Subject: Seeking advice for executing the sale of my website.

It appears that I have a couple of motivated purchasers for my
existing website, and am seeking advice regarding the ?mechanics? of
the sale. The potential purchaser/s and I have agreed on the price
range, but neither of us is certain about the procedural aspects of
the sale.

I have sold a few ?brick & mortar? businesses prior, so am familiar
with the general due diligence process, but am not sure how they apply
to ?virtual? types of businesses, such as a website with no assets or
cashflow.

This seems like a simple transaction compared to most business sales,
but nevertheless, I understand some procedural advice would be
beneficial. The sale price does not warrant expensive professional
fees, so both the potential purchaser and I want to keep this a simple
transaction.

Items:

** MY EXISTING WEBSITE:
1. Is being offered for less than $10,000 USD.
2. Is being sold as a ?tool? for the new owner, who will tweak the
content and functionality for his own specific needs (close fit)
rather than developing his own site from scratch.
3. Has no cashflow or revenues.
4. Is fully completed, operational, and turnkey
5. Is developed in Canada, with the purchaser/s in the U.S.


** I AM SEEKING:
1. Information regarding the actual ?process? of the sale: 
a) x% deposit?
b) What is the Order of Events? 
c) How do I actually transfer the site to the buyer? (legal transfer?
Physical site transfer?)
d) Is there an expectation of my ongoing technical support? (I don?t
have much, as I purchased expertise for the site development)
e) Other relevant procedural advice

2. Advice regarding Documentation requirements:
a) Will a Letter of Intent suffice? Or is a comprehensive contract required?
b) Other documents, such as Transfer of Ownership, etc, required?
Where do I get these? Draw up myself?
c) Can I get a contract template specifically for this type of business sale? 
d) If I draw up my own contact, what points should be included?

** I AM NOT SEEKING:
1. Advice on how to determine the selling price (already ballparked & agreed)
2. Advice on where to advertise my web business for sale (completed)
3. General novice information (eg: How to prepare your business for sale, etc)

I look forward to your advice.

Hello biz2005-ga,

I sold a domain name that had personal value to me, but commercial
value to a business a few years ago, and the transaction went
flawlessly. Please note am answering this question as advice only
(from personal experience and research), and not from a trained legal
viewpoint. It is always better to consult with a lawyer whenever
possible.

It seems that the person is buying:
-the domain name
-the source code/content and all the rights to it

The order of events is as follows:

You come up with the contract (sample template is here:
http://www.buysellwebsite.com/exchange/sample_contract.htm) Simply, it
needs to:
a) describe your website (IE: number of html pages you have on your
website, size of all the content/source code etc. and perhaps a
listing of the major features). Make sure that you specify that all
content/source code is provided as-is.
b) In my opinion, there should not be an expectation of on-going
technical support. If you want to include this, perhaps you should be
very specific as to what will be required of you. I think a
"good-faith" agreement where you agree to assist in limited support
over email might be ok. You could also say that the support is only
required while both buyer and seller are mutually willing and able to
help. I would advise against this because it might set you up to being
"required" to help.
c) Complete payment should be required in advance, with clear
guidelines as to when certain events will happen after that. (IE:
domain transfer will be initiated within 24 hours of payment being
verified). You could have a non-refundable deposit to ?turn off? the
website, but I don?t think this is relevant to your case because you
are not losing revenue during the transition period.
d) Ask your hosting provider if they will allow the
name/address/credit card information on the account to be changed
completely. If not, you would make a backup of the entire website
source code/content and transfer them to the purchaser through a CD-R
or other physical/digital transfer. Make sure the contract reflects
what your hosting provider will do and what your purchaser wants
regarding who will be hosting the website. Really, this should not be
a problem on the part of your hosting provider because they will want
to keep the business.
e) Transferring domain name ownership is slightly different with each
Domain name registrar. Contact yours and ask them how to initiate this
transfer so that you are prepared when you need to do it.

Specific answers to your questions:
1a) 100% paid before transfer begins.
1b) 
-Write up a contract/letter of intent (see above)
-Get it signed and witnessed on both ends
-Await payment.
-Transfer the domain name ownership (through your current registrar)
-Provide a physical media copy of the current content/source code to
the purchaser. (Make sure you have a backup in case something goes
wrong with this transfer).
-If the purchaser wants to use the same hosting provider, make sure
your credit card information is removed from the hosting account and
have your hosting provider change ownership of the monthly payment to
the purchaser. If they are using their own host, cancel your hosting
account (after making multiple backups of the content/source code).
-Be helpful and make sure that the purchaser is satisfied.

1c) I would do a physical transfer as well as trade username/password
information (provided their account information gets added to the
hosting provider). If you do a physical transfer of the source
code/content and specify this in the letter/contract, it is easier to
verify that you have met the requirements if there is disagreement
over what they were buying. The legal transfer will be the
contract/letter of intent that becomes binding once payment arrives.

1d) Already answered above, I would recommend against this, at least
in the contract/letter of intent.

1e) Make sure you are able to technically transfer ownership of the
domain name (just be familiar with the process of your registrar) and
that you are able to transfer ownership of the hosting account (check
with your hosting provider). If the purchaser is unable or unwilling
to use that hosting provider, make sure that the contract/letter of
intent specifies that a physical copy of the source code/content will
suffice.

2a) A comprehensive contract created by a lawyer is always better, but
a letter of intent/contract created by you that is CLEAR will suffice.
2b) Some registrars require documentation when transferring domain
name ownership, others do not. This is something you will need to
check with your hosting provider about.
2c) Here is a sample contract template with additional information for
you: http://www.buysellwebsite.com/exchange/sample_contract.htm
2d) Already included this information above.

Please let me know if there is anything you need me to expand upon or
clarify and I will do my best to further assist you.

All the best and congratulations on your success,

tisme-ga