proyect with a domain that is not me. The power for all proyect stay in the domain name.

Thanks for sharing your opinion.
Yeah, I realize that some developers may not like the idea of leasing a domain, it is part of the reason why I opened this discussion, to learn about different views regarding this subject.
 
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Sheogorath

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It makes sense if its a particularly high value domain, then lease options may be sensible (even equity in the business itself, if its promising). Outside of this, outright sales is the way. It depends on the domainer

IMO

Yes. It makes sense that the higher the value of the domain the higher the installments.
In my opinion probably worth it for mid 5 figures USD domains and above.
 
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I think lease to own as an OPTION (along with instant buy) makes total sense. Especially for cash strapped startups, it can provide a way to get a good name and pay for it as their business proceeds.

While there may be limited cases where it makes sense, I am surprised that end users would want to rent a name, though, since as @Intop says above, why put all the effort into developing and promoting a name you do not own?

Bob
 
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Sheogorath

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I think lease to own as an OPTION (along with instant buy) makes total sense. Especially for cash strapped startups, it can provide a way to get a good name and pay for it as their business proceeds.

While there may be limited cases where it makes sense, I am surprised that end users would want to rent a name, though, since as @Intop says above, why put all the effort into developing and promoting a name you do not own?

Bob

If I understood it correctly, the lease to own means that the domain owner is obligated to transfer the domain to a third party marketplace's registrar account and once all installments are complete(for example 12 months) the third party must deliver the domain to the end user who leased the domain.
So basically, as long as there was no violation/s of the leasing agreement the domain will be transferred to the one who leased it.
So there is no worry about not being able to use the domain in the future.
It is just divides the buy now price into installments and thus it opens the domain to a far larger end users group who can now afford to buy the domain over time.
 

Lord Antares

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It is just divides the buy now price into installments and thus it opens the domain to a far larger end users group who can now afford to buy the domain over time.

Yes but it often ends up with the buyer giving up on the domain after the first installment. A lot of BIN purchases (usually for under 10k amounts) are impulse buys which they will not end up paying for with installment or make offer. This is the entire basis of the Afternic fast transfer network.

I have enabled installments by default because I'm assuming they will bring me more good than harm, but I can't be sure about that.
 
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So there is no worry about not being able to use the domain in the future.
Yes that is right and that is why I said that lease to own is a good option. If they buyer keeps making payments, ownership is transferred when payments complete. If they stop paying, the domain goes back to control by owner, along with payments already made, minus commission. Your post title is on lease to own, and I think that is wise.

But the reply from intop mentions rentals, another option.

Some places also allow to offer a rent option. Dan used to, I am not sure if it is still an option under Dan 2.0. Epik still offer rental or financing (lease to own) options. Rental is something different. Under that there is a monthly payment, but it is to rent the domain name, not to ever own it. That is what I said was not, in my opinion, in the best interest of the buyer in most cases. An exception would be some sort of short term need, but I have difficulty thinking of many realistic cases.

DS were talking about sale, lease and rental options for domain names at least as far back as 2011, so the idea or renting or leasing is not new, although has become much more common since Dan.

So we are in agreement on lease to own.

Bob
 
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Sheogorath

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After giving this some thought... my only concern is... What if the buyer just wants to "test" the name? Technically, he can just make 1 or 2 payments, then walk away. Right? Or no?

It is one of the possible issues from lease to own agreement.
Unfortunately nothing prevents the buyer from defaulting on the transaction.
All payments made to date are kept by the seller and the domain is returned to the seller and can be sold again.
At least that's how it is on dan.com.

Yes but it often ends up with the buyer giving up on the domain after the first installment. A lot of BIN purchases (usually for under 10k amounts) are impulse buys which they will not end up paying for with installment or make offer. This is the entire basis of the Afternic fast transfer network.

I have enabled installments by default because I'm assuming they will bring me more good than harm, but I can't be sure about that.

I agree.
Yeah, I may enable lease to own as well.
For $50K-$100K+ domains it may be more safe since the installments will be far higher and thus the commitment will be greater.
I think the risk can be mitigated somewhat by limiting the installments.
I have not yet decided if to set the maximum installments to 6 or 12.
Leasing for an entire year looks a bit too much in my book, the buyer may back off.
If it is 6 months, the buyer has less room for regret.
 
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What if the buyer just wants to "test" the name? Technically, he can just make 1 or 2 payments, then walk away. Right?
Yes they can, and I think a substantial percentage do exactly that from anecdotal reports on social media.

That is why NB and DNJournal will not report payment sales until all payments are complete.

From the buyer perspective, that is a major advantage. For the cost of a few months, they can secure future rights to a name.

From the seller perspective, yes disappointing when the payments are defaulted, but you still have the name and whatever was paid minus commission.

In many cases, without the payment plan, you would not have had that sale at all. And some of them do keep paying.

Bob
 
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I’m trying to buy a domain right now by making monthly payments, money is really tight, and sometimes I pay a little late, but I would never have bought the domain straight up; my offline business took a huge revenue drop last year.

And if I fail, if I can’t make a payment the seller gets to keep all those payments and gets the domain back. So I can see where a seller would not mind reselling a domain 2 or 3 times via this process, lol.
 
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wwwulff

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I have sold 6 names through brandsites via the lease to own model (1 BB - 1 SH - 4 BP) - 4 of them were paid in full, 1 is still in progress and 1 was canceled after 3 payment out of 6 (price 5.5K) - The strange thing about the one that was canceled was that they canceled it the day after they paid 3 installments (I ended up receiving 2.1K and got the name back) - I have a 6 month lease to own option on most of my names and I think some of the names sold because that option was there, so it is a good opportunity to increase the chance for a sale.
 

Future Sensors

78% of human domainers will be replaced by robots
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From the buyer perspective, that is a major advantage. For the cost of a few months, they can secure future rights to a name.

Correct. And a sub-set of this group will regrettably use your domain for spam runs or worse.
 
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Correct. And a sub-set of this group will regrettably use your domain for spam runs or worse.
While possible, the lease to own wording I have read is fairly tight.
Also on social media have heard anecdotes of a number stopping payment, but don’t recall any reporting abuse.
 
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Future Sensors

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While possible, the lease to own wording I have read is fairly tight.
Also on social media have heard anecdotes of a number stopping payment, but don’t recall any reporting abuse.

Some reputation related risks are discussed in this thread (you were already aware of the thread, just sharing here for others) - https://www.namepros.com/threads/domain-leasing-risks.1171181/

I'm offering lease to own options only for higher priced domains (monthly amount is no small amount). I use this as a treshold to exclude certain groups of buyers.
 

wwwulff

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I would never use lease to own on my best names because an eventual abuse would mean something financial - As I tell above, I have had 6 sales via lease to own and only 1 was canceled after 3 of 6 payments (all names was in the xxxx range) and if that name had been misused then it would not mean anything economical to me (bought for $20 here and sold for $ 5.5K via BP) but it would if it was a high xx.xxx or xxx.xxx name - I have not yet heard from anyone who has had their names misused via the lease to own model.
 
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Sheogorath

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I would never use lease to own on my best names because an eventual abuse would mean something financial - As I tell above, I have had 6 sales via lease to own and only 1 was canceled after 3 of 6 payments (all names was in the xxxx range) and if that name had been misused then it would not mean anything economical to me (bought for $20 here and sold for $ 5.5K via BP) but it would if it was a high xx.xxx or xxx.xxx name - I have not yet heard from anyone who has had their names misused via the lease to own model.

Limiting the installments to a small number, like 6, does mitigate some risk.
For $125K domain, $20.83K per installments is large enough of commitment.
I think most buyers wouldn't risk devaluing the domain when paying that much.
Even 7 figures USD domain can have installments.
I noticed an ultra premium domain that is for sale for a mere sum of $2M on dan.com, only 6 installments of about $333K per installment.
I have no idea why he asks only $2M, it is an 8 figure domain for sure.
 
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Here is the relevant text of the Dan own to lease program contractual terms. It also sets a penalty of needing to immediately pay the entire amount within the agreement, plus lose access to the domain. Note that black hat use, spam, malware, etc. are all specifically covered.

Despite the exhaustive wording, if I had (I don't) a domain name worth $100,000 or more I would probably be hesitant to go into a lease to own. But for the typical $1000 to $2500 names I have, with a STR of maybe 1 or 2%, I have zero concern about lease to own with these safeguards. Sure, still some chance domain name will be damaged, but the odds of my selling the domain name in the next 5 years are maybe 7%, and the value that represents at a net selling price would be .07*1800=$126. I am getting more than that in the first month of the payment plan.

the Transferee is banned from using the domain in case such use:
  1. is in breach of any applicable law, statute, regulation or law;
  2. is fraudulent, criminal or unlawful;
  3. promotes racism, bigotry, hatred or physical harm of any kind against any group or individual;
  4. infringes or breaches the (intellectual property) rights of any Third Party;
  5. contains video, audio photographs, or images of another person without his or her permission (or in the case of a minor, the minor's legal guardian’s permission);
  6. provides information on any illegal activity (including, but not limited to, instructional information on acquiring or fabricating illegal weapons or drugs, privacy violations or distributing computer viruses);
  7. publicizes or promotes commercial activities and/or sales without our prior written consent such as contests, sweepstakes, barter, advertising, and pyramid schemes
  8. involves the use, delivery or transmission of any viruses, unsolicited emails, trojan horses or any other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information.
7.4 Notwithstanding the above, Client acknowledges and agrees that any (other) prohibited activity as referred to in Clause 5 above, as well or any other activity which may cause damages to the Provider or the Third Party and/or which may decrease the value of the domain name are strictly prohibited. Such activities include (but are not limited to) the use of aggressive SEO strategies, techniques and tactics that focus only on search engines and not a human audience, and usually does not obey search engines guidelines (black hat SEO), such as keyword stuffing, invisible text, doorway pages, adding unrelated keywords to the page content or page swapping (changing the webpage entirely after it has been ranked by search engines), and the use of the domain name for spam activities.
 
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Sheogorath

Top Contributor
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Here is the relevant text of the Dan own to lease program contractual terms. It also sets a penalty of needing to immediately pay the entire amount within the agreement, plus lose access to the domain. Note that black hat use, spam, malware, etc. are all specifically covered.

Despite the exhaustive wording, if I had (I don't) a domain name worth $100,000 or more I would probably be hesitant to go into a lease to own. But for the typical $1000 to $2500 names I have, with a STR of maybe 1 or 2%, I have zero concern about lease to own with these safeguards. Sure, still some chance domain name will be damaged, but the odds of my selling the domain name in the next 5 years are maybe 7%, and the value that represents at a net selling price would be .07*1800=$126. I am getting more than that in the first month of the payment plan.

the Transferee is banned from using the domain in case such use:
  1. is in breach of any applicable law, statute, regulation or law;
  2. is fraudulent, criminal or unlawful;
  3. promotes racism, bigotry, hatred or physical harm of any kind against any group or individual;
  4. infringes or breaches the (intellectual property) rights of any Third Party;
  5. contains video, audio photographs, or images of another person without his or her permission (or in the case of a minor, the minor's legal guardian’s permission);
  6. provides information on any illegal activity (including, but not limited to, instructional information on acquiring or fabricating illegal weapons or drugs, privacy violations or distributing computer viruses);
  7. publicizes or promotes commercial activities and/or sales without our prior written consent such as contests, sweepstakes, barter, advertising, and pyramid schemes
  8. involves the use, delivery or transmission of any viruses, unsolicited emails, trojan horses or any other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information.
7.4 Notwithstanding the above, Client acknowledges and agrees that any (other) prohibited activity as referred to in Clause 5 above, as well or any other activity which may cause damages to the Provider or the Third Party and/or which may decrease the value of the domain name are strictly prohibited. Such activities include (but are not limited to) the use of aggressive SEO strategies, techniques and tactics that focus only on search engines and not a human audience, and usually does not obey search engines guidelines (black hat SEO), such as keyword stuffing, invisible text, doorway pages, adding unrelated keywords to the page content or page swapping (changing the webpage entirely after it has been ranked by search engines), and the use of the domain name for spam activities.

Yeah, the agreement looks quite extensive & protective of the parties involved.
In any case, I have enabled lease to own for most of my domains, including those I believe to be 6 figures worth.
But ofc, I'm in an uncharted territory, so I will occasionally check domain news about recent problems with lease to own.
Though as of now, it looks like such cases are quite rare.
 

JordanH

Established Member
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As a developer I would never be interested in renting any domain.

Why? You put all the best effort to go up a proyect with a domain that is not me. The power for all proyect stay in the domain name.
You aren't renting. I've done some lease to own both as a seller and as a buyer. I actually don't mind it and think it can do good.

For simple math, let's keep things easy. Say you have a domain for $1,000.
Say someone for some reason can't throw up $1,000 at once for a domain. You then list it for $100/m for 12 months. This they can do. You get $200 more for the domain, they get a domain they can use. If for some reason they stop paying halfway through, You still keep the $600 they spent, but they lose access to the domain, to which you can then try to sell again.

Of course, most of the contracts has conditions while the "Lease to own" is is in effect
 
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