Selling hot air is an art for some.
When one buys a house or a car, that means putting down a deposit or making full payment before being able to resell it.
In the world of domaining, it seems that some people have no scruples and attempt to circumvent this basic rule of commerce: unless you own it, you can’t sell it.
The information gathered so far from NameJet – where the domain was won but not yet paid for – DNForum and CAX.com, points to the fact that the domain in question still belongs to NameJet.
And yet, the person who had the highest bid on NameJet immediately set forth to list it for sale on DNForum and eventually CAX.com
Not only that, but they actually admitted not having paid for the domain yet, claiming being “too busy” to wire the money to NameJet. The domain is not in their account or under their control yet.
This act of selling hot air is unethical and the domainer in question deserves public embarrassment for this “wise-ass” approach to business.
In the coming days, we will keep an eye on this transaction and if there is no payment for the domain all info will be revealed.
All domains I’ve won in pre-release auctions at Namejet get placed into my Enom account with a 45-60 day auction lock status which makes them virtually impossible to flip immediately since they can’t even by pushed to another Enom account under that status.
I’m not sure if the same happens for the standard drop auctions at Namejet or if it applies to this situation you’re describing.
Nameclerk – To get that domain in your Enom account – even with a 45-60 day auction lock – requires the domain to have been paid for. In the case of this seller, he hasn’t yet paid for the domain but parades it on forums and auction venues, hoping to collect a higher fee with which he’ll then fund the NameJet auction fee. That’s what hot air selling is all about.
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Not saying that this is right, but Namejet, Snapnames, and Pool do this all the time when they auction off “pre-release” names on their auction sites, names that are still registered to the original owners, who still have the right to renew.
If we want to talk about cleaning up this biz, let’s start talking about a cleanup from the top on down.
JMHO.
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Ms Domainer – There are terms and conditions pertaining to the process of domain ownership. The domains that GoDaddy, NameJet and others auction are past the expiration, and ownership is in limbo; unless won and paid for, those domains get deleted.
This looks the practice largely used for years by some domainers who buy through seller financing deals or thanks to domain loans and try to resell these domains as quick is possible.
In both case the domain has not been fully paid (in fact rarely more than 10%) when the buyer resell it.
It’s legal and it’s still better than an exclusive sale agreement because no only nobody can circumvent you but the benefice is (insanely) bigger, now you have the risk to not find a buyer so you must finish paying a premium you did not initially wanted for you or decide to lost the amount already paid to avoid more losses. ECOP.com allows to secure such transactions with 100% safety.
Francois – What are you talking about? When I sold my house, the buyer made a cash offer, then signed the paperwork and the house became his. He resold it four months later, making a nice profit.
You can’t sell something you don’t own – period.
This idiot put the domain on the market THE SAME DAY the auction ended on NameJet, without having paid for the domain.
Let me give you a nightmare scenario.
Imagine that you allowed the seller to give the domain to the person who bid on CAX but did not reach the reserve. So the seller makes a small profit, pays off NameJet and he’s fine.
Then within days, the guy who bought it on CAX discovers that NameJet takes the domain back, because the previous owner claimed it back.
Who will be screwed?
It happens the same in the real life and with homes where one purchase a home with a loan and resell it before the normal loan term. The buyer simply accelerate payments to can resell it.
In the case of Namejet.com the buyer can resell the domain while it does not have fully paid Namejet but he will be unable to transfer the domain to the new buyer so the new sale will be cancelled and will never close. Namejet cannot take back any domain he is no longer the owner.
Francois – NameJet can most definitely reclaim a domain. So now you’re saying that it’s ok to peddle a domain you don’t own? Please let me know if it’s ok to sell eCop.com without buying it from you first. We sign an agreement for $20,000 and you can sit and wait for it while I place it on forums and brokers for $50,000. Sounds fair?
Further info:
The domain was won at NameJet on 11/28/2011
The same day, it was placed on a sales thread at DNForum. The same day, the thread was closed because simply, you can’t sell domains on DNForum unless you own them. Ownership is verified by the WHOIS info.
The same day, the same person put it on CAX.com as well. This dual action shows intent to perform an “air sale” without having the domain’s ownership. The rest is bullcrap.
that person is also sending mails to sell this domain, I received an offer of $3,900 on that domain, also some of his domains also running on cax, flippa and many more websites at the same time, you can check his portfolio on cax and you’ll find he is selling them on various places like flippa, dnforum, np etc at the same time, I think this person is trying to flip out domains quickly, many times without owning them.
Namejet cannot reclaim a sold name I think.
Now let’s clarify what I call a sold name at Namejet:
A transaction where the seller has been fully paid and the buyer has received the domain.
On this you and me we are OK I suppose.
Yes we can say that a person advertising a domain where the purchase has not been effective is selling air because there is no guarantee the sale at Namejet close successfully.
Now if his promotion lead to a sale then two scenarios may happen:
a) He does not succeed to close the sale with Namejet to can resell it to the new buyer in a short delay, because for example Namejet does not allow a change of ownership during x weeks.
In this case he will be unable to close the sale with the new buyer and probably the marketplace will close his account (what we do when sales are not honored).
b) He pays Namejet and Namejet has no rule avoiding an immediate flip in this case he can resell the domain to the new buyer and all happen without problem.
So only in the case (a) a problem may really exist:
That the new buyer be frustrated to not be able to purchase the domain and that the seller lost his credibility.
Now to the question if its an ethical practice, I will say that is not very nice for sure and if everybody start acting this way he could quickly become a mess. Now the only one who can really stop such practice is Namejet by putting a minimum delay before flipping (if not already done). On my hand I have no way to know if the domain has already been paid, is been paying, …
Francois – The proper thing to do is to disable that sale on CAX until he proves he has paid for the domain. This way, as we say in the US, you cover your ass 😉
domainggg – Thanks for the info, post links if you have them.
http://www.youtube.com/watch?v=eagu0xg8Irg#t=1m25
OH and namejet can definitely take a name back.
Adam – So if Marc Ostrofsky says jump off the cliff you would?
Namejet does take names back. There have been few incidents where DNF members lost domains that they had paid for.
Marketplace should not allow people to sell names they don’t own. They CAN if they’re brokering the domain.
It looks like the bid on the name has been withdrawn.
100% Namejet (or rather Enom / Network Solutions / etc.) can take a name back even if it has been paid for and transferred into your registrar account. THAT is why there is a 60 day auction lock. Because in some cases the previous owner who let it expire still has an opportunity to pay a large “fee” and renew the domain.
This has happened to me on several occasions. The one I most clearly remember was with the domain name “IceCleats.com”. I purchased this domain on NameJet for a few hundred dollars. I started building a website for it as soon as I got the domain.
About 10 days later without notification the domain was pulled out of my Enom account and given back to the previous owner. I received a refund for my purchase amount, however, I lost the money I spent on development and there was absolutely nothing I could do about it.
SO – POINT IS: Nobody should be selling domains they bought within 60 days of acquisition on NameJet / Snapnames (expired auctions) – ESPECIALLY if they have not even paid for it yet. SOMEONE IS GOING TO GET BURNED.
Andrew – Thank you very much for your valuable feedback. That’s why domain flipping is dangerous when the timeframe between the acquisition and the sale is short. It’s “buyer beware” at all times! Buyer should ask questions and seller must disclose all such info to avoid nasty situations.
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As long as an owner of an expired domain has the right to reclaim their domains, then the auction sites should refrain from auctioning them, that is, until former owners’ rights have expired.
I won a domain on Namejet that was reclaimed by the former owner. Fortunately, it was not a must-have, but what if I had planned my business on that domain? What if I had already started using it for my business? At least Godaddy is up front and does not release the domain to the winner until former owner rights have expired, but it’s still a sleazy practice.
In other words, the auction sites should wait until the 42 days past expiration have passed (or whenever the former owner’s rights have expired–still not clear to me).
What’s the big hurry, anyway?
For now, it’s buyer beware, but I’m sure that if a Cax sale goes south, and a buyer gets burned, Francois will cover the buyer’s loss, no?
😉
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Perhaps the question should be: why does CAX allow a domain to be listed without proof of ownership?
@Lucius I am posting that to show you what is being preached. Just saying.