Ownership Verification Still Stinks on Sales Platforms

If you look at the major domain name sales platforms, you will likely come across listings that aren’t legitimate. Sometimes a domain owner makes a typo when listing a domain name for sale, sometimes a domain owner has already sold a domain name and didn’t remove a listing, and other times people are simply messing around for whatever reason and list domain names they do not own. Domain name ownership verification still stinks on many platforms.

GDPR and Whois privacy are two issues that may cause verification issues. I believe most platforms have alternative methods of proving ownership though. In the case of domain names that were once owned by someone who listed a domain name for sale but later sold, I think it’s a pretty big challenge for sales platforms to be able to check the Whois or DNS records on millions of domain names every day to be sure listings remain valid.

Regardless of the reasons for this problem, it still sucks to buy a domain name on a major sale platform and later learn that the listing was canceled because the domain name should not have been listed for sale.

When I see a domain name for sale that I want to buy, I do some due diligence before buying it. I check the Whois record and nameservers to see if I can ensure the domain name listing is legitimate. I may reach out to the registrant to confirm the listing is legitimate or I may reach out to a contact at the sales venue to make sure the listing is accurate. A contact at the platform may not be able to say for certain that a listing isn’t legitimate, but if the seller is a new account in the US and the registrant is a big company in Australia, the platform may investigate further.

Not only is it important for me to be sure the domain registrant actually listed the domain name for sale, but I also want to make sure the domain name was not stolen and listed for sale by a thief. As I wrote this week, I will often make a phone call or two to do the proper due diligence before paying for a domain name so I don’t end up owning a stolen domain name.

If I don’t want to lose out on the opportunity by taking too much time to do due diligence, I may agree to buy the domain name and do due diligence after. The risk is that if I agree to buy a domain name but can’t connect with anyone to confirm a listing legitimacy, I am on the hook to buy the domain name. Of course, if I try to back out, I should be able to see who is selling a domain name. If legitimate, I can try to close the deal. If it is not legitimate, that should be clear, too. I run the risk of reputation damage as well as platform penalties if I back out of a deal that makes me uncomfortable.

It sucks to agree to buy a domain name only to learn that the listing is not valid. Someone might assume that all listings are verified by sales platforms, but unfortunately, that is not the case and it’s always buyer beware.