Domain Holding
Domain Holding transactions are generally used in website or domain sales in which seller financing is involved. The domain name can be used by the seller as collateral for the debt as the buyer makes debt payments to the seller over time.
The seller may not be comfortable transferring the title of the website or domain over to the buyer until all debt payments have been made. As such, a third-party can hold the domain until the final debt payment is made. After which, the third party transfers the domain title to the buyer. This third party could be a traditional law firm or domain escrow service provider.
If the buyer defaults on the debt, the seller can foreclose on the domain (collateral) and regain its title from the third party.
Author: Kris Tabetando
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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