Received an offer under "unusual" terms!

[wisconsin]

Hello,

A buyer offered to buy one of my domains under the following terms:
Any feedback is greatly appreciated!

Please read below communications/emails (JOE=Buyer)


“JOE” wrote:

Interested in this domain for a personal project.
How does $250 sound?

On Apr 2, 2005 1:48 PM, “I” wrote:

I have to decline your offer! It's very low!
Regards,

“JOE” wrote:

Hello,

Thank you for responding.
What price do you have in mind?


I wrote:

I may consider $3k or best offer. I think it's a fair price for
such a valuable domain..... Do you own the .NET?

“JOE” wrote:
No. I don't own those other domains.
Thanks for your response. This is a personal project and $3K is
out of my range. Sorry.

”I” wrote:

What's your top offer?


“JOE” wrote:
I'm not sure this project will pan out. If it doesn't, anything I
Pay is too much personally. If it does, I can pay more.Well, perhaps we can work it this way: I can pay you $150 now to option the domain for 6 months. You'd agree to sell it only to me for that period at an agreed upon price of $1500. If it looks like I'll be able to use it in this project, I'll pay you $1500 for it sometime within that 6 months (less the $150 option fee).
Does that work for you?

“I” wrote:

I never done this before.... but I will agree to the total of $2k:
$250 now and the rest within 6 months. Are you, first, going to use
the domain for 6 months or not?

“JOE” wrote:

If you will agree to $150 now/$2000 total/6 month term, I will not
ask to use the domain during the option period. But if, during the 6
months, I get to the point where I'm ready to use the domain, I'll
have to exercise the option and pay the remaining $1850 in order to
use it.

Does that sound OK?



“I” wrote:

If you are not going to pay $250 now, then I'll have to make it 4
months instead! So these are the following options:

> $150 now and the rest within 4 months OR

> $250 now and the rest within 6 months


“JOE” wrote:

I'm not sure I'll be ready to make a decision within 4 months, but
I'll do $150 for 4 months if you'll agree now to let me extend the
option at the end of the 4 month period for another 4 months for
additional $150 if I need to.



Again, I would appreciate sharing your thoughts!

 

[deadserious]

As long as all you do is switch the name servers to the ones of their choice after the first payment, and don't transfer the domain out of your name until the payment has been made in full, then I would say you don't have much to worry about.

 

[.X.]

I would take no less as down payment than the domain is worth wholesale,There is to much cofusion in the process he is demanding.I would lease him the name,You keep the name reged in your name and you manage the name.Put his nameservers in for the name and let him lease with option buy.I would draw up a contract with a lease to buy option,If he really wants it,He will buy it if his project works out,If he fails to pay a lease payment,Turn his nameservers off.To complicated for me,But best of luck to ya.

 

[Mark]

If you really intend to get more than 150 - 250 $ for it - I suggest you tell "Joe" to go find some cash/financing somewhere Else and pay it all upfront ~

How are you planning on setting up the actual control of the domain ? - In other words, who will be in control of it and how over this time period ? .... Too many "If's and Maybe's" for me ....

 

[IdahoFarmer]

Options are a good way of doing business. They are a legitimate business tool.

Sell him the 4 month option for $150.

- If after 4 months he decides the domain is not for him he can elect not to exercise the option and back out. You keep the $150.

- If, however, after 4 months he excercises his option he will buy the domain for $2,000.00 (you need to define if his original option money applies toward the purchase price. I would say no, but it is important that you clarify this with him in writing.)

- If after 4 months he needs more time, he will have the right to extend his option by another four months for another $150. At the end of that 4 month period he can buy for $2,000 or back out and forfeit his $300.


Sounds reasonable to me.

 

[Kenny]

That sounds like the contract has to be very specific and examined carefully to protect you both... 6 months is a long time. Does the final price meet your expectations of the value of the domain and have you had offers in this price range for it?
It seems like a lease/option and if you retain control until the final sale, why not?

 

[armstrong]

Sounds like a legitemate proposal. Happens in the offline business all the time. Before you agree, it would be a good idea to know what exactly he plans to do with the domain. If he plans to do something that might hurt the long-term value of your domain, then you might want to pass. Also, part of your contract should state that if he allows the option to lapse, he then waives all rights to the domain. Without such a clause, a good lawyer might be able to help him build a case of lack of legitemate use with UDRP, and reverse hijack your domain.

 

[wisconsin]

How are you planning on setting up the actual control of the domain ? - In other words, who will be in control of it and how over this time period ? .... Too many "If's and Maybe's" for me ....

I will still be the owner and have full control of the domain! It doesn't sounds like he plans on using the domain during this waiting time nor change the DNS. He just wants to secure the purchase for later on. I think!?



Thanks alot members for all your replies and for pointing -out some great details! I am going to ask him about his plans for the domain. I won't be surprised if he does not reveal his intentions.

 

[WebbyMedia]

It's a great deal for you. If his project pans out then you get paid. If it doesn't then you can park the domain and generate some good PPC revenue.

Just make sure you keep all the control and simply change the nameservers for him.

 

[Midano]

Add something like this to the contract:

"Joe" realizes that "You" remain a legal owner of the domain until the agreed total amount is paid. "You" reserve a right to sell to someone else if that someone else offers more money during the transition period (and refund the downpayment to "Joe").

 

[Badger]

fine with all you have written.....

For such a nominal value, there is no need for contract for your emails back and forth are adequate...

So long as you have 'offer, acceptance and consideration' (which you have) which forms the basis of contract law, then thats enough...

if the deal was more intricate then a formal drawn up contract would be more suitable.

Nice deal

 

[IAmAllanShore]

Nothing fishy, seems straightforward enough.
Go for it, nothing much to lose. If you get other offers in the meantime, you can always tell them to wait and see what happens with the option.
-Allan

 

[wisconsin]

Thank you all for your great insight and feedback!

I sent the following email to the buyer and got a response:

Ok, I 'll do it but I would like to make the following clear:

*I will remain the legal owner of the domain until
the agreed total amount is paid.

*"I" reservethe right to sell to someone else if that someone else
offers more money during the transition period and refund "you" your
downpayment.


He responded:

I can agree to your first point (you will remain legal owner until fully paid).
But I can't agree to the second. That's the point of the option.


I think I am going to agree to it and see what happens!

 

[RJ]

*"I" reservethe right to sell to someone else if that someone else
offers more money during the transition period and refund "you" your
downpayment.

Yes, I think you missed the point of the option with that one. "Options" are used frequently in real estate. You're basically accepting $150 to give him the exclusive right to purchase at a set price within a time frame, meaning you can't sell it to anyone else until his option expires.

Best of luck with your transaction! Sounds like a fair deal to both parties to me.