All About Domain Brokers

When you buy or sell a house you hire an expert—a real estate broker.

When you buy or sell a domain, you should consider hiring a similar expert. Domain name brokers can help you acquire or sell a domain name more easily than doing it yourself. They will walk you through the process, tap into their network, and help close the transaction.

Two Types of Brokers

Some brokers will represent you as a buyer and some brokers will represent you as a seller. 

A broker representing you for buying a domain is commonly called a buyer broker. A broker representing you for selling a domain is called a seller broker. 

Just like with real estate, most brokers will represent you on either type of transaction. However, there are some brokers that specialize in just the buying or selling side of domain transactions.

Why You Should Hire a Broker

Many things come up when you buy a house: finding the right home, evaluating it, inspecting it, etc. Domain transactions are no different.

Brokers add many benefits to the buying and selling process:

• Anonymity – This is especially important when buying a domain name. Companies might want to use a buyer broker so that the seller doesn’t know who is trying to buy the domain. A domain owner might ask a large company for more money. A company also might not want it made public that it is pursuing a particular domain because it could tip off their future business plans.
• Pricing advice – Experienced domain brokers can help you value the domain name you’re buying or selling. They use databases of historical sales data, as well as proprietary methods, to arrive at a number. This expertise ensures that you don’t overpay as a buyer and that you price your domain correctly as a seller.
• Network – Domain brokers have a network of buyers looking to buy domain names. This network is one of the most valuable aspects of domain brokers. (Be sure to learn about a broker’s network before hiring them!)
• Negotiating prowess – Buying or selling a domain name can be emotional. When people negotiate on their own, they sometimes let emotions into it. For example, they might feel that the other party low-balled an offer. A broker in the middle can mediate this tension and keep emotions out of it. The broker can also walk the other party through the domain’s valuation.
• Process – Your broker will walk you through the process of contracts, escrow, and transferring the domain name.
• Name advice – Domain buyer brokers can help create a backup plan in case the primary domain target is unavailable. 

Finding and Evaluating a Broker

Domaining.com has a directory of domain brokers to help you get started. You can also search Google for brokers.

Regardless of where you find a broker, it’s extremely important to vet them. There are no licensing requirements for domain brokers. Anyone can start brokering domains by simply saying they are a domain broker.

Here are some important questions to ask before selecting a domain broker:

• Who are some of your previous clients? Can I speak with them about working with you? You can also read about client experiences on NamePros, a domain forum.
• What are some domain names you’ve sold?
• How will you market my domains? Will you do outbound sales? List them for sale on websites/newsletter/social media?
• Will you use an escrow service to complete the sale? Be sure the broker uses a reputable third-party to hold funds; There have been cases in which a broker acted as the middleman for funds and people complained about not getting paid.

Broker Costs

Being a domain broker is difficult. It’s not as easy as listing a domain on the MLS like a house. They have to use their network and considerable expertise to complete domain transactions.

A buyer broker will typically charge 15%-20% of the sales price. This reflects the expertise they bring to the table, their network, and that most of the domains they represent will never sell. (They typically only charge for completed transactions, but some offer different models.)

A seller broker will likely charge a success fee and/or an hourly rate with a retainer. It’s best not to pay a seller broker a percentage of the final purchase price because it creates a conflict of interest—the broker will make more if you pay more. However, fees can be higher for more valuable domains because they usually take more time to acquire.

The Right Kind of Domain

Most domain seller brokers will only work with domains that they think they can sell for $50,000 or more. Some won’t touch domains valued below $100,000.

This makes sense when you put yourself in the broker’s shoes. They don’t make enough money to justify the time required to sell a low-priced domain, especially when you consider that they only get paid for their work if a transaction occurs. 

The price threshold can depend on what kind of work the broker will put into selling the domain. And it’s much lower for domain buyer brokers that charge in different ways than a commission percentage.

Brokers that just plan to list a domain in a broker newsletter or online will accept low-priced domains.

Brokers that only plan to market the domain to domain investors in their network will also accept lower-priced domains.

If the broker plans to do outbound marketing to end-users (businesses that might want the domain), then the domain name needs to be very valuable.

Seller brokers will generally work with buyers that have a budget of at least $5,000.

Explore Your Options

Hiring a domain name broker is a smart move if you are buying or selling a valuable domain name.

If your domain isn’t valuable enough to entice a domain broker, or if you want to try selling it yourself, learn how to sell a domain.