Broker or direct deal

What a broker actually does

A broker works the parts of a deal that software cannot. Finding the current holder of an unlisted name and reaching a decision maker. Approaching that person without revealing who is behind the offer. Holding a negotiation over weeks. Reading whether a stated position is real or an opening move.

On the sell side the same skills apply in reverse: qualifying an approach, keeping a buyer engaged while a price gap closes, and stopping a seller from accepting the first number out of nerves.

A broker also runs the closing mechanics, which is the part buyers underestimate. Drafting the short agreement, choosing the payment route, coordinating the escrow, chasing the registrar when a transfer stalls. Someone who has done this a hundred times will not be surprised by a waiting period or a registry lock.

What a broker does not do

A broker does not hold the money. That is an escrow function, and the two roles should stay separate: a broker who also takes custody of funds is holding both sides of the deal. A broker does not set the registry rules, cannot shorten a waiting period, and cannot force a transfer through a locked domain.

A broker also does not create demand. A name with no buyers does not acquire one because a broker is representing it. Retainers charged for that promise are the least useful money in the business.

When a direct deal is simpler

Deal directly when the name is already listed at a stated price, when the holder is easy to identify and responds, or when both sides are experienced enough to run the handover themselves.

In that situation the useful protection is not an intermediary negotiating on commission, it is a payment structure that stops either side from losing both the money and the name. That is the job of escrow, not the job of a broker. A marketplace listing plus an escrow transaction covers most straightforward purchases.

Direct also wins on speed. A two party conversation moves faster than a three party one, and the sequence from agreed price to code in hand can be a single afternoon on a country code extension.

When a broker earns the fee

• The name is not for sale. Someone has to find the holder and make a first approach that does not read as a cold offer from a stranger.
• Identity would change the price. A recognisable buyer approaching directly raises the number before the conversation starts.
• The gap between the two positions is wide. Closing that gap takes patience and structure, including instalment options or a lease to own arrangement.
• The counterparty is difficult. Estates, companies in administration, holders who do not speak the buyer's language, holders who have forgotten they own the name.
• The value justifies the process. Above a certain level the cost of a failed or badly documented deal is far larger than the fee.

How brokers are paid

Almost always on success, as a share of the final price rather than a flat charge, with the share agreed in writing before any approach is made. Retainers exist, mainly for acquisition searches where real work happens even if nothing is bought.

Two points settle most later arguments. First, write down which side pays and out of which part of the money, because a success fee taken from the seller's proceeds and a success fee added to the buyer's price are not the same deal. Second, define exactly which names the mandate covers and for how long, so a purchase made months later from a holder the broker introduced is not disputed afterwards.

Marketplaces sit in between

A marketplace publishes the name, gives an interested party a route to make an offer, and usually provides a payment and handover process behind it. What it does not do is chase, persuade or negotiate on behalf of a seller.

That is the right level of service for most inventory. It becomes the wrong level when a specific name is needed rather than any suitable name, because a marketplace only reaches holders who have already decided to sell. Some marketplaces offer a mediation service for higher value names on top of the standard listing, which fills the gap without a full brokerage mandate.

Whichever route is chosen, the closing checks do not change. Ownership still has to be verified, the mechanism still has to be agreed, and the money still has to move in an order that protects both sides. The buyer side of that work is in the buyer checklist.