How buying a domain name actually works

Buying a domain from its owner is a private sale between two strangers, usually for more money than either of them would hand over on a handshake, for an asset neither can hold. Almost nobody does it twice. So the process is unfamiliar every time, and most of the anxiety around it comes from not knowing what is supposed to happen next.

Here is what is supposed to happen next.

The three kinds of listing, and what each one tells you

Almost every name for sale is presented in one of three ways, and the presentation is information.

• A price you can pay immediately. The seller has decided what the name is worth and would rather sell it today than negotiate. The number is the number; there is rarely much movement in it, and asking for a discount on a listed price mostly costs you goodwill.
• Make an offer. The seller has a figure in mind and is not publishing it. This is a negotiation and both sides know it.
• Price on request. The seller wants to know something about the enquiry before naming a figure — usually just that a real person is asking. It is not automatically a trap, and it is not automatically a signal that the name is expensive.

That last one makes buyers suspicious, and the suspicion is worth naming: people assume the price will be set by what they look like they can afford. Some sellers do work that way. The straightforward test is to ask directly what the price depends on. A seller who cannot answer that question has told you something.

Making an offer

Decide privately what the name is worth to you before you write anything. Not what you think the seller will accept — what you would pay rather than lose it. That number is the only one that matters and it should be written down somewhere before the conversation starts, because it will drift upward during the conversation otherwise.

Then make a serious offer. A first offer far below anything plausible is a common tactic and it mostly buys you a slow reply, because it tells the seller you are not really in the market yet.

You do not have to explain yourself. Not your funding, not your launch date, not how much the name matters to the plan, not the fact that the alternative is terrible. None of it improves your position and some of it actively worsens it. A sentence naming the domain and the figure is a complete message.

One thing worth asking about early, before the number is agreed: whether the seller will do the transfer through escrow, and who pays the escrow fee. It is a small amount of money and an awkward conversation to have after a handshake.

Escrow, and why it is not optional

The structural problem of a domain sale is that somebody has to go first. If you pay, you are trusting a stranger to hand over the asset. If they transfer, they are trusting you to pay.

Escrow removes the problem. A licensed escrow service holds the money while the domain moves, and releases it to the seller only once the transfer is confirmed. Escrow.com is the service most of this industry uses; large marketplaces run their own equivalent internally. The fee is a small percentage and it is the cheapest insurance in the transaction.

The sequence is the same everywhere. The buyer pays the escrow service. The escrow service confirms it holds the money and tells the seller to transfer. The seller transfers. The buyer confirms they have the domain in an account they control. The money is released.

Two rules that sound obvious and are broken constantly. Never pay by bank transfer to somebody you have only exchanged emails with. And check the escrow domain in your browser's address bar character by character before you send anything, because convincing look-alike sites exist for exactly this transaction.

The transfer itself

There are two ways a domain moves, and which one applies depends on where it is.

If the seller's registrar is one you also have an account with, the domain can usually be pushed between accounts at that registrar. It is internal, it is quick, and it avoids most of what follows. If the name matters to you and the seller offers this route, taking an account at their registrar for the purpose is often the easiest path — you can move the name elsewhere later, at your own pace.

Otherwise it is an inter-registrar transfer. The seller unlocks the domain at their registrar and provides an authorisation code, sometimes called an EPP code or a transfer code. You start the transfer at your registrar, paste the code, and approve it. Registrars usually add a year of registration to the name as part of the transfer, which you pay for.

The part that catches people out is the locks. Under ICANN's transfer policy a domain can be locked against inter-registrar transfer for a period after it is first registered, and again after a change of registrant details — commonly sixty days. That lock is not the seller stalling. If it applies, either wait it out or use the push route instead, which is unaffected.

Do not plan a launch around the handshake. Plan it around the domain being in your account, with the DNS under your control and email arriving.

After it is yours

• It renews annually, forever. The fee is small and it is not optional, and a lapsed renewal on a name you paid four figures for is a genuinely awful way to find out your card expired. Turn on auto-renew and keep the payment method current.
• Lock it. Registrar lock prevents transfers being started without your involvement. Turn it on once everything has settled.
• Turn on whatever two-factor authentication the registrar offers, on the account and on the email address the account recovers to. The email account is the real key to the domain.
• Consider privacy on the registration record, which most registrars include. It does not hide ownership from a court; it hides your home address from everybody else.
• Point the DNS before you announce anything, and send yourself an email at the new address to confirm mail is actually arriving.

Where deals stall

1. Nobody names a number. Both sides wait for the other to go first for two weeks. Somebody has to; it may as well be you, with a figure you have already decided you can live with.
2. The buyer explains too much, and the price moves. See above: the offer stands on its own.
3. A transfer lock appears that neither side knew about. Ask at the start how long the seller has held the name and whether it is locked.
4. The seller goes quiet after agreeing. Usually a holiday, occasionally second thoughts. A single polite message a week later is the correct amount of chasing.

How it works here

Webba is small and the process is deliberately ordinary. Most names are price on request. You can request the price, make an offer, or ask a question, and a person answers by email, phone or WhatsApp. Every sale goes through Escrow.com, and on Webba's current terms the escrow fee is paid by the seller. The transfer normally completes in one to five days, and Webba handles the authorisation code and the registrar push. Every name sold is covered by a 100% Money Back Guarantee: you get the domain, or your money back. The warning signs worth knowing before any domain purchase are in How to buy a domain name safely.

If you are at the earlier stage and still deciding whether to pursue a name somebody else owns, the pieces on what to do when your .com is taken, and on checking a name before you commit to it, are more use. Both are in the Journal.