A new “lease-to-own” option has just been announced by DAN.com on Medium which allows domain name owners to “lease” their domains over a set time period financing the purchase of the domain.
DAN.com has offered an instalment plan in the past for buyers to pay for a domain name in 12 instalments. I guess it’s kind of like the afterpay model?
However, with the new lease-to-own option buyers will be able to stretch payment for a desirable domain over a much longer period of time, up to 60 months. Sellers can choose how long they’ll allow a buyer to stretch out payments in the account settings. This can be helpful for higher-priced domains that may be of interest to startups or cash strapped businesses who wish to pay off their domain investment over time.
The big difference between instalments and the lease-to-own option is that there’s an escalating payment price for a longer pay-off period. So the buyer has an incentive to pay off their domain earlier. The longer the payment term is, the more expensive the domain name is.
2-12 months – no charge
13-24 months – 10% markup
25-36 months – 20% markup
37 – 60 months – 30% markup
50% of the markup is kept by DAN.com while the other 50% goes to sellers.
DAN.com still collects their standard commission rate of 9%, regardless of whether the domain is purchased outright or on a lease.
This could be a great option for buyers and sellers as it is managed by DAN.com and does not require a lengthy legal negotiation that an independent lease to own contract would require.
Minimum monthly payments are currently set to $99 per month. However, DAN.com hopes to make $10-$20 monthly payments an option in the future.
However, there seems to be a major downside. The DAN.com lease to own option does not allow negotiation of price between buyers and sellers. Although they frame “no more negotiations” as a plus side. It’s not clear that many buyers and sellers would agree.