My "golden Rules" of Website Buying

[dsieg58]

1.) Any hint of a seller withholding information, don’t bid, or buy.
2.) Never bid on an auction unless you have ALL the info available.
3.) Independently verify every aspect of the sellers claims. Overlook nothing.
4.) Any belligerence on the part of the seller, about your due diligence, terminate the conversation and don’t bid, or buy.
5.) Never enter ANY auction unless every single one of your ducks are in a row.
6.) Explain all actions, in detail, on the private side of the buyer/seller chat. Leave an exhaustive legal, paper trail.
7.) In any discussion of selling points MAKE SURE you get the seller’s agreement, or disagreement to any terms in writing on private chat.
8.) At the slightest feeling something is wrong, abort. Even if you can't define it. Trust your instinct.
9.) Never get emotional about a web property, no matter how much you want it, or how good a deal it is.
10.) If it looks too good to be true, it’s probably a lie.
11.) At the slightest disagreement, or belligerence on the part of the seller, abort.
12.)Test the seller, if possible, by asking questions which may not be obvious, but you ALREADY KNOW THE ANSWER TO from your own due diligence.

Can anyone add to this list?

[DomainMagnate]

Good stuff overall, but sellers always withhold something, you can never have all 100% of info there, you can never be 100% sure about anything, otherwise there would be no risk. There is always some kind of disagreement and issues with any sizable purchase. I think you'll never actually buy a site if you follow this kind of strict rules

[Thomas]

Good stuff overall, but sellers always withhold something, you can never have all 100% of info there, you can never be 100% sure about anything, otherwise there would be no risk. There is always some kind of disagreement and issues with any sizable purchase. I think you'll never actually buy a site if you follow this kind of strict rules

I agree. The list is solid, but you're going to spend hours and hours and never actually buy a site if you stick strictly to it.

[dsieg58]

That's OK too...I'm a patient man. When it comes to losing time, or losing money, I choose the former.

All lists are guidelines, or ideals. Subject to change with circumstances or as new info comes to light. None are ever accurate 100% of the time. I guess my point is, would rather start off with an objective, or without one? I personally buy a map when I go on a road trip. I know in advance that it might not be 100% accurate, 100% of the time. But I use it all the same. I simply adjust my destination accordingly.

[Thomas]

I'm interested to hear how many sites and dollar value of sites you have bought using the above guidelines?

Are we talking 4 figures, 5 figures... 6 figures?

I used to buy a lot of sites (focus on larger acqusitions now) and I was never that strict with my buying criteria. I would always back my ability to grow sites to mitigate any possible issues. I find there are way too many uncontrollable variables to be too strict when buying.

[dsieg58]

If you go back to my first post in the introduction section, you'll see I'm in the market buying websites currently. I have one buyer right now who, I won't say fits every single, solitary item on that list 110%, but enough so I'm continuing with him. And he fits enough of the criteria so I have a good idea whether I can work with him. Which is the purpose of the list. He has a portfolio of sites which I'm also interested in. If I can find one buyer, using this as a guide line, I'm pretty confident I can find more. But that's me.

I'm buying websites in the high 4 figure, low-mid 5 figure, range. I'm not trying to say I'm that strict either, 100% of the time. As I said, in the post above, I use it as a road map. Not as an absolute. I also have the ability to grow sites as well, know exactly what it is I'm looking for, what I want to buy that fit with my strengths and long range plans. But I am also looking to buy multiple sites. If I can find one buyer, who can supply more than one site, that I can have a long term business relationship with, then the time spent upfront is well invested as far as I'm concerned.

Does that mean it will work for anyone and everyone 100% of the time? Nope.
Should every person on planet earth use this as the absolute guide to website owners? Nope.
Is it cast in stone, poured in cement, carved on Mt. Olympus, and never to be violated? Nope.

Can a person use it as a rough guide when dealing with website owners? It's worked for me. But I'm not trying to force anyone to use it, convince anyone to use it, or prove anything to anyone, so as always, use your own judgement. If it doesn't work for someone, it's cool. My feelings aren't hurt.

But yes, I agree. I'm pretty strict in my own criteria. More so than most people. And I probably lose out on some good sites. But I haven't gotten ripped off on any yet either. (knock wood) Which is the point of this entire thread. I don't NEED to buy every good website that comes along. There are ALWAYS more websites. But once my money is gone, I'm pretty positive it isn't coming back. I also agree as well, my ultimate fail safe is my own ability, that even if I'm wrong, I have the ability to turn it around. And I absolutely agree, there are too many variables involved in this business to be totally rigid when evaluating buyers or websites.

I hope this helps,

[dsieg58]

Good stuff overall, but sellers always withhold something, you can never have all 100% of info there, you can never be 100% sure about anything, otherwise there would be no risk. There is always some kind of disagreement and issues with any sizable purchase. I think you'll never actually buy a site if you follow this kind of strict rules

Yes, I agree...You never know everything or can be 100% sure of everything. That is where experience and gut instinct comes in. If something feels bad, it probably is. Or maybe it isn't, and you lose out on a good site, but that's OK, because you didn't lose your capital and live to trade another day. But I can tell you, getting into sizable purchase arrangement with money in escrow, with an unreasonable seller is no fun either.

Well, there are disagreements, then there are DISAGREEMENTS. All negotiations are simply that...negotiations. It always involves give and take. I'm not trying to say it doesn't. But I think a good buyer should know exactly what he willing to bend on, and where not to bend, and get it in writing, BEFORE entering into an escrow agreement with the seller. But that's me.

[Clinton]

I think you'll never actually buy a site if you follow this kind of strict rules

I disagree. I think we buyers should be even fussier than the OP suggests! Obviously at the $500 end of the market it doesn't matter, but if you're spending $20K then I'd recommend following every single one of those and adding some more.

Other rules I use:
- to avoid sites that have too many moving parts/ need much time or skill to manage
- to avoid sites too reliant on any one third party (whether it's Google or a JV partner)
- to require some solid IP either in the form of substantial content, scripts, database etc.
- never agree to any payment method except the one you prefer
- have a comprehensive contract (but appreciate that you may not be able to enforce it)
- do not ever rely on seller's promises for services/help post-sale. Ask for a complete manual up front.

I'm currently in the middle of purchasing a site and every one of the OP's boxes - and mine - were ticked. It's entirely possible!

The list is solid, but you're going to spend hours and hours and never actually buy a site if you stick strictly to it.

Separately, I'm currently dealing with a broker (not your company) who sets a low standard for sellers and I can tell you that they lost business from me as a result. At the very, very least I would expect what's in the OP in every single transaction with sellers whether they are using a broker or not. It would be good if brokers put together a little guide for clients they take on - to explain how it all works and what conduct is expected of the seller through the transaction.

Great posts in this thread, dsieg, thanks.

[Thomas]

It would be good if brokers put together a little guide for clients they take on - to explain how it all works and what conduct is expected of the seller through the transaction.

This is something I've discussed with a few other brokers in various conversations and all of us ae upfront with a seller on what is expected. Unfortunately, though, whilst a seller may agree in principle, when it actually comes down to it, not all of them will follow through. I've found that the vast majority are absolutely fine and go above and beyond to help out with due diligence, but others don't. Bear in mind, some sellers hire a broker as they are not able to sell a site themselves (whether it be through poor communication skills, laziness, stubborness) so I don't think there is any way to completely eliminate these issues - although I do admit a guide for clients would probably be a good start.

[dsieg58]

Clinton,

Thanks for adding your input. Those are EXCELLENT suggestions. I've updated my list with those...thanks. I've also been having luck using my methods as well.

After about 2 weeks to a month into this I can share some of my results as well. I entered an auction on flippa, which fit my criteria above, which the reserve was 30K and BIN was 35K. I had no intention of paying that much. But I followed the formula I outlined in other posts. The auction ended with the reserve price not being met.

Here's where it gets interesting. The Seller immediately contacted me, before the auction was over. He said I was the most professional of all the buyers that contacted him. Even though he had bids that were higher, (he did) he felt more comfortable dealing with me. We're currently going through the give and take, but the price has already been decided at 15K. This is for a (2) websites. The seller never did on-page SEO that have consistently earned 35K a year for the last 7 years. Multiple page one listings on link juice alone. There were also other mitigating circumstances I won't go into here.

[sidebar note: As of today, now the site has been whittled down to one website, but the price tag is now 8K]

REAL sellers have this thing about honesty...it's worth more than money. They are just as afraid of being taken advantage of as you are....an important point this has taught me.

To be fair, there is a lot of give and take going on, but I'm buying the all the pieces that matter to me and only giving up the unnecessary BS. (he had a portfolio of 18 websites 98% of which was useless which I was happy to use as a bargaining chip to lower the price.)

In addition to that, ANOTHER seller contacted me off flippa as well from another auction I sent the bidder questions, but never bid on. He said basically the same thing. Out the sellers he was seeing, he didn't trust them. Another REAL website, earning real money...not the usual flippa crap. He also has a portfolio of sites he wants to get rid of. Both of these sales are now taking place off of Flippa.

But what I can tell you from experience at this point is REAL sellers ARE interested in dealing with REAL buyers who have their shit together. It makes you stand out from a crowd of dross and useless bidders. They KNOW you're serious.

There IS A DOWNSIDE however.

But it has more to do with the industry as a whole than the method. Some people will not want to deal with you. (Many) Internet businesses (and business owners) just aren't professional business people in the "offline" sense of the word. My feeling is, they weren't looking to deceive so much as they simply didn't KNOW the answers to a lot of questions, don't understand analytics and SEO, (Also too lazy, have other things going on, etc) and didn't want to appear ignorant because they are afraid you'll take advantage of them. I've overcome this by being completely upfront, telling them how I arrived at my price, the software I used, showing screenshots, etc. My point here I guess is, that if people are dealing with you because of your perceived honesty, then you need to cement that in place with even MORE honesty.

Again, thanks for the input, much appreciated.