Folks, I’m here to share a story with you that I can hardly believe occurred. It’s the story of a major violation of trust between myself and a company we hired to specifically represent us as the buyer’s broker in a purchase transaction. That company is SEDO, and this story is, well judge for yourself… but to me it’s unbelievable.
The story begins when I decided I wanted to obtain a domain, related to OneMansBlog.com, that was already taken and which I quickly determined was parked and had been registered at Sedo.
Sedo is a large, accredited top level domain registrar. So, I first did a quick search on their site to see if the domain was listed for sale, and when it wasn’t found I decided to check out their offer to “broker” the purchase for me.
Now, I thought about this for a minute and realized that if I were to approach the domain owner myself they would likely see that I own OneMansBlog.com and then be anxious to charge me extra for the related domain. So it sounded reasonable to enlist the assistance of a middleman in the process.
After reading all of Sedo’s documentation regarding rules and policies, I ultimately decided to give it a shot. We created an account and filled out the form to get them started. As part of this form, Sedo asked for the MAXIMUM amount that we were willing to bid. At first this made me very nervous, but they provide a link right there on the page that offers the following explanation:
What is an investment limit?
When you apply for Sedoâ€™s buyer-side brokerage service, you will be asked to enter your investment limit for purchasing the domain. Your maximum investment limit is the highest price you would be willing to offer for the domain. This information is confidential, and will not be disclosed to the domain owner. As always, your broker will begin negotiations at a fraction of your investment limit and will work to acquire the domain at a fair and reasonable price.
If your application is approved, your broker will use your investment limit to determine a strategy for negotiations.
So after reading that, I was reminded of eBay, where I often put in a maximum price and have never felt cheated. I figured that I would go ahead and give them some latitude, and instead of the minimum bid of $500, I went ahead and upped their limit to $1,000. This was because I trusted them to do the right thing.
Now, according to Sedo’s Domain Brokerage Service Terms and Conditions, the first step after acceptance into the brokerage program was as follows:
22.214.171.124. Assignment of Domain Broker
Upon the successful application to the Buyer Brokerage Service, you will be assigned a domain broker in accordance with the approximate value of the domain you wish to acquire. Your domain broker will then seek to establish contact with you through the contact information you have provided in your Sedo user account and shall explain the domain brokerage process and a schedule for providing updates on the course of negotiation.
So our expectation was that, within a couple of days, we’d have a little e-mail or phone chat with the person who was going to be “negotiating” on our behalf, after which time that person would begin to attempt contact with the domain owner to open a dialog and see if we could acquire the domain.
Imagine our surprise when the very first response we received after our automated sign up e-mails was as follows (personal information hidden, obviously):
From: XXXXX XXXXX
Date: Wed, Mar 25, 2009 at 5:25 PM
Subject: Brokerage request for XXXXXXXXXXX.com
To: XXXXX XXXXX
A client of mine is interested in this domain and is prepared to offer you $1,000 for it.
Please let me know if you would like to accept their offer.
Thank you for your time. I look forward to your response.
To reply to this message please visit the Brokerage Status page: https://www.sedo.com/member/brokerage/status.php?XXXXXXXXXXXXX
tel +1 ( 617) 499 – XXXX â€¢ fax +1 ( 617) 499 – XXXX
http://www.sedo.com â€¢ mailto:XXXXXXXXXX@sedo.com
Now, I don’t know how that strikes you, but even if we forgive the fact that our “broker” skipped the formality of getting in contact with us and setting our expectations, I still see two glaring issues:
- He sent the e-mail to us, not the domain owner. Presumably this was just an error (a really, really bad one).
- There was absolutely no “negotiation” taking place on our behalf. Despite the promise to, “…begin negotiations at a fraction of your investment limit….”
I mean, why in the world would we “Hire an experienced Sedo broker to negotiate an acquisition…“, if all that really means is “we’ll send an e-mail on your behalf with your maximum offer to the domain owner”?
Keep in mind that they charged us $69.00 the minute they accepted us as clients, and that there was going to be a 10% commission fee on the final negotiated price.
Now if that commission fee bothers you, as it did me initially, remember the previous promises they made. And remember that this is a large, well known domain registrar. Besides all of that, as far as I’m concerned, the terms I agreed to with Sedo created a Fiduciary Responsibility on their part. What is that?
In a fiduciary relation one person justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.
Now the question is, what should I do about this entire affair? Feel free to share your opinions, and I’ll follow up with another post later as the story unfolds…