information Sold a name now I have it back

[johnn]

Sold a LTO name back in February. The buyer paid 4 months and they don't pay anymore I got the name back.
Not bad for4 months income for doing nothing!

 

[DrJacoby]

 

[bmugford]

Yeah.

I received 10 of 12 payments on a $14k sale.

Buyer defaulted. The domain was returned.

I felt bad about what happened and tried to accommodate the buyer a couple times, allowing them to honor the last couple payments.

They promised to pay, but never did.

I gave them a second chance at least. Many people would not.

Brad

 

[Future Sensors]

I felt bad about what happened and tried to accommodate the buyer a couple times, allowing them to honor the last couple payments.

This unease only deepens when LTO buyers are asked to put down a hefty down-payment. At Atom, you can optionally require exceptionally high down-payment percentages for LTO, which makes me question how fair it would be to cancel with just a small balance outstanding.

 

[bmugford]

This unease only deepens when buyers are asked to put down a hefty down-payment. At Atom, you can optionally require exceptionally high down-payment percentages, which makes me question how fair it would be to cancel with just a small balance outstanding.

The lack of down payment is one reason I don't have LTO enabled at GoDaddy.

There is not enough skin in the game for a buyer.

Brad

 

[internext]

Got 8 of 36 payments for $7,000 each, then they went out of business, and I got the name back. Wish I had gotten more, but $56k for nothing was not a bad deal

 

[fka1080405]

I'm a buyer of lease-to-own, an abandoner of leases and a seller with lease-to-own. I think lease-to-own is an interesting model that has a lot of value but sellers should not look at it as a simple split payment arrangement. A lease-to-own purchase is not equivalent to an outright purchase.

As an end-user, lease-to-own is a great way to de-risk a purchase and avoid tying up capital that could be better used elsewhere: if I regret the purchase, I can cancel the lease. I have bought domains on lease-to-own even though I wasn't sure I would complete the lease.

As an investor, lease-to-own can be a great way to buy an option on a domain name. For example, if I find a domain that I believe is undervalued with a Buy It Now of $10k with a 24 month lease-to-own option, I can "buy" an "option" to sell the domain at just $10,000 / 24 = $416 per month. I might spend 3 months on aggressive outbound (at a cost of $416 * 3 = $1,248) and not secure a sale, in which case, I cancel the lease (better to lose $1,248 than be stuck with a $10k domain). If I secure a sale, great, I buy out the lease and profit.

As a seller, lease-to-own is a great no-effort no-risk way to offer seller financing to end users, an option that is coveted in other areas of business. Seller financing broadens the number of potential buyers. A startup cannot get a $100k loan from a bank to buy a domain name, but a startup could spend $1k/month on a domain. If you do not offer lease to own, you're limiting yourself to buyers that can finance the acquisition themselves.

As a seller, lease-to-own is bad if an investor is using it to "buy" an "option" on your domain. The Atom down payment model is good for preventing this. As a seller, I don't mind much if an investor does this, because I would only list a domain for sale with a Buy It Now if I was already confident that I've exhausted the outbound options, and, if they manage to make a profit, so be it, I'm still getting my list price. I learn a lesson for the future.

Personally, if a buyer defaulted on a lease and then contacted me to rescue the lease, I would always resume the lease, I would not see it as a great way to make some extra money off the buyer's stress, and so I think people who try to accommodate buyers (as @bmugford described above) are doing the right thing.

I like lease-to-own but it does require a nuanced view. My list lease-to-own prices + lengths are based on the worst-case scenario (the buyer will make one payment, do a bunch of outbound and then surrender the lease) but for an end-user I would happily be very flexible.

 

[Ostrados]

I went through the experience twice were an LTO was canceled after 1st payment, I couldn't live with the bad feeling that followed and I had to contact both buyers and refund them. That was 4 years ago and since then I do zero LTO and only offer domains at BIN for peace of mind.

I feel it is unfair that the buyer walks away with nothing, it doesn't feel right me!

 

[johnn]

I have no information of the buyer but you don't have to feel bad because it's not you fault.

 

[Kyle Tully]

I went through the experience twice were an LTO was canceled after 1st payment, I couldn't live with the bad feeling that followed and I had to contact both buyers and refund them. That was 4 years ago and since then I do zero LTO and only offer domains at BIN for peace of mind.

I feel it is unfair that the buyer walks away with nothing, it doesn't feel right me!

If they had leased your name for a month then resold it for 10x your asking do you think they would have felt bad and paid you your full BIN? It's just business, grow some balls.

 

[Higmathers]

Would that just could be solved by an automatic refund policy when purchase got cancelled with proper restrictions and requirements to be eligible for a refund in such a situation. Or saying something stupid with such an seemingly simple solution?

 

[Brother Bob]

Got 8 of 36 payments for $7,000 each, then they went out of business, and I got the name back. Wish I had gotten more, but $56k for nothing was not a bad deal

I felt a sense of discomfort upon reading your expression of wanting more. How do you feel about spending money that you do not earn? If i were in your position, i would consider refunding the amount paid to the buyer or registrar.

 

[pb]

Got 8 of 36 payments for $7,000 each, then they went out of business, and I got the name back.

This is exactly why I encourage buyers starting a business to consider leasing with buyout option instead of purchasing the domain upfront. I don't mean to get some free money and get the domain back - just that we all know the chance of survival for small businesses, so I would feel bad if I sold them an expensive domain and it didn't work out; instead they can pay a small fee to use the domain without any obligation to continue payments if they fail, and with the guarantee of a buyout price if they succeed. I think it's fair and best for both sides.

 

[pb]

Would that just could be solved by an automatic refund policy when purchase got cancelled with proper restrictions and requirements to be eligible for a refund in such a situation. Or saying something stupid with such an seemingly simple solution?

Refund on what grounds? If you lease the domain, you can start using it from day one, that's what the payment is for. There is no reason to refund any payment.

 

[alop]

Could of sold in them 4 months in full payment

So you missed that chance boiiii

 

[Ostrados]

Refund on what grounds? If you lease the domain, you can start using it from day one, that's what the payment is for. There is no reason to refund any payment.

The problem in LTO is it is mixing two different things "Renting" + "Buying"

It is like renting a bike but instead of paying normal renting fees you pay double fees to own the bike after renting it for 24 months.. but if you fail paying one month you lose your money and the bike.

To make things fair the monthly fee for domain LTO should be divided in "renting fee" + "buying installment" if the buyer cancels he should be refunded the "buying installments" and the buyer should keep the "renting fees"

 

[DN_Hunter]

As an investor, lease-to-own can be a great way to buy an option on a domain name. For example, if I find a domain that I believe is undervalued with a Buy It Now of $10k with a 24 month lease-to-own option, I can "buy" an "option" to sell the domain at just $10,000 / 24 = $416 per month. I might spend 3 months on aggressive outbound (at a cost of $416 * 3 = $1,248) and not secure a sale, in which case, I cancel the lease (better to lose $1,248 than be stuck with a $10k domain). If I secure a sale, great, I buy out the lease and profit.

I've had 3 LTO's cancelled (3, 6 and 8 payments made). None of the names were developed, so what I thought happened is they were just buying the "option" to market/sell the name on their own. In this scenario I have zero guilt in keeping the money and getting the names back.

 

[Future Sensors]

I felt a sense of discomfort upon reading your expression of wanting more. How do you feel about spending money that you do not earn? If i were in your position, i would consider refunding the amount paid to the buyer or registrar.

Of course @internext was referring to the lease-to-own running its full term, meaning they’d have collected all 36 × $7,000 payments, not that they wanted to unfairly keep money they didn’t earn.

Also, when you suggest refunding the amount to the registrar, could you clarify what you mean by that?

 

[Joe drake]

Yeah.

I received 10 of 12 payments on a $14k sale.

Buyer defaulted. The domain was returned.

I felt bad about what happened and tried to accommodate the buyer a couple times, allowing them to honor the last couple payments.

They promised to pay, but never did.

I gave them a second chance at least. Many people would not.

Brad

I can appreciate the effort to accommodate the buyer, but if this were a high-demand, one-word .com, I’m not sure you’d be so eager to play the "hero." At the end of the day, if they were only two payments away from completing the deal and still bailed, it suggests that maybe the domain isn't quite the "goldmine" it's made out to be. Most buyers would’ve been more invested once they've already committed that much.


In this business, sometimes we get caught up in squeezing out every last drop, but the market's full of opportunities. The real question is, would you be as charitable if the domain was truly irreplaceable?

 

[pb]

The problem in LTO is it is mixing two different things "Renting" + "Buying"

It is like renting a bike but instead of paying normal renting fees you pay double fees to own the bike after renting it for 24 months.. but if you fail paying one month you lose your money and the bike.

To make things fair the monthly fee for domain LTO should be divided in "renting fee" + "buying installment" if the buyer cancels he should be refunded the "buying installments" and the buyer should keep the "renting fees"

...which is why, as I said, I recommend leasing (usually at 1% of BIN per month) with a guaranteed buyout option. Even if the lessee stops paying after a few months, they shouldn't feel ripped and I shouldn't feel bad. As for instalments (a.k.a. LTO), I only recommend it if someone is sure they want the domain, but just want to spread the cost over time. And in that case if they choose to stop paying and lose the deal, well, that's on them (I had a few such cases when the pandemic hit, but it wasn't anyone's fault, shit happens).