Newbie Domain Tip #1: Don't Trust Appraisal Sites To Judge Value!

[Skinny]

Hey guys,

I'm not going to walk in here and claim to be some sort of expert or a professional domainer.

But I have learned a ton about domains and have flipped quite a few for quick profit.

The first thing that most newbies (and I use that term in a non-condescending manner) will do is try to value a domain they just bought or registered.

So many will hit up site's that do free appraisals. Then they will try to sell it on a forum and say something like:

"Buy [insert domain here]! It was appraised at [insert inaccurate value here] at [insert appraisal website here]!"

Of course the sale won't go through because the value of the domain is way off.

To prove how wacky these appraisal sites are I'm going to take one domain:

Cardiology.com

Here are the appraisals I got:

DomainTops - $9,957
Estibot - $310,000
LeapFish - $9,548.00
NameBoy - $28,246

It actually sold recently for $550,000!

What I'm trying to say is not that these appraise the value too low (it's often the other way around), but that no script will EVER accurately value a name.

The rule is: your domain is worth what someone is willing to pay for it.

If I wanted to pay $10 for cardiology.com and no one else cared for the name that is roughly what it would be worth.

Skinny

[Malok]

Yup, right on.

Read this article:
http://money.cnn.com/magazines/busin.../01/100050989/

Then go check the "values" assigned to some of the sites that Kevin Ham purchased.


As just one example:
Greeting.com, Leapfish assigned $54 to it.

Ham purchased it for $350,000.


A slight difference.

[Hostnetric]

Excellent post Skinny. It is amazing the number of people that believe a free service is going to give an accurate appraisel. In fact as you stated it is purely what someone gauges the value of the domain as and what they plan on doing with it. If they believe that they can make millions from it then they are going to be willing to pay an extreme premium to secure the domain they really want. Alot of selling a domain is waiting for that right person and moment.

[Skinny]

Yes . . . the problem is that newbies don't understand what factors go into the real appraisal of a name (always a range).

So they turn to these sites thinking that it can magically give them the answer when it is very innacurate.

Skinny

[Hostnetric]

Originally Posted by Skinny

Yes . . . the problem is that newbies don't understand what factors go into the real appraisal of a name (always a range).

So they turn to these sites thinking that it can magically give them the answer when it is very innacurate.

Skinny

Agreed. To many of these sites have a tool that you put in answers to questions and if you are inexperienced to begin with you are going to get some outrageous number one way or the other. Even when paying for an appraisal it is purely subjective to what the person who appraises the value believes what the actual worth is.

Ultimately the worth or your domain is what the person wanting it is willing to pay you for it and what you will accept.

[Michael_Goldman]

estibot is the only that should be used.. not trusted of course, but a good one to use.
It uses the data from previous sales, so it's much better than the rest.

[Hostnetric]

Originally Posted by findinforums

estibot is the only that should be used.. not trusted of course, but a good one to use.
It uses the data from previous sales, so it's much better than the rest.

Maybe so, but it is still simply a tool and cannot tell you what someone will really pay for it. As skinny pointed out the domain name went for much more than any of those sites suggested. So the person buying it believed it was worth much more.

[Michael_Goldman]

Originally Posted by Hostnetric

Maybe so, but it is still simply a tool and cannot tell you what someone will really pay for it. As skinny pointed out the domain name went for much more than any of those sites suggested. So the person buying it believed it was worth much more.

yes, that is exactly what I posted

These tools also good to get the other data quick, like overture, google results etc.

[Hostnetric]

Originally Posted by findinforums

yes, that is exactly what I posted

These tools also good to get the other data quick, like overture, google results etc.

I will say one thing for estibot though. It is by and far the best automated domain appraisal tool I have found. Even though its valuations are lower based on what the domains actually sold for it is still pretty close for the most part. If I ever had to look for a tool to give me an idea and a base with which to begin my bid with I would probably look at their site to give a hand in figuring out what I wanted to offer.

[Michael_Goldman]

true, also take into consideration that most big sales we see around and in the previous sales history, like in dnsalepirce.com, are end user sales, or auction sales, which are generally higher (sometimes even considerably higher) than the average market price.

The vast majority of the sales are conducted in domain forums, or privately and thus don't get reported.

[Skinny]

Hostnetric and findinforums you both make great points.

Estibot is probably the "best" out of them because the algorithm is constantly being tweaked as trends change.

But it isn't something that one should rely on.

Skinny

[Hostnetric]

Originally Posted by Skinny

Hostnetric and findinforums you both make great points.

Estibot is probably the "best" out of them because the algorithm is constantly being tweaked as trends change.

But it isn't something that one should rely on.

Skinny

I totally agree. Everyone will of course sell and buy domains according to what they believe it is worth to them.