The known hacker (and possibly some unknown ones) may have had access to all Flippa accounts, private messages, bids, watchlists and other user controlled functions.

Flippa has neither accepted nor denied the allegations.

It would be a prudent move to change your Flippa account password. If you’ve ever given Flippa access to take a pdf of your Google Analytics stats, it may be worth changing the password of your GA account as well. If you’ve used Flippa’s integration with the escrow.com service … you get the picture.

As Flippa and Sitepoint have common logins, this may apply to you even if you don’t use Flippa, but have an account at the Sitepoint forums.

Details are patchy at the moment, but Flippa’s General Manager Dave Slutzkin has announced that Flippa is adding an escrow service to their site. It’s in partnership with escrow.com (well known, but seriously flawed) and is likely to be an optional service buyers and sellers can use at Flippa.

In the past there’ve been instances where Flippa wasn’t paid the “success fee” for a site selling in their marketplace. The advantage with having an in-house escrow is that Flippa will now know when a site sold in the marketplace has changed hands (whether on not the WHOIS is modified). Honest buyers and sellers who aren’t looking to cheat Flippa out of their success fee should have no issues with Flippa knowing the sale completion date.

It’s not yet known whether the pricing will be fair i.e. users being charged for only the service provided: escrow on the domain. It may well follow escrow.com’s current pricing: price based on the entire value of the site even though it’s only the domain that’s getting escrow protection.

The quality of the chat is extremely high and though the forum is only a week old today, it boasts some of the most respected members from places like Sitepoint and elsewhere who advise on the subject. Already signed up are brokers, accountants and lawyers who deal with matters like Accountancy Due Diligence and Contracts of Sale, buyers and sellers. Flippa is there asking questions and getting feedback on how they can improve their service.

It’s a place where you can find out about the best places to buy a site, what scams to watch out for, what’s a fair price, how to perform due diligence, the best places to list a site for sale, how the pros make money from site holding and site flipping …and much more. Head on over and pose them your most difficult question.

If you interested in any aspect of website buying or selling – you need to be there. Go to the Experienced People forum right now and register today.

That’s where escrow companies come in.

An escrow company will take the full payment from the buyer and hold it till the seller transfers the goods. Once the buyer confirms that he’s received the goods the escrow company releases the funds to the seller. Should the buyer reject the goods, the escrow waits for the seller to confirm receipt back before they refund the payment to the buyer. So everyone’s safe.

But it’s important to choose a good, trusted escrow company to handle what is often a large sum of money. Who do you go to for that? The most well known name is escrow.com. Most experts in website buying and selling swear by escrow.com and they do so with the experience of many transactions behind them. But today I’m going to tell you five secrets that you really should know before you deal with them.

Five Things That You Did Not Know About Escrow.com and Which Should Scare You

1. There is no company called escrow.com. The company you are dealing with is IES that rents/leases or has some other arrangement involving the escrow.com domain (I don’t know what it is and you likely don’t either). That’s not a reason to distrust them but you need to know who you are dealing with. Should IES go bust sometime – no company is immune from the laws of finance – the escrow.com name will likely continue and many buyers and sellers will likely be unaware that anything has changed even though they may be dealing with a brand new company with no history! They’ll assume it’s the good, old escrow company they’ve always dealt with. On the escrow.com website, you’ll find bold claims about “services provided by escrow.com“. They flash “escrow.com” all over the site. Even their postal address is “escrow.com” (no mention of IES). You need to go to the small print to realise that it’s IES you’re dealing with and, in their own words, they are only “one of the operating subsidiaries of Escrow.com”.

Disclaimer: I’m not suggesting anything about IES’s current financial position. They may be rock solid for all I know. And do bear in mind that they are heavily regulated (more about that later) so they don’t do a runner with your money.

But “they” are not escrow.com.

2. Escrow.com/IES doesn’t provide an escrow service for websites: Seriously! It never ceases to amaze me how few people know this. Or realise the huge risk involved in putting website transactions through this company. IES has four categories: Motor Vehicle | Domain Name | General Merchandise | Services.

The closest you have to websites is “Domain Name” and people happily choose that as the closest match and think all is hunky dory. It’s not!

Risks for Buyer: You can end up getting just the domain name and none of the files, templates, designs, databases or anything else that is contained in the website you’re buying and, as far as IES is concerned, they’ll release the funds to the seller on the sole grounds that he has transferred the domain control to you.
Risks for Seller: You can transfer all the copyright, other rights, programs, files etc., to the ownership of the buyer and the buyer can then demand IES give him a refund because he’s changed his mind about taking control of the domain.

3. IES/escrow.com don’t give a fig leaf about your contract. In the purchase of a website the buyer and seller often negotiate terms and draw up a Sales Contract. It may say that certain conditions need to be met and that the buyer/seller can pull out of the transaction if there is a material change. Example: You agree with the seller that if his PR9 site suddenly drops to a PR4 then the deal is off. You send your funds to IES for them to hold during the 10 day “inspection period”. The seller changes the WHOIS for the site and sends you the password to take control of the domain. But on the very first day you find that the PR has dropped (or there is something else drastically wrong with the site and it doesn’t match what the seller described). Tough! As far as escrow.com/IES’s terms are concerned your agreement has no value. The seller gave you control of the site and if he wants to complete the transaction then IES is just going to release the funds to him. The contract entered into by the Buyer and Seller is a carefully constructed document designed to protect each party’s interest. IES won’t even look at that contract. They go by their own terms and conditions and it may or may not be in your favour.

To be fair, you can try raising a dispute or arguing the terms with IES, but there’s no guarantee you’ll succeed, it’s entirely up to them.

4. Many of the “experts” who recommend escrow.com are doing so because they get a commission. Escrow.com is one of the few (if not the only) escrow companies that has an affiliate program. That they are paying people to recommend them is not reason enough to shun their services. But be aware that any recommendation of their service may be driven by expectations of commission rather than a desire to help you.

5. Escow.com is regulated by an authority on another planet. Most experts agree that while the banks took a lot of liberties it was ultimately the regulators who failed in controlling the financial institutions and were responsible for the credit crunch of 2008.

But there is no regulator on this planet quite like the Commissioner in California. He sounds like a cross between Saddam Hussein, Michael Jackson and Imelda Marcos.

He’s power mad and a bit crazy. Nobody – anywhere in the world – can do this business with anyone based in California unless they pay the Californian Commissioner huge amounts of money, bow to his authority, promise to jump when he says jump and sign up to lots of nonsense. But the madness doesn’t end there. If an escrow company in Syndey or Singapore or Sierra Leone decides they can’t be bothered with some jobsworth in California, they need to be aware that he has banned anyone, anywhere in the world, from saying anything critical about him. I promise, I’m not making this up!

That’s just the start. If you read the California Financial Code (div 6, 17000-17305) there’s some pretty serious stuff in there that should dissuade anybody from buying or selling a site if the party they are dealing with is California based. But if the escrow company is registered there it’s even more serious. You will almost certainly lose should a dispute arise. In fact, if they file a court case against you in California, they don’t even need to inform you of the action. In can be all decided in your absence.

Read the full story of the California Risk here.

So even if IES is a very trustworthy company, has a strong balance sheet and great customer service, the fact that they are based in California and signed up to the California Financial Code is reason enough to go look elsewhere for your escrow needs.

Reliable escrow companies that proudly declare they are not registered in California:

Moniker:

Moniker is an ICANN Accredited Registrar and the only company with a special domain escrow account at its registrar to safely hold domains and protect both buyer and seller of domain related transactions. (not registered in California… for the moment)

iEscrow:

I-Escrow, Inc. is Licensed by the Washington Department of Financial Institutions (No. 540-EA-42257) and adheres to its strict regulations, as well as the ordinances put forth by the Revised Code of Washington.

SEDO, escroweurope, Escrow Europa (recommended by eBay) etc., are other alternatives.

Plan 10 times, move once.

Here’s a brief guide to the process.

Step 1: If it’s a new acquisition, transfer the domain name to your control.

Step 2: Download all the site’s files and folders with the correct structure. If it’s an acquisition, get a copy of the applications (if any) and database/s (if any) together with a zip of all the files. Even better if you can get copies of the traffic stats for your future reference as they’ll get lost when the old hosting account is closed.

Step 3: Upload all the files, databases etc., to your new hosting account. Make sure you put them all in the right location. Ask your hosting company for help if you are not sure. (Do all this while the site is still fully operational at the “old” server).

Step 4: Configure the files, set permissions etc., and test, test, test to make sure everything is working as it should.

Step 5: Change the DNS settings at the domain registrar to point to the new IP so visitors can now reach the site at the new location.

More information on moving Wordpress blogs can be found here, here and here. And guides to moving Joomla blogs can be found here and here.

Flippa, controversially, charges a “success fee”. While you still pay for listing a site – albeit, a slightly lower price than before – there’s a hefty 5% success fee (capped at $500). A summary of what has changed is on this Sitepoint thread.

Flippa does offer more filtering options and allows site buyers to specify just high PR sites, low Alexa ranked ones or those selling for more than $10K, for example. There are a few other improvements though it’s hotly debated whether the Web 2.0 look is an improvement on not. The overall Flippa concept and implementation come in for scathing attack in the comments on Flippa’s own blog triggering a frantic response from Flippa that they really are taking feedback.

The name, Flippa, and the overall design and focus of the new enterprise seems to cater for the lower priced-lower quality sites at the expense of the better ones. For example, anyone interested in buying a listed site at the BIN price is expected to complete the transaction immediately via Paypal. All well and good but Paypal has a limit of $10K. It’s apparent that Flippa doesn’t expect to list a lot of websites at above that price point. Interestingly, that’s the price point at which their success fee maxes out (5% of $10K = $500 which is the success fee cap).

What do you think of Flippa?

Added: Snapshot of Flippa page when you click the BIN button

Will the credit crunch mean that people start selling their websites to raise some money?

Will investors see websites as a safer investment than the stock market?

Put your thoughts in the comments below.

Midascode

When webmasters run their sites through the awesome website valuation report at ebizvaluations, they have the option of disclosing contact details if they wish to be contacted by buyers.

Want to see the latest listings?

Here they are

Midascode

We all secretly longed for a solution, and authorative, definitive answer that the website buying and selling industry could use as it’s very own declaration of indepence-esque guide, we waited, and we waited, and we gave out snippets of information to keep the dogs at bay.

Well, I can happily announce that our prayers have been answered, an expert has taken up the challenge, and not only achieved the desired result, but grealty exceeded it.

Now, before your spam radar starts spinning, I should point out that this was not done by one of our team, In fact, we are not connected to this at all.

It was actually developed by a guy named Clinton Lee, and you can read the full guide over at Sitepoint.

The guide, dubbed ‘The Ultimate Website Valuation Guide’ is 6-pages long, and covers every main aspect of valuing a website.

Many myths are debunked, many records are set straight… and the upshot is that finally, the website buying and selling industry has a guide, a bible, a series of guidelines etched into stone for us all to benefit from.

So how can this valuation guide benefit you?

Quite simply, it can prevent you from being ripped-off. It can also ensure that you don’t sell for less than your site’s actual value. It can save you money, as you may no longer need to go to an “expert” who will charge you for 38-pages of jargon.

Website Valuation Tool

If reading a 6-page comprehensive guide is not your thing, fortunately there is a new valuation tool that takes all those 6-pages and crams them into one shiny, new tool. What’s more, this tool is free, and for the first time EVER, it is accurate.

But wait! I hear you cry, there are already numerous free site valuation tools on the market.

No there are not!

There are site valuation gimmicks, designed to inflate your ego and trick you into linking back to them. These tools are for fools, and they are severly damaging and confusing in an already noisy industry.

In fact, I decided to test out this new tool on my personal blog… the tool asked a lot of sensible questions, such as:

Domain name,

Monthly Profit,

Cost to maintain,

Expertese required to run it,

& a lot more…

When it finished, I hit submit, and got my valuation… and you know what, for the first time ever, I found myself nodding in agreement.

Actually, it was a little lower than I had hoped, but I couldn’t disagree with the valuation at all. It seemed to know the true valuation better than I myself did.

So today is the day that the website buying and selling industry can breathe a sigh of relief… the weight has been taken off our shoulders, there is now in my opinion a definitive overview of the site valuation procedure, and hopefully the industry will use it and we can all benefit from it for years to come.

That said, it is more than likely people will stick with the stupid gimmick tools, and continue to pull valuations out of thin air… but hey, at least now we have an alternative.

Thanks Clinton for boldly going where no man has gone before, this is one giant step for Internet businesses, one giant leap for the site buying and selling industry.

Midascode