The domain stripclubs.com which sold at the Rick Latona auction at the Phoenix Forum Adult show On March 5, for $101K, is back on the auction block.
The domain is being offered for sale on ebay.com with a starting bid and reserve of only $75K.
According to the owner of the domain, the sale with Rick Latona did not close as the “winning bidder was unable to get the financing he
thought was a sure thing.”
Last week we posted about domains at Namejet.com failing to sell and being re-auctioned. Several people commented about that post, and questioned whether sales at major auctions sometime fail to close and now I guess we have an answer to that question, sometimes they do.
With this sale falling out, this means the live auction at the adult show generated well less than $10,000 in sales.
As far as stripclubs.com is concerned, this domain should sell, as the auction for Rick Latona got all the way up to $101K, with several bidders involved.
Will keep you updated
Assuming the bidder has other assets, I wonder why there isn’t litigation to compel the bidder to complete the deal?
For legitimate buyers, it means one has to be more careful, as the bids of “competitors” might be fake or contingent, rather than being irrevocable, so one can end up overpaying needlessly.
Mike,
I won 7 names in the silent Moniker auction a few weeks back and am still waiting on one. I don’t believe the seller will follow through with the transaction as it was the bargain of the whole thing. Just wanted to let you know this dishonorable backing out crap happens both ways.
Despicable!
George
That is a good question. I have never heard of an domain auction house going after a non-paying bidder, but I have no idea why.
I don’t think Sotheby’s would allow someone to bid and default without consequences.
I made the point in the other thread that there must be a certain percentage of any transactions that fail.
It would be time consuming and very costly for the auction service to chase the buyer or the seller. If Moniker is making $ 1,000. (or $ 10,000) commission on a particular transaction, it just doesn’t make sense to bring legal action. And, then add into it that many of the parties reside in different countries.
All the auction services can do is do what Mike has been complaining about, just don’t permit them to buy (or sell) in future auctions.
I also sold a domain at that auction and the buyer didnt get back to the Latona team.
My name was sold for alot less than what I hoped so I didnt mind but it does make me wonder how many auction houses lose out on commission when the buyer pulls out!
Why dont they go after them?
They make the seller sign a contract, I can only assume they make the buyer do the same.
Things need to change!
Domain
Its one thing for a “percentage of the transactions to fail” and another when the biggest sale, and one accounting for 98% of the total auction goes south.
This isn’t one of 300 domains that didn’t go, its basically the whole auction that went with it
Cheapest
The buyer doesn’t sign a hard contract to after the auction is over, and if they don’t intend on buying they don’t sign it.
Domain Guy: I think the reasoning is that while it might seem uneconomic to sue a failed bidder based on the commission from one sale, the threat should still be there, otherwise the venue will attract more and more fake bidders (which then drives away the legit buyers, or compels the legit buyers to adjust their bids downward to reflect the possibility that they’re bidding against phonies). So, it’s not the 10% or 15% of one sale that’s at stake. You really need to also factor in the lower overall bids on other auctions due to the loss in reputation of the venue when winning bidders don’t pay up. Those lower overall bids might mean reserves are not met, sales don’t occur, sellers decide to not list at that venue, etc. It can become a vicious circle.
Plus, the seller could be the one that sues, instead of the auction house (or it could be a joint legal action).
I’ve got an auction sale from the last TRAFFIC, one of the biggest sales of the auction, in which the buyer is refusing to sign the contract here almost a month later.
If they don’t sue….then why would I list domains with them in the future, especially good domains ? Their reputation is going to crash with too many of these sales going down in flames. Rick, Rick, and Monty will have to rebuild TRAFFIC to regain trust to get decent listings from people that have great domains.
Folks – very few transactions fail to close. There are legal obligations to ensure both buyer and seller follow through with their commitments, however, there are circumstances which sometimes prevent those transactions from closing from either side sometimes that make it more difficult to sue than not. One area we do that others do not, is get most of the domains into Moniker so that we can complete the seller side and get funds into escrow so that we can protect the buyer side. If one side fails, we do our best to protect the parties involved so that there are no losses – that is not the same with some other auction houses.
Also some transactions take longer than others. Those names on 60 day locks, those in registrars that are out of the preferred network or out of the country, those small registrars that are just shells, etc., create delays, EPP Code delivery, etc. We now have relationships with every major registrar and even have escrow accounts in most to make the process smoother, but it is not so easy as it appears sometimes.
Johnny – email me the domain you are having an issue with…also anyone else can as well and I will help get an update to you.
thanks,
Monte
What is your policy regarding buyers who have signed contracts but don’t pay?
Do you pursue them legally or just forget about it?
We take a number of actions…including getting both internal and outside legal involved if the circumstances deem necessary. We have also pursued in court. Again, this does not happen often and each situation is different so it is hard to put a label on the process….and I am not sure what happened at Latona’s auction to make any comment on that situation.
Bottom line – we are aligned in getting the domains sold…we do not get paid unless they sell so it is in our best interest to work with all buyers and sellers to keep them obligated.
We also have new forms signed at every live auction that make our rights even stronger than ever.
Monte
Good to hear, thanks for the clarification on Moniker’s end.
It is the expected response I would expect to hear from you Monte, but the truth is, we will have to keep watching these auctions and the results to make sure that you guys are actually ensuring buyers / sellers keep to their word.. when you say “If one side fails, we do our best to protect the parties involved so that there are no losses” I wonder if your best is good enough??
Perhaps another way to go about it is post up a ‘name and shame’ website… where any seller / buyer that reneges on a deal (for all the wrong reasons.. ie.. ‘gee.. i didn’t get enough money together.. sorry’… has their name / contact details put on a public register and that link is on all the auction sites.. I guess you wouldn’t do it because you would be too afraid of libel..but I would think you could put it into the contract details for any bidder / seller.. .. anyway.. just a thought.. I seriously think this would stop a lot of the loose bidding that goes on, or holds sellers to a deal whether they like the final amount or not..
Krispy
Let’s not forget that this is Rick Latona’s problem not Monte’s.
I would suggest it is an issue with ALL auction houses.. I have heard horror stories from all over.. its not confined to just Rick.. (anyone like to disagree?? )..
I suggest that all participants who wants to bid must place a deposit.
That is what the etoys, toys.com did.
if you don’t pay, we forfeit your deposit.
I would like to update that I did get that 7th name today from Moniker’s extended auction.
With a high value asset like StripClubs.com you would think the auction house would ask for some type of monetary or financing guarantee prior to accepting bids. That is generally how christies and other auction houses work. You need an approved credit facility to bid. I also wonder if the bidder who lost the auction has any claim to the domain or what the rules where. Can you imagine being the loser at the auction only to see it re auctioned to some else who pays less than you were willing to pay.
I would suggest it is an issue with ALL auction houses.. I have heard horror stories from all over.. its not confined to just Rick.. (anyone like to disagree?? )..
StripClubs.com is a very marketable name, the questions remains, what do you guys prefer: a great domain name or a great website? A little over a year ago, my partners and I created a strip club directory called eAdultClubs.com, we paid around $9.00 to register the domain name, and we concentrated our resources developing the website and creating relevant content to our users. Now our site ranks on Google for very competitive keywords like: “gentlemen’s club” and “strip clubs”. Some other sites already tried to copy us, like MyStripClubs.com, without much success so far. Do u guys think we should invest 100K to buy the domain StripClubs.com or rather invest that money making our site even better? All your comments will be much appreciated.
It depends on how profitable you are and how profitable you think you can be. StripClubs.com is easier to remember, easier to market, easier to own the mindshare, easier to type and easier to understand. All those are + over your current name. If you think the opportunity for you directory is a factor larger than $100 k, it would be a sound investment. Other factors are also the ability to knock out competitors from occupying that space.
One issue to factor in is that many of these clubs don’t want to be considered a “Strip Club” even if they are, so may limit your direct partnering opportunities.
The problem with a bidder backing out on names they won is you never really know what other problems that may have caused.
I think these people need to be named so that we have a list of deadbeats.
Remember this one : what happened to this bidder ? sued ? What about the other names they may have bid on yet didn’t win. They potentially cost someone lots more money right ?
http://www.domainnamenews.com/domain-aftermarket/mobi-buyers-remorse/1300
ummm.. regarding last comment.. I don’t think this article is very accurate at all.. I own one of those mobi’s and I am not remorseful at all.. just trying to guage where the market is at on these names.. I bought into a batch of .mobi’s purely as a punt.. nothing more,anothing less.. I certainly am not selling due to financial constraints..
Also, regarding the comment on the question from Phil on the whole eadultclubs.com vs stripclubs.com.. pretty much agree with fresh avails comments, but want to add a bit more.. you could also buy the stripclubs.com and just keep building the platform.. i.e. have a name you have put sweat and tears into, AS WELL as getting a good type in genric traffic driver.. and don’t worry about poss. advertising issues with the name, can simply redirect it to you eadultclubs.com so even thought punters are looking for strip clubs, your advertising partner sees a landing page of eadult etc.. I would even suggest that rather then pump profits into more site building.. go on a ‘type in’ spending spree.. by typos of the names etc and just build the organic traffic for a while.. you might even find that if you can get a good adv. partner, that you can convert better than a park. co. page.. which means you are buying those parked names you want for your stable at much cheaper prices… (but then.. I am a typo ‘slut’ .. i only buy typo names… they are just so much more reliable and sustainable!!.. good luck with it.. whatever you do!
Krispy did you buy the .mobi at that auction ? This was in an email sent from Moniker themselves because the names were re-auctioned.
This deal was a complicated one to say the least. The seller was very impatient. The buyer could have closed but needed a little time to come up with the down payment. I was the one that was going to have to finance it and I wasn’t willing to finance it without the down payment. It isn’t really fair for him to throw me under the bus like this. It would take me all day to type up all of the things that went wrong with this transaction.
I can tell you that we go through extreme measures to make sure we close as high of a percentage as possible and at each auction we never have more than 1 or 2 deals that unwind. We are the only auction company that finances our buyers. We work hard to keep things moving forward.
Monte’s point is really correct. Very few transactions don’t close. It’s time that killed this deal just like he pointed out is often the culprit.
I just want to be clear about one point here. The seller pulled this deal. We were going to get it done.
Rick
Thanks for the explanation.
I know a lot of people were thinking how could the buyer not get financing when you offer financing.
Now it makes sense.
UPDATE
This domain sold at ebay today at the reserve price of $75K on one bid
“The buyer could have closed but needed a little time to come up with the down payment.”
Shouldn’t a buyer have the money to make the down payment when they stick up their hand at auction? How long was given?
No Adam… we had the names for a while.. so must have just gotten re-auctioned..