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Favorite Reply to a Domain Appraisal

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On occasion when dealing with buying a domain name from someone who doesn’t have much domain name experience, I will receive a counter offer that mentions a domain name appraisal. Typically, the person wants to justify a higher asking price with a domain name appraisal they received at some point. More often than not, the appraisal was purchased, so it comes from one of the leading brokerages.

In the past, I would explain that I think domain appraisals are BS for many reasons, including the fact that they are offered by companies who want to sell the domain name on behalf of the owner, so a higher appraisal makes it more likely that they will sign an exclusive listing. I have a “boilerplate” response somewhere in my email archive, but lately I’ve preferred to respond more humorously:

If domain appraisals were even remotely accurate and reflective of the real world market, I would have already sold my domain portfolio, retired, and have not inquired about your domain name.”

As you can see, I strongly dislike domain appraisals. Whether I have an email or web page that says me domain name is worth $1 million or $100, it is only worth what someone will pay me.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (24)

    JP

    I like to say: “see if the appraisal service (which is usually someone who also buys domains) will buy it for een 25% of what they appraise it at”.

    September 5th, 2013 at 12:51 pm

    Domenclature.com

    @Elliot,

    It’s always curious to watch you present posts that represent you as chiefly a domain buyer, or an end user; it’s bizarre because, we all know you more aptly as a domain seller (a ‘domainer’).

    So, you often write anti-industry articles because of this. Domain appraisal is not a bad thing. It is not an exact science, just like in other industries: antiques, jewelry, autos..

    Appraisals give guidance. Water eventually finds its level. The market is the real appraiser.

    Every body does appraisal of something several times a day. It doesn’t mean you have to buy whatever you appraise. A black Mercedes-Benz passes by, and you say “that must be over a hundred grand”, doesn’t mean you’ll lay out the dough for it. It’s just an appraisal.

    The appraisal services do a good job for the domain seller, and yes, that’s you Elliot. You are first and mostly a domain seller, a domainer. You are not an End User. Elliot is a domainer. We all buy domains, but we identify as domain investors, not domain buyers. Whether you “acquire” domains, or “Register” them, or both, you are a domainer.

    Therefore, you stay inside and piss out, rather than the other way around. Just my observation and opinion. :-)

    September 5th, 2013 at 2:13 pm

      Elliot Silver

      Clearly I am buying names as much as I am selling them.

      September 5th, 2013 at 2:26 pm

      Domenclature.com

      @Elliot,

      Even if you are buying as much names as you are selling (which is a herculean feat I must say) that doesn’t change your role, as far as which side you should support. You should be on the side of domainers, by that I mean the domain industry’s appraisers, bloggers, markets, sellers, etc

      If a product helps the seller more than the buyer, you should be for it. No?

      September 5th, 2013 at 2:34 pm

      Elliot Silver

      You don’t know how many names I sell so it would be hard for you to say it is a Herculean effort.

      In any case, I do not have to choose sides. This is business not sports. I am an advocate for my own business.

      September 5th, 2013 at 2:37 pm

      Ron

      Well I remember last week when someone asked the price of drafting.com in the comments section you quoted $125K, next day it was listed for sale in a thread by you in the $40K range… so you are essentially describing yourself above

      September 5th, 2013 at 2:45 pm

      Elliot Silver

      I have quoted it to end users, and obviously the target audience is different when pitching to domain buyers. It was more than $40k though.

      That said, my $125k price was based on my desire to sell and my perceived value. I didn’t try to justify it with an appraisal from a third party, which in my opinion, is meaningless. Had one of those interested end users made a serious offer for the domain name in the $40-60k range, ignoring my price, they could probably get a deal done. Timing is everything though. I was more motivated to sell inventory a week ago than I am today :)

      September 5th, 2013 at 2:48 pm

      Domenclature.com

      @Elliot,

      BTW I sent in a ballot to Schwartz on August 29, casting vote for you as Domainer of the year because of your domain sales, DomainSherpa as Best Blog, and Eric Borgos for Hall of Fame.

      (Schwartz has my permission to confirm).

      September 6th, 2013 at 1:25 am

    Domenclature.com

    “You don’t know how many names I sell so it would be hard for you to say it is a Herculean effort”.

    I did not doubt you. I believe you, still it’s not an easy thing to do; not everybody is an ‘Elliot’. I know for example, I buy way more than I sell. I wish I could sell half what I buy. Just because you can do it doesn’t mean it’s not difficult.

    You do not have to choose sides? Really? It’s always like I’m meddling in your business, but that is not my intention. Now that you have stated it emphatically, I will accept it. I just thought that we all blog to fashion a teeming domain industry while maintaining our individual businesses, and play it forward.

    September 5th, 2013 at 2:46 pm

    Domenclature.com

    @Ron,

    I changed my logo since you criticized it unfairly.

    September 5th, 2013 at 2:48 pm

    Aaron Strong

    Very well said. If domain appraisals were even close to being accurate, I too could retire….as so could the majority of the people reading this now. Domain appraisals have no relevancy for domainers or end users.

    September 5th, 2013 at 2:51 pm

      Domenclature.com

      @Aaron Strong

      ap•prais•al (əˈpreɪ zəl)

      n.
      1. the act of estimating or judging the nature or value of something or someone.
      2. a valuation, as for sale or taxation.
      3. an estimate or considered opinion. Sometimes, ap•praise′ment.
      [1810–20]
      Random House Kernerman Webster’s College Dictionary, © 2010 K Dictionaries Ltd.

      Just like anything, you have good appraisal, and you have bad ones; the discipline itself is good. We have to have one. Good appraisal services give examples or similar sales, and outline the factors taken into account. I don’t see how we can condemn appraisal services in general. Perhaps you can name particular outfits, and condemn them for poor work, but not the entire sector. There’s hardly any way to do domaining without appraisals, formal or informal. Someone how, sales comparisons must enter the equation.

      September 5th, 2013 at 3:01 pm

    Domain Investor

    Anyone who gives their opinion on the value of a domain is giving an “appraisal” of sorts, and it’s usually based on nothing more than a gut feeling. A tool like Estibot actually gives metrics as to how it calculates a value. Who’s “appraisal” is more accurate? Someone should run a study on this.

    To universally condemn appraisal services is to shoot oneself in the foot. Quote an appraisal when it is in your favor. Non-domainers and end-users will often accept an appraisal as a fair way to value a domain name. When an appraisal is not in your favor, simply state that they are inaccurate and that there is no established, accepted way to appraise a domain name. When you’re the seller in this instance, send them links to the “Top Domain Sales of All Time” charts.

    September 5th, 2013 at 5:37 pm

    Domain Buyer Broker

    I might use a domain appraisal if it is in my client’s favor, otherwise I disregard.

    The value of any domain really is a meeting between the motivation of the buyer and the seller.

    If the buyer is motivated to buy but the seller is not, the price is high.

    If the seller is motivated to sell but the buyer is not, the price is low.

    September 5th, 2013 at 6:00 pm

    craig

    Appraisals are almost indefinable.
    The true value of any domain is the value added to the business that buys it. This not easily determined. Do we mean long short, or whatever term? Will it be used properly to best advantage or otherwise.
    My perspective………..If I owned a local business, I would run roughshod over any thing or anybody that got in the way of my owning the .com of my exact search term! Just the way I see it.

    September 5th, 2013 at 7:57 pm

    Alan

    The only “appraisal’ that counts is the price someone is willing to pay you.

    September 5th, 2013 at 8:03 pm

    WQ

    An appraisal needs to have two prices.

    What you can get for the domain if you want to sell ASAP and what you *may* get if you hold long term and wait for a potential end user.

    Two very different prices.

    It’s also important to make note, by the appraiser, that the end user price, may never come around.

    As a buyer, I am looking to buy for todays price in hopes to sell for tomorrows.

    September 5th, 2013 at 8:52 pm

    Davinderpal S Bhatia

    I had a domains appraised for $$$ which I sold for $$,$$$. And one extreme example was appraised for $ 450,000 which I could not sell for even $ 500 and finally let it expire.

    September 5th, 2013 at 10:00 pm

    Danno

    As sellers, we all “appraise” our domains when coming up with an asking price.

    We often “appraise” a name higher when dealing with an end-user and lower when dealing with a fellow domainer.

    Doesn’t matter if the price is arbitrarily set, or if it’s based on researching previous selling prices of similar domains. It is still an “appraisal”.

    And someone else’s “appraisal” of your domain is just as valid as your own, and often just as meaningful.

    Ask yourself this question: Would YOU purchase this domain for the price you are asking? If not, then how do you justify your asking price?

    Food for thought.

    September 6th, 2013 at 4:24 pm

    Raider

    Not all appraisals come from domain broker’s Elliot, I do agree the ones that do are often slanted, usually appraising low in a effort to move domains through their brokerage.

    I don’t use appraisals a lot, but I DO use them from time to time, and when I do it’s from a reputable and independent appraiser.

    Appraisals, no matter how much you don’t like or use them, they can be beneficial when negotiating price, It’s a tool that provides not just values but analytics that help justify the price a seller is asking.

    September 7th, 2013 at 11:48 am

      Elliot Silver

      Who offers reputable independent appraisals that doesn’t have a brokerage or broker service? As far as I am aware, most people get domain appraisals from Go Daddy, Afternic, Sedo, or domain brokers. I assume you aren’t referencing automated appraisals since you said “reputable.”

      Frankly, I can’t think of a company that doesn’t have a domain brokerage that would be qualified to give appraisals. In theory, an expert like Mike Berkens or Frank Schilling could give appraisals, but I would assume they wouldn’t spend their time giving away detailed appraisals.

      I agree an appraisal can be used as a negotiating tool, and as you can see above, that is how I reply to someone who tries to use it as a means of getting more money from me when I want to buy a domain name.

      September 7th, 2013 at 11:53 am

    Raider

    http://appraisedomains.com/

    They were once appraising domains for Afternic and went independent some time ago, I’m surprised you didn’t know of them.

    And I’m not affiliated with the site whatsoever, just a happy customer.

    Your a reseller Elliot, and if I was to try and sell a domain to you, (which I wouldn’t do because I don’t sell to resellers) I would NOT use an appraisal because I would know your already educated in the value of domain names, and you can obtain the analytics yourself, And I don’t even have to sell you on the name because you already sold yourself on it.

    End users on the other hand is a entirely different situation, it’s where the real profit is.

    September 7th, 2013 at 12:35 pm

      Elliot Silver

      The name doesn’t ring a bell to me.

      For me the bottom line is this (and the point of my article).

      Many people use a domain appraisal as a selling or buying tool. As the counter party, this is one response I use to try and neutralize the tool.

      September 7th, 2013 at 12:40 pm

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