6 Mistakes Sellers Make When Selling Websites: #6 Expect All-Cash Offers

May 06, 2015  |   How to Buy & Sell Websites   |     |   Comments Off on 6 Mistakes Sellers Make When Selling Websites: #6 Expect All-Cash Offers

As a rule of thumb, most website sale transactions over $100,000 are rarely all-cash deals. This rule is not set in stone. But generally, over $100,000, the website seller offers some form of financing to the website buyer. This is called seller financing.

In seller financing, the website buyer makes a down-payment as partial payment for the website and pays the rest of the purchase price over a period of time. These are usually monthly debt payments over a few years.

During this time, the website seller effectively still owns the website and full ownership is only transferred to the buyer when the website buyer makes the last debt payment. Some of the website assets may be placed in escrow until the final debt payment has been received by the seller.

Why Offer Seller Financing?

Most website buyers do not want to pay 100% cash upfront in high-dollar value website sale transactions. Holding back part of the payment enables the buyer to put up less cash and reduce the risk that he acquires a low-quality website at a high price.

When a seller offers seller financing to a buyer, in effect, he is stating to the buyer that he is confident in the quality of the asset he is selling to the buyer. This vote of confidence actually gives the buyer a sense of security that he is making a good investment. It can often be a key to closing a deal between a buyer and a seller. Especially in a situation where the seller is dealing with an indecisive buyer.

Inexperienced Sellers Ask for All-Cash offers upfront

Many inexperienced sellers selling websites over $100,000 expect that a website buyer will come in, hand over $100,000 in cash, and the seller will just walk away with this money. It rarely ever happens in this way.

Many novice sellers state upfront in their website listing that they will only accept all-cash offers from buyers and simply dismiss buyers who do not make all-cash offers. This is a huge mistake. It can eliminate most or all potential buyers.

It is important, as a seller, to invite all offers proposed by buyers.

Buyers expect the seller to prove to them that the asset is a good investment. They expect the seller to have some skin in the game over a period of time. This can be anywhere from 12 months for simple websites to 5 years for more complex transactions.

All-Cash Discount

In situations where a website buyer chooses to make an all-cash purchase, he usually expects to get some kind of discount on his purchase price. The size of the discount depends on the bargaining power of each party to the deal.

For example, in some cases, a seller may offer an 85% discount on the agreed-upon website purchase price.

In conclusion, remember to leave the door open to buyers to make all kinds of offers whether they be all-cash or not. Be flexible.


Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

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