Morning Folks!!
The road to hell is paved with good intentioned
people. Everyone generally enters an agreement with honorable intentions. But
even the best of intentions lead to failure the great majority of time once
lawyers get involved or business heads south. So the contract is the only thing that protects you and
if that contract is not rock solid, clear and concise, it is worthless. If the
contract does not protect the domain owner from unforeseen peril, it is
worthless and eventually you will have a really good chance of losing your
domain without the other party fulfilling their obligations. I have seen that
happen too many times to count and no way would I become a victim of that. The power to walk away from a bad contract is the greatest power in business.
Our lawyers couldn't agree on terms that would
protect the interests of both parties (Especially mine) and so I had to pull
the plug on the deal earlier this month. I was not going to sign a contract
that did not state EXACTLY the procedure for return of the domain in case of
default. That did not have a FAIL SAFE built in like I do on the Candy.com deal. In that deal it was easy to accomplish. It should be easy. In this deal, it sank
the ship and I refused to go along for the ride. And why should I?? BYE BYE! NEXT!
So there it is. Unfortunate but may be a blessing
in disguise. As you can see we are working hard on Property.com and will be
introducing Sub-domains and other long term strategies as we move forward.
Have a GREAT Day!
Rick Schwartz
Kevin
This is a good deal to learn from everyone.
It was unfortunate that even after well over a year of back and forth negotiations, wrangling clause by clause on the final terms of agreement by top lawyers, there were still issues Rick and Brad couldn’t agree on, and it reached a point of stalemate. This sometimes happens on deals involving multi millions of dollars, especially in large scale and complex transactions as we had here, where Rick was providing the multi-year financing on the acquisition.
I personally think Brad let a tremendous asset slip out of his hands that he could have utilized in all sorts of ways for enhancing the value and growth of his real estate empire. And Rick really went the extra mile to get the deal done and go as long as he could, but for whatever reason this one just wasn’t meant to be.
Still Rick did ok on the deal for the year regardless, the lawyers made money, and new opportunities await Property.com now.
Tim Davids
Kudos that your talking in public about it…shit happens but at least it’s still in your name and maybe you’ll catch a better economy next time.
Premium Domains
Sorry to hear for you Rick, but actually IMHO it is the best domain in the world. I joke not. I am British, so real estate means nothing, its ‘Property’. I would guess in English speaking countries this is THE word. I’m talking Australia, Canada, and the rest of the worlds second language. Yes, i know the U.S is the single biggest market for pretty much everything but its still the number 2 term even there. It’s the ultimate domain and its not like candy where you’re selling sweets and you have shift a boatload for profits, the profit on preoperty is as we all know monster, well at least it used to be and will always be to a degree. Whilst some of of your domains you have had unreal high prices ireport etc when there was only one buyer, cap off, but this domain is the jewel of any crown. Quadruple the price, keep developing and add millions every year mate
cheers
Guy
tom williams
Rick’s posting is indicative of his astute appreciation for the realities of the business world and its ways. He is truly ‘in the know’.
A contract is not worth the paper it’s written on if the parties to it are unwilling (think disagreement as to meaning of terms of presumed or changed circumstances since contract was originally negotiated and signed), or unable (think bankruptcy) to fulfill its terms in the future.
Hence, his insistence on automatic default options for return of the domain in case the ‘consideration’ for the agreement failed down the line is indicative of his appreciation that breach of contract suits take a long time to get to final unappealable state, or settle and are very costly to pursue.
His insistence on an automatic return of the domain in case of default by the purchaser shows a keen appreciation for the ponderous and costly ‘slog’ one must go to enforce a contract in case of dispute.
WebWanderer
mmm
Why announce before closed and patched?
Dave Wrixon aka Rubber Duck
Kevin, it is always tough when you have to provide the financing to get the deal done. The Chinese are finding that to their cost Big Time!
Kevin
@ Dave
Agree, but the price tag on this deal was significant and in an effort to help buyers do well with their major acquisition, where you will also retain equity in the deal long term, it’s important to structure terms so the business goes profitable.
At the same time, you’ve got to protect the interests of the seller since they are the”bank” in the deal and trying to make it affordable over the long haul.
A lot of complex issues inevitably pop up. Sometimes you can find a meeting of the minds and sometimes you can’t no matter how hard you try to make both sides feel protected.
The economy clearly caused issues on this one as well, since the real estate market crashed during the deal negotiations.
But you just move on. Lots of other opportunities out there for this great domain.
And Rick did fine for the year on the short term agreement on Prop regardless that the long term agreement for it couldn’t be finalized.
Richard Douglas
Deja vu!
See what I wrote here a few months ago:
http://toomanysecrets.com/propertycom-development-tips/
David J Castello
We’ve been down this road a couple of times in the past year. Rick did the right thing by not taking any chances and clawing it back. In these situations it is far more important to agree upfront on the exact terms of a possible divorce instead of not nailing everything down contractually because you’re too busy enjoying the honeymoon.
rjb
Congrats on having the fortitude to walk away from a deal that wasn’t to your liking. Most people wouldn’t be able to do that, for one reason or another. You will probably do a better deal for this name down the road.
jeff schneider
Hello Rick,
If there were a # you could put on all the pitfalls of a domain sale that you know of, what would that # be? 5 pitfalls or maybe 10? All of us including myself could really benefit from your knowledge in this area.
This would be a good posting subject for us all to learn from? How about it Rick? Would you consider sharing a few that you know of?
Gratefully, Jeff
j.m
Good Job! Based on the previous history of your suitor. You absolutely did the right thing. Comment based on first hand knowledge. There’s many other honest people you can deal with instead.
Lee
hahaha! You just answered my question! Your candy domain looks to have been sold in installments…because why would you need to get the domain back if it was sold all at once. You never confirmed either way when I posted before but now it seems you have – thanks buddy! I have no actual knowledge – just my theories…
The Truth
I know Brad personally and I think that what Rick is describing isn’t the whole truth. Brad is a real stand up guy and without going into detail there’s a lot that’s being left out. Don’t let Rick’s post or Foreclosure.com filing chapter 11 be any indication of Brad’s abilities as a business person. He’s built an empire that makes Rick’s fortuitous”early” domaining pale in comparison.