I think it’s time to appraise the value of domain name appraisals. Let’s use some recent real world figures here.

I received an email inquiry last week on one of my domain names.

It went something like this:

Hi, would you be interested in selling [name intentionally left out].com?

Thanks,
[name removed]

I did the normal checks to see if it was a “credible” inquiry. Google searches, etc. It helped that the potential buyer also took the time to actually make a phone call also inquiring about the domain name.

This particular domain name was one that I had recently started developing. I had a nice “how to” article on the site that ranked well in all the major search engines. I wasn’t actively trying to sell this domain/site. My plan was to hold on to it and build.

As part of the negotiation, the buyer suggested a domain name appraisal to help determine a reasonable asking price for the domain.

I didn’t really have a solid figure in mind, so I figured, why not. I even decided to pay for the appraisals myself. I figured, even if the domain sale didn’t go through, it would be interesting to see how close two different services valued the same exact domain name.

I ordered a domain name appraisal from SEDO and from Moniker. Both leaders in domain name aftermarket sales.

Both companies offered an “expedited” appraisal for a few dollars more, so I selected that option. Moniker ($39.99) says their appraisals will be done in 4 business days, SEDO ($49) says theres would be done within 3 business days.

SEDO Appraisal Review:

I ordered the SEDO Premium Domain Name Appraisal on Wednesday, April 30th at 9:49am and I got the appraisal back on Thursday, May 1st at 2:24pm. A little over 24 hours and they delivered a 6 page PDF formatted appraisal that said their valuation of the domain was for $1400.

The appraisal was broken down into 12 points, including a section that contained 3 comparable past domain sales.

Most of the text in the appraisal was from a pre-written template, however it was clear that they took the time to look at the industry and the keywords in the domain name.

Although I didn’t agree with some of their valuations (they didn’t take into account the current site traffic), it was definitely a professional appraisal.

MONIKER Appraisal Review:

I ordered the Moniker Expedited Domain Appraisal Service on Wednesday, April 30th at 10:22am and I got their appraisal back on Monday, May 5th at 10:22pm. A little over 3 business days (but still within their promised turnaround time), and I received a notification via email that I could view my appraisal report online.

I thought the online viewing was a nice feature because it’s so much quicker to view an HTML webpage than to fire up the latest Adobe acrobat reader to read a simple text file. Moniker also offered the option of “publishing” the appraisal so I could just send a link to the buyer.

Moniker’s appraisal was based on 18 different factors and they included over 5700 comparable sales to come to a valuation of $6,365.76 for the domain.

The appraisal again included a lot of default template type text, however, by looking at the reports they ran and the categorization of the domain name, it was clear that they took the time to try to get some good background on the domain name.

I thought my domain name was “pretty darn good” for the industry it was in, but a $6300+ valuation seemed high even to me :) Maybe with the right convergence of timing, motivated buyer with the right budget, but for a general sale, I was a bit leery.

The Actual Sale Price:

Luckily for me, after a very short period of haggling, the sale of the domain name went through! I’m not sure if I was more excited about closing the sale, or the fact that I got to report back on how close to the mark the appraisals were.

I know it’s probably bad salesmanship to say your domain name isn’t worth as much as an appraisal said it was, but I’m all for being realistic.

The buyer and I both agreed that the appraisal valuation of Moniker was a bit high, and I felt that due to the domain keyword value and ability to recoup the sales amount with a few leads from the existing domain traffic, that the SEDO appraisal was a bit low.

So I took the two figures, and came up with an average. I put my asking price of $3500 below that average.

The buyer countered with an offer of $3000 and the deal was sealed.

So when you get an unsolicited offer for one of your domain names and you aren’t sure what to ask, instead of relying on one domain name appraisal service, it might be worth it get 2 appraisals of the domain and find a nice middle ground.

This is the second appraisal I’ve ordered from Sedo and my first appraisal I’ve ordered from Moniker and I’d definitely order from both companies again.

PS. As a side note, it was nice dealing with a buyer I could “trust”. He didn’t try to hide behind a throw away hotmail address, he didn’t try to hide his place in the industry. He didn’t try to lowball the offer and he remained professional even when offering reasons why the domain may not hold as much value. So when it came to closing the sale, we were both comfortable enough with each other to forego the lengthy escrow.com process. We opted for a quick PayPal transaction with an eNom push. The entire sale and transfer took all of 5-7 minutes. It’s always a pleasure dealing with professionals in this business.