When buying a domain name you need to complete your due diligence. Just like any major purchase, make sure you know exactly what you are getting and if the domain is worth the investment. More than one person has found himself or herself on the wrong end of a bad deal. Follow these four steps and you will avoid many of the biggest problems domain name buyers run into. Domain name due diligence can be a tedious and lengthy process, but it will also help you protect your investment.
One: See What Has Been on the Domain in the Past
Many domain names have been around for years and have hosted a variety of different content. You want to make sure none of the previous content is going to cause you any problems. If you have a software company but the site was previously an adult site or a gambling site, you may want to think twice about the domain. You don’t want the past history of a site to distract from your business. Another issue to look for is any evidence of scammers using the site. If your domain shows up in forums as a scam you are buying that baggage when you buy the domain.
Two: Uncover the SEO History of the Domain
Just like you ask your friends for their opinions when you are buying a car, you want to see what Google and Bing think about the domain before you buy. If your site isn’t indexed on the search engines that is red flag. The domain has some type of penalties and cleaning up those penalties may require a lot of extra work. The site may also have a lot of links that are going to be irrelevant to your business and may end up pulling your page rank down. If you are buying the site for the traffic, you want to make sure the traffic to the site is legitimate and a long-term trend. It is easy to fake traffic and produce a spike for a few weeks or months. You want to see that both the reputation and the traffic to a site have been steadily growing over the loing-term.
Related to SEO issues are email blacklists. The domain name may rank in the search engines, but still be on an email blacklist. It is difficult to get off of an email blacklist as in the past spammers have claimed to be the new owner of a blacklisted domain to try and get it off the list so they could use it to spam again.
Three: Check for Trademark Issues
You want to do a trademark check for the domain name. If one of your competitors has a trademark or similar trademark for the name you are looking to buy you could find yourself in a lot of legal trouble. Even if the trademark owner appears to be defunct, if the copyright is still valid, it may still be enforceable. You don’t have to be in the wrong to have a trademark lawsuit cost your business a lot of money. If there are potential trademark issues, but you still are interested in the domain speak to an intellectual property attorney and make sure you understand your options and the risks.
Four: Get a Valuation of the Domain
You would never buy a house or a business without first having an appraisal. No matter how good you are at domain name investigations it is always a good idea to have another set of professional eyes look over the value of the domain name. You want to make sure you aren’t missing anything. Having a domain name valuation done will give you peace of mind and make sure you have solid evidence in your corner when it comes to negotiating the price of the domain name, Whoever controls the information will control the negotiation.
While performing due diligence you will likely find things about the domain name that will influence your opinion of its price and value. Don’t be afraid to walk away from a domain that has too many red flags. The only thing worse than missing a good deal is making a bad deal.