discuss If you do use lease to own domain sale listings, how successful is your strategy ?

[Sheogorath]

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

 

[Dane]

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?

 

[Bob Hawkes]

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

 

[Dane]

I just decided to turn the "Lease to Own" option OFF for all of my names except the most expensive ones.

 

[Bob Hawkes]

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.

 

[Sheogorath]

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]

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

 

[Robert27]

As an update - on Dan if you lease to own over 1 year its the standard sales commission but they go up sharply as the term gets longer.

 

[Sheogorath]

Quote from dan.com TOS:
"7.2 Any commissions may be subtracted from the payment, instalment payment or rental payment and, if these payments are not sufficient, from the subsequent payments. In the event that the domain name is purchased in instalments or rented, the commission subtracted will be limited to the secured instalment or rent payment (e.g.: if the commission is 9%, and the instalment price $100, the Contractor only subtracts $9 from the payout of the Provider for each instalment)."

 

[Rgv89]

What if somebody lease a domain and trademark it?

 

[markfromslo]

What if somebody lease a domain and trademark it?

That's a very good question.

 

[ivey]

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.

Your leasing to own the domain name.
It's even better for developers..
because if your projects work you will own the domain
If your project fails- you ca stop paying and close the project without losing thousands on the domain that you will no longer use.

 

[Robert27]

Haven’t really looked closely at this but aren’t the commissions higher eg Dan?

 

[Sheogorath]

Haven’t really looked closely at this but aren’t the commissions higher eg Dan?

The commission is very low.
The sale commission is 9% at dan.com.

As an update - on Dan if you lease to own over 1 year its the standard sales commission but they go up sharply as the term gets longer.

It is still 9% commission.
The buyer picks the period and monthly price that matches their budget.
Sellers could allow buyers to extend payments over 12 months. The new financing tool extends this to up to 60 months and adds a premium if buyers extend payments more than 12 months. The premium ranges from 10% to 30%.
The service fee is added to the total sale price and is equally split between the seller & Dan for managing the transaction.

 

[bobsdomains]

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

 

[enterscope]

I haven't had the best experience with lease to own. I get late payments almost every month, and I have since removed payment plans on 80%+ of my domains. Only domains that are 5 figures or more have payment plans and 12 months max. Most are only 3 or 6 months.

My reasoning is that startups can get funding and buy the domain outright. Or secure their own financing and pay in full, that way I end up with the payment and don't have to stress about defaults.

 

[bobsdomains]

I just decided to turn the "Lease to Own" option OFF for all of my names except the most expensive ones.

Dane, I'd be curious to know the thought process behind your decision. Also, when you say "except the expensive ones," what does that mean in numbers? I'm not challenging your decisions, just thinking it through for me as well. Thx

 

[bobsdomains]

That's a very good question.

Any IP attorneys on this thread?

 

[Dane]

Dane, I'd be curious to know the thought process behind your decision. Also, when you say "except the expensive ones," what does that mean in numbers? I'm not challenging your decisions, just thinking it through for me as well. Thx

Actually, I have since decided to completely turn off Lease to Own, on all names, regardless of price. I switched to having a BIN price plus Make Offer. If I have to suggest Lease to Own to close a deal during a sales negotiation, I can. But I'd rather it be a last resort sort of thing.

What I would REALLY like is a way for a potential buyer to be able to communicate with us by just clicking a button and sending us a message. I'd also like a way to send a message to a buyer who has submitted an offer before having to submit a counter-offer. Currently we have to submit a counter-offer before we can send a message.

 

[Dane]

Agree with this option!

Come to think of it, I would really like to find a way that we could communicate with our potential buyers a little bit better. Anyone know of something similar to Efty but not as expensive?

 

[frank-germany]

What if somebody lease a domain and trademark it?

what if somebody doesn't lease a domain
and trademarks it?