Recently I shared some insight on Flippa about measures both buyers and sellers can take in order to have a safe transaction. These common sense practices apply not only to the Flippa marketplace, but anywhere that domains and sites are bought and sold. I thought it only appropriate to re-post the information here as well.
=== If you are a buyer ====
1. Read the terms of the sale carefully. Make sure you understand exactly what is included with the sale including the domain, files, responsibility of transfer, server requirements etc.
2. Ask the seller for clarification. Contact the seller to elaborate on any items you have questions on that are not clearly specified or that you need more information on.
3. Do your due diligence. Do the seller’s claims sound reasonable and does the data back it up? In addition to the data provided by flippa, do your own independent research and analysis of the data claims. Don’t be afraid to ask the seller for addition proof of traffic stats, earnings etc. In fact, make it a point to do so, so that you can have some direct personal contact with the seller. Check the whois data to see if it matches the data provided by the seller.
4. Professionalism and History of the seller. Take the time to go through the seller’s feedback history. Contact previous buyers to get their feedback. If the seller has a lengthy sales history, take samples from both recent sales and sales with some longevity so that you are able to get an accurate snapshot of the opinions on the quality of sites, claims and service from a long term perspective as well as a snapshot of the seller’s more recent interactions and quality of service with recent transactions. Pay attention to how the seller responds to inquiries. Are they prompt and professional? Is this someone you would feel comfortable in having to approach with any issues or questions after the sale as well? Are they clear, open and honest in their responses?
5. Use escrow for large transactions. Now that Flippa offers the escrow option as a part of the sales process, it’s even easier to expect to have this bit of protection from a large ticket sale. If the sales price for an auction is substantial and the seller is refusing to use an escrow service, that can definitely be a red flag.
6. Legal representation. If it’s a high priced transaction, then in the best interest of all parties involved it would be prudent to involve an attorney in the proceedings. Many firms have attorneys that are specifically versed in internet related contracts.
7. Contact the seller on the phone. Sometimes an actual, live “person to person” conversation can reveal quite a great deal of information that you wouldn’t necessarily extract through written conversation.
8. Keep a paper trail. Keep the conversation within flippa during the transaction. If for no other reason than to have at least some flippa bannage recourse if things go sour.
9. Use common sense. There’s a reason the saying, “If it’s too good to be true, it probably is” has been around for so long. Don’t let emotions take over in the place of good old fashioned common sense.
==== If you are a seller ====
1. Be clear in the terms of your sale in your auction listing. Leave no room for misunderstandings. Make sure you specify exactly what is included with the sale including the domain, files, responsibility of transfer, server requirements etc.
2. Check the buyer’s profile. How long have they been registered? What kind of feedback do they have? Just because they are brand new doesn’t mean they aren’t a legitimate buyer, but it may be one thing to consider in the greater scheme of things. If this is the case, then don’t be afraid to ask them for references. Request a phone number that you can contact them at. How they handle those requests alone may be some insight as to whether this is someone you want to have dealings with or not. As stated in the points for a buyer the same holds true for a seller – Sometimes an actual, live “person to person” conversation can reveal quite a great deal of information that you wouldn’t necessarily extract through written conversation.
3. Follow-up on past purchase history. If the buyer has had other previous transactions, contact the sellers to get feedback on how this person was to deal with. Contact sellers from recent transactions as well as older transactions. You want to be able to ensure that nothing went wayward after some length of time after a sale, etc.
4. Handle the transaction through paypal as a transaction for physical goods rather than services. You would then need to ship the site data in a physical format to the buyer that includes a tracking number. This way, if a dispute should arise later with the buyer claiming the product was never delivered, you have a tracking number and proof of shipment/receipt by seller.
5. Keep a paper trail. Remember: if it isn’t documented, it didn’t happen. Keep your communication inside flippa during the transaction period so that you at least have some sort of recourse if something goes wrong (i.e. the ability to get someone banned for shady dealings).
6. Legal representation. If it’s a high priced transaction, then in the best interest of all parties involved it would be prudent to involve an attorney in the proceedings. Many firms have attorneys that are specifically versed in internet related contracts.
7. Continuity. It’s good practice to ensure that the email address registered with flippa (as seen in the buyer detail box) is the same email address that you receive payment from.
8. Common sense. Due diligence isn’t only for buyers, it’s for sellers too. Don’t be afraid to follow up with potential buyers to ask them questions as well in order to form some type of opinion of what kind of person you are dealing with. Consider also risk and reward.. meaning, you may be more willing to take a risk on a new buyer for a smaller priced auction listing than a larger one and on the contrary, if it’s a larger priced sale or one that you feel more ‘protective’ of then trust your instincts and be more selective of the bids you approve.
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And a few other good practices in regards to having a safe transaction, aside from the monetary aspect…
For sellers: Use temporary passwords when giving someone access to your server. Restrict their access to only the actual areas and programs they need. As soon as the transaction is completed, remove any temporary user accounts created or change temporary passwords to restrict access.
For buyers: In the case where the seller is installing the site, grant access to only the area needed (i.e. not your entire server and all your sites, but only to the one site account that they are transferring files to). Set a temporary password so you keep your regular password secure. Change the passwords to the sites you purchased and update it with your personal information as applicable (ie set the admin email to your email, ensure your contact information is accurately reflected for the domain name).
There’s always more, but that’s a good start.
