Buying Your First Website Part 2 – Managing the transfer

This is the second post in the Buying Your First Website – A Case Study series. Please note these posts are a case study about buying a start-up site. You can find the other post here:

You’ve found an established website for sale, done your due diligence, bid and won the auction. Congratulations on your buying your first website on Flippa! What now? Here are a few pointers to ensure the website and domain transfer goes smoothly.

Correspondence – Keep it in Flippa.com

First a word on correspondence. We recommend that you keep all correspondence between you and the seller within the Flippa private message area. This ensures there’s a message audit trail that can be referenced in the event of a dispute. If you correspond via email or, worse, instant messaging, we have no record of who said or promised what and no recourse in the event of a dispute.

Initiating the Transaction

As with every transaction in life, there is an element of risk associated. When a transaction takes place both buyer and seller are at risk if the other party does not honor the spirit of the transaction. Some sellers opt to negate risk by using Escrow which is a more secure form of transaction. Some notes on the two main payment options are as follows:

  • PayPal
    PayPal has become a ubiquitous form of payment on the web and is a quick and easy way to pay a seller. Some seller may not accept PayPal.
  • Escrow
    Many sellers prefer Escrow as it provides a greater level of security. Similar to a trust, funds are held by by a third party until both buyer and seller are happy that the transfer of files and domain name have been completed.

Hosting

Some sellers will offer a period of free hosting which is a great value add in an auction, however if you want to ensure full control over your website, we recommend setting up your own website hosting account with a third party and transferring the site across as soon as you can. (Note: this can have SEO implications). You can then either ask the seller to move the website to your hosting environment as part of the sale terms, or move it over yourself. Ask the seller for their preference or make sure you stipulate the proffered method when communicating with the seller prior to purchase.

Obviously some experience is required here so make sure you know what you’re doing. There are many affordable website hosting plans to choose from; we recommend you do your research and find a reputable hosting provider such as Hostgator (aff). If you plan on buying more sites make sure you purchase an account that can handle more than one domain.

Transferring the Domain Name

After setting up the website on your hosting account, it’s time transfer the domain name. Ask the seller to change the DNS (Domain Name Server) settings to your hosting account DNS settings prior to transfer.

When purchasing my first site, I discovered you cannot transfer a domain name to another domain registrar if it is less that 60 days old. If this is a concern, register an account with the domain registrar that the seller is using and they should be able to pass the ownership to you.

When the seller confirms that the domain name has been transferred, check the WHOIS data to confirm.

What’s Next?

Hopefully all has gone smoothly and you now have full control over your new website, so what now? The next post in this series will focus on updating content, affiliate links and tracking codes.

  • Adam

    Wow, in other words, Flippa protects the buyer in every single way, but not the seller… Release the site, and the domain name, then get paid? I think you are not looking at the right method. Why not release the domain name, and then move the site? I think it is much safer to actually control the domain name. For both the buyer and the seller. A Site without a domain name is useless!

    • As stated in the post, the safest way for buyer and seller to transact is to use escrow. In this particular case study, the domain couldn’t be transferred so the site was transferred first.

      • Chris

        Firstly, Luke, thanks for the post.

        I would love to know more about protection for buyer / seller and perhaps Flippa’s advice on the best methods to do this?

        I.e.
        Money transferred to Escow
        Domain & site transferred
        Money released

        OR

        50% payment issued
        site transferred
        remaining 50%

        Also can you let us know what protection buyer and seller have (even if you have an audit trail on flippa)

        Thanks
        Chris

        • The best method we can recommend is Escrow however, I’ve come across some buyers/seller that have had success using the second method you’ve described above.

          In regards to protection, our recourse is only in the bounds of what we can do to our users, which is to suspend or ban them if they’re bad, and
          refund them listing and/or success fees if they’re good.

  • the most important tool to use in terms of escrow is getting a reliable escrow company there are several of them out there, but would advise strongly for flippa to use or start such service.

    It will go along way in building lasting relationships online as well as boost sales on flippa

  • It’s important to note that many escrow companies, INCLUDING ESCROW.COM, don’t escrow websites. They’ll take their fees and put your transaction through their system, but you don’t have the protection you thought you did.

    More: http://www.sitepoint.com/forums/showpost.php?p=4183571&postcount=83

    • Wow, that’s very good to know!!!

  • Hi Luke, I recently had troubles with one of my hosts, so I moved one of my sites over to my other hosts.

    I’ve checked into this a little bit and I’ve been hearing that there are no SEO implications for transferring a website to a new host.

    Can you explain more about what you mean by that comment in your post? What are the SEO implications and under what conditions might they come into play?

    • Thanks for the comment Eric. Having consulted the SEOmoz forums on this one, some SEO’s suggest that transferring a domain to a new host may have a temporary effect on rankings.

      Some believe that Google sees the change in IP address and flags it as a change of ownership (same goes for domain name hosts). Given that the trust was attributed to the previous owner(s), some sites may be temporarily placed in the sandbox.

      That doesn’t necessarily mean you should put off transferring hosting and domain registrars, but it could be a good argument for not making any drastic changes to a site post purchase.

      • Paul

        >>Some believe that Google sees the change in IP address and flags it as a change of ownership (same goes for domain name hosts).

        Google know that people swap hosts all the time so I’m sure they wouldn’t assume that a change in IP signals a change in ownership. Especially when they have registrar details to hand to confirm such an assumption.

        Whenever I’ve swapped hosts I’ve not noticed anything untoward happen to rankings.

        • It’s more the combination of the two that may be cause for concern.

  • andrian

    the best solution for big transaction for the future is … Flippa should start their own escrow service.

    “More transactions on flippa ; more profit for flippa and for sure both side (buyer and seller) will feel safe.”

    Flippa should put this on their to do list. 🙂

  • Hey guys,

    I’m a Flippa N00B and just purchased my first site. I received the congratulations email that I won and to proceed with payment. However, I assume Flippa does not have PayPal integrated? In other words, I have to leave Flippa, head over to PayPal to send payment? The site was under $100 but how does this work if I want to pay with PayPal?

    Your help would be greatly appreciated.

    • Dave Slutzkin

      Nelson,

      You don’t pay Flippa – you pay the individual seller, and Flippa doesn’t get between you at this point in the process. You need to communicate with the seller by going to the Sale Completion Area and negotiate with them how they expect payment.

  • Bought 3 sites on Flippa. Worked well with 2 of the site owners and of the 2 had a problem on one site which I sub-contracted another webmaster to take care of. Things worked out fine.

    But….., the 3rd site no so well. Maybe because of winning bid. Granted I did get it a great bid but does that entitle a seller to not live up to the auction details. Had numerous emails with seller but is too busy to help out. Site is having problems, not loading well. Site owner says probible cause wp-robot but no attempt to fix. I think he can’t. I even offered more money but he refused. Any suggestions on recourse?

  • Oh! I forgot to mention. This is still on his hosting. Transfer to my hosting has not been done.

  • Great article and some great comments in particular.
    The information that suggests that Escrow.com as a company were not as suitable for protecting the sale of web assets online, in the past as people may have thought is particularly interesting.
    I have only bought websites on two (or three really) occasions and I got let down on every occasion. I think this is partly due to my lack of experience, but partly due to there being a lot of smart criminals that like hiding behind computers. I cannot stress the importance of gaining a good grounding in everything in general to do with web businesses and try and get advice/post threads on forums related to website monetising, to assess the likely authenticity of a seller or listing.

  • My experiences thus far as a BUYER are that having paid for websites – the SELLERS appear to lack motivation in processing the transfers. In one current case the seller is providing false information. The posts here seem to be about SELLERS getting their money – Well I have PAID and after a whole week since WINNING the auctions am still waiting for the SELLERS to process their side of the deal. I would advise extreme caution for BUYERS and make sure you get something written into a contract about the TIME to get sellers motivated after being paid. How sorry I am for those who seem to have problems getting their money – so far very poor BUYER experiences.