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Seller Using Sedo.com Cancels Important Domain Transaction. What Can I Do?
Is Sedo Partly to Blame for a Pattern of Failed Domain Transactions?
Nova




msg:3693325
 3:46 pm on Jul 8, 2008 (gmt 0)

Hi,

I bought a domain at sedo and paid the same day. Now sedo writes to me that the seller does not want to carry out the transaction... Can they do it? What can I do? The domain name was bought for my business and is important to me.

 

Webwork




msg:3693584
 7:07 pm on Jul 8, 2008 (gmt 0)

Have you read Sedo's Terms of Service? What do they say?

If you haven't read them please do so and report back to us what you learned. I'm sure it will be educational for you and for all the rest of us.

Since it's germane I wouldn't mind reading a sentence or two from the TOS that may relate directly to your issue, but please don't post any large chunk.

Thanks. Now, go forth, read and get back to us if you will.

Laker




msg:3693636
 8:00 pm on Jul 8, 2008 (gmt 0)

Now sedo writes to me that the seller does not want to carry out the transaction... Can they do it?

Two scenarios about Sedo sellers "not wanting to carry out the transaction" ... one from personal experience.

1. The seller is no longer the registrant of the domain. The domain name could have been sold, or could have expired, and the seller neglected/forgot to delete that domain name from their listings.

This is what happened to me :-( I had let a domain name expire, and neglected to remove it from my Sedo listings. One day I received an email from Sedo saying "Congratulations! A buyer has agreed to purchase example.com!"

With a sinking feeling in my stomach, I immediately sent an email to Sedo, explaining what happened, and that I would immediately review all of my listings to be certain they were current. Needless to say, I felt badly about the situation.

Sedo replied, graciously, and advised they would contact the "Buyer" and cancel the transaction. I have no way of knowing what their email to the buyer said.

I would think it is likely that this situation (stale listings) is not an uncommon one.

2. As I understand Sedo's TOS/policies, a seller who "changes their mind" after a binding offer has been made, is labeled something like "uncooperative seller", and is prohibited from some activities on Sedo, such as participating in Sedo-run auctions. (I don't know if they have a "3-strikes" scheme or not.) I haven't read the TOS in a l-o-n-g time, and look forward to your post.

Bottom line: AFAIK, there is no way for Sedo to "force" or compel the 'uncooperative seller' to complete the transaction :-(

Nova




msg:3693696
 8:57 pm on Jul 8, 2008 (gmt 0)

What is the process of selling a domain at Sedo? When the domain goes into action, is the seller informed about it? From what I am reading, once an offer has been made, the domain is out for an action for 7 days. The seller is informed about it and have to either accept or deny it.

If it so, then when I won an action , the seller was aware about the action and agreed to sell it to the highest bidder.

Laker, are you saying that your expired domain was put for an action without your knowledge or was it a "buy now" case?

As for the owner, he is the true and current owner of the domain.

From Sedo FAQ: "Once an offer has been accepted the buyer has a legal right they can seek to have enforced in a court of law. Sellers who refuse to complete an accepted transaction risk having their Sedo accounts cancelled."

[edited by: Nova at 9:04 pm (utc) on July 8, 2008]

Laker




msg:3693726
 9:27 pm on Jul 8, 2008 (gmt 0)

Laker, are you saying that your expired domain was put for an action without your knowledge or was it a "buy now" case?

It was a [stale] "Buy Now" listing.

From what I am reading, once an offer has been made, the domain is out for an action for 7 days.

Perhaps things have changed, however my understanding of the process is, when an offer has been made on a "make offer" domain the seller can either accept it, make a counter-offer, OR initiate a 7-day auction, where the original buyer's offer is the starting bid. If there are no higher bids during the auction, then the (original) buyer gets the domain at the offered price.

I may not have that quite right... and auctions may not be an option where a seller's stated price has been met (or exceeded).

As for the owner, he is the true and current owner of the domain.

In my case, it was likely very, very easy for Sedo to confirm that I wasn't the current owner of the domain -- nor had I been for quite some time. Nonetheless, I felt badly that I hadn't removed the stale listing.

Your points about domains in an auction are well made. I would think there would be little chance of a seller being "unaware" that their domain name was in an auction.

[edited by: Laker at 9:40 pm (utc) on July 8, 2008]

rocker




msg:3694364
 1:51 pm on Jul 9, 2008 (gmt 0)

Nova, is this what happened?

You put in an offer for a domain name, the seller chose to put it in auction, there were no other bids, you won the domain name.

If so, chances are that the seller did not realize that once he put it into auction your price would be the reserve price.

tomda




msg:3694373
 2:06 pm on Jul 9, 2008 (gmt 0)

If so, chances are that the seller did not realize that once he put it into auction your price would be the reserve price.

Could be the reason ? Anyway, I am sure Sedo will sort it out and contact the seller. Be patient and go through the Terms meanwhile.

Webwork




msg:3694381
 2:18 pm on Jul 9, 2008 (gmt 0)

Note: I have edited the original poster's thread title to expand the topic of this thread, from a single failed transaction to address a pattern of failed transactions that has been ongoing for years at domain auction/sales services. I have experienced such a failed transfer at the pre-BuyDomains version of Afternic.

From Sedo's Rules for Domain Sellers [sedo.com]

The following practices are not permitted by Sedo:

Non-selling seller

If your offer to transfer the Domain is accepted, you must complete the transaction with a ready, willing, and able buyer. Accepting an offer constitutes a legally binding agreement and should be given serious consideration. Once an offer has been accepted the buyer has a legal right they can seek to have enforced in a court of law. Sellers who refuse to complete an accepted transaction risk having their Sedo accounts cancelled.

I've been reading reports of failed auctions and failed transactions involving Sedo for years. The most amazing are Sedo's failed big ticket domain auctions, the most recent being the failed auction sale of Pizza.com for $2.6 million dollars. How in heaven's name can an entity hold an auction with such a high public profile without taking steps to assure performance?

I can tell you, based upon my experience with bidding for government projects, how you filter out the riff-raff from the real-deal bidders: You have bidders post a bid bond. IF the bidder defaults in making payment on their bid the amount of the bond is forfeited. So, in the case of bidders who will be bidding in auctions reasonably calculated to exceed $100,000. - have them post a $10,000. bid bond. Auctions calculated to exceed $1,000,000.? Have them post a $100,000.00 bidder's bond. There's simply no good reason for a failed bidder not to share in the pain. Why should the seller be the only one to feel the hurt of non-payment?

So far as small time sellers or bidders go, the sellers ought to be banned from ALL future auctions and have all their domains removed - immediately and forever. Make it plain from the start. That's how a credible auction system would be built. Make the cost of "not doing the deal" the loss of all benefits of the system. Otherwise, people can selectively benefit from Sedo's system. As they choose and when they choose. That's a BS system.

Did Afternic ban the seller who refused to transfer their domain to met after I met their price? No. All their domains remained listed.

Why do auction houses allow such behavior to go unsanctioned? Well, culling out the bad apples might cause their number of "domains listed for sale" to go down and that would be bad for business - at least when viewed from the eyes of a person considering listing their domains. Where do you want to list your domains? At the auction with fewer or more domains? More, of course. And, since it's not the auction houses "fault" when a seller doesn't deliver why should they penalize themselves - by culling all the seller's domains - when there's a chance that the seller may deliver on a future deal and then they'll make a commission. Oh, and let's not forget the chance to make some parking revenue. All likely explanations why auction houses don't clean house of non-performing sellers AND WHY some auction houses are, in fact, to blame for non-performance. Blame = no consequence, measured in terms of loosing the opportunity to use the auction system.

And frankly, given the recurring nature of the problems - and Sedo's late arrival to the idea of vetting buyer's at auctions - Sedo has been willing to accept BS as the status quo. There's just no good reason or excuse for an auction of the scale of Pizza.com to fail without serious consequence to the bidder and public notice of just what that consequence was.

Did anyone read anywhere what, if any, actual material consequence was suffered by failing to pony up $2.6 million "as contracted"? I haven't . Have you? Sedo was happy to have the sale covered in the media. Notice how little media attention was given to the failure of Sedo to deliver the Pizza.com bid money? Classic.

If I were the seller I'd be suing the auction winner for $1 million, as that is reportedly the difference between the price $2.6MM bid and the eventual selling price of $1.6MM.

Of course, that assumes the bidder actually has the resources to make the lawsuit worth the seller's time and effort. Naturally, one would expect Sedo to know if the bidder has such "assets to risk". Otherwise, why would Sedo have allowed that person or company to be party to the bidding process?

[edited by: Webwork at 2:34 pm (utc) on July 9, 2008]

Webwork




msg:3694401
 2:37 pm on Jul 9, 2008 (gmt 0)

Fair or unfair: A seller that refuses to deliver a domain name should have all their domains removed from the auction house's system and ALL those domains should be banned from being listed in the future.

Better yet: A "wall of shame", just like my local gas station - that posts checks that were returned for "insufficient funds". Post up the domain seller's name, the domain he/she failed to transfer, and a list of all the domains that were removed from the auction house - giving fair warning to all that the person cannot be trusted to deliver on a domain deal.

Would there be room for exceptions to banning? Sure. Case by case basis where the failure was not "in bad faith".

Ban 'em or not? An idea whose time has come in my book.

Key_Master




msg:3694418
 2:51 pm on Jul 9, 2008 (gmt 0)

I agree with you Webwork. I'd like to add, buyers can be just as bad as the sellers. More accountablility is needed on both sides of these issues.

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