Name Appraisals with a Grain of Salt — Take Domain
Domain name owners ought to not get overly excited — or dejected — regarding an appraisal of their domain names.
How much is that domain name worth?
It’s a tough question, and one that domain name appraisal firms and your domainer peers would like to help you answer.
I have a secret: in the late 90s I was a domain appraiser. People submitted domains to me and I wrote up evaluations of their value based on a number of factors. But I realized over time that appraising domains was an uphill battle. Many people would respond back “how can this domain be worth only $5,000, I just got an offer for $10,000!” There were little domain sales data back then. We didn’t have DNJournal and sites like NameBio. I came to understand that you needed these comparable sales comps, and at the time the only people who had them were sites like GreatDomains.
Today you can get domain name appraisals from firms like Moniker and Sedo, which do have an extensive database of domain sales. But it’s still not as simple as appraising your house. I heard from someone the other day who was interested in a four character domain. He asked Sedo for an appraisal and they came back with $1,500, which seemed reasonable to me given the characters. The owner of the domain wanted $75,000. How do you reconcile that?
Just as you shouldn’t get excited if one of your names is appraised for millions of dollars, you shouldn’t automatically feel dejected if you get a low appraisal.
Here’s a case in point. In May 2005, the owner of WirelessPhone.org asked for an appraisal at DNForum. The first response was “Reg fee”, which means the appraiser thought the domain was worth only the price of registration. In January this year I bought WirelessPhone.org for $1,000. I sold it in the last TRAFFIC/Moniker auction for $2,000.
The owner of WirelessPhone.org could have been dejected and not followed his convictions. But he was just smarter than the appraiser.
I buy and register lots of domains related to prefab housing. Most people don’t see them as valuable. But I see a trend toward more prefab housing, even upscale prefab (just pick up an issue of Dwell Magazine). I think they’ll be worth a lot someday. But we’ll have to wait and see.
