Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Buying a hosting company

[zildjian2000]

When you buy a hosting company what do you usually do to make sure that neither party gets screwed? What manner of payment works to ensure that both parties are secure? Do you pay first then transfer or visa versa?

[Shaw Networks]

If you're making a large purchase, then you'll typically have both parties sign an agreement with a witness and use an escrow service. If you're making transactions of a $1000-$3000 we usually just get to know the buyer/seller very well and just send the money by PayPal. You can always work out your own security measures in any sort of transaction you're engaged in.

[zildjian2000]

so for instance if I was to buy a company, I would go to my laywer and have him write up a contact, fax it to the other party and have him sign it and fax it back to me and then send him payment via escrow service? Can you recommend a good escrow service?

[Tina J]

Originally Posted by zildjian2000

so for instance if I was to buy a company, I would go to my laywer and have him write up a contact, fax it to the other party and have him sign it and fax it back to me and then send him payment via escrow service? Can you recommend a good escrow service?

A signed/faxed contract is pretty much worthless. You need the original. You also need to make sure that the person you think you're dealing with is actually that person. For example, what's to prevent me from telling you I'm "Joe Smith" and faxing or mailing you a contract signed "Joe Smith".

--Tina

[zildjian2000]

How do you suggest going through the process then?

[Tina J]

It depends on the dollar amount, in my opinion. I'm not going to bother getting my attorney involved over a couple of thousand dollars or less. I'll whip up a general contract and have the buyer/seller sign and mail it back to me and then either Paypal or wire transfer the money to me. Its not a very solid way of ensuring you won't get ripped off...but it boils down to the amount of effort that I'm willing to put in to protect that small amount of money.

Anything over a couple thousand dollars and under 10k, I'd talk to the person on the phone and research them - as well as have my attorney draw up a formal contract. I'd then do the mailing bit with the contracts and have them either pay via escrow or wire transfer. If I felt that anything didn't feel right, I'd pass on the deal.

Anything over 10k, I'd meet face to face at least once before the contract signing and I'd sign the contract and get payment via certified check or wire transfer promisary note...in person. I'd also consider having both parties attornies present.

--Tina