I wanted to write about domain appraisals long time ago, as I believe it’s something that many rookies get drawn into.
Domain appraisals are basically the price that either a person or a piece of software thinks that your domain name is worth. As far as software domain appraisals go, there is generally a wide gap between the appraised value and an actual sales price.
Some are accurate, but some are highly inaccurate. A typical domain appraisal website uses parameters such as
CPC (cost per click)
Keyword data
Past sales
Type in traffic
These parameters will reveal a dollar value for each domain name.
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To test out automated domain appraisals, I put 10 random recently sold domain names into Valuate.com’s appraisal website. Here are the results:
As you can see, the automated appraisals were pretty accurate on 2 domain names – Rides.com and Encinitas.com. As for the rest, the appraisals didn’t even come close the the actual domain sale price.
Take these automated appraisals with a pinch of salt. Automated domain names can be valuable to see whether the domains you hold have any value at all. If you have a larger portfolio, this can be a useful way to see which domains to keep and which to drop.
They’ll never be completely accurate, but are worth looking at. The two largest domain appraisal websites are Estibot.com and Valuate.com.
There are plenty of companies who offer human domain appraisal services. Meaning that for a certain price, a staff member will evaluate your domain name and tell you how much they think it’s worth. I never use domain appraisals from any company as I believe this they will never accurately value your domain name.
All they can do is charge you a fee for giving their opinion based on certain parameters – largely the same as an automated appraisal which was mentioned above.
Here’s an appraisal for all of your domains collectively: they’re worth what someone is willing to pay for it at a given time.
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Domain Appraisal Scams
Domain appraisal scams are an old trick used to try to get money from you by requesting a domain appraisal on a domain name you own. Here’s how a typical domain appraisal scam works:
1. The scammer sends you an email telling you they’d like to buy your domain name
2. You send back a price, and they agree. You get excited at the thought of what you’ll do with all of that money you’re about to receive.
3. Before they send over the money for the domain, they want to get an appraisal of your domain name from a trusted source.
4. They give you a link to either the appraisal website itself or a “blog” showing you the value of domain appraisals. Either way, the scammer will own both of these websites.
5. You go to the domain appraisal website and pay someone to appraise your domain name.
6. You send the appraisal to the scammer, but you never hear from them again. They have your money, and you have a worthless appraisal.
I’ve been caught out by this type of domain appraisal scam in the past. In my defense, I’d only just started to buy and sell domains. I’d just bought a domain name that I thought would sell well, and a few weeks later I was pleased to see what I thought was an offer for the domain name in my inbox.
The “buyer” was interested in acquiring the domain, and I immediately responded with a price of $35,000. They agreed to buy the domain name on one condition: I get it appraised. Being a naïve know-it-all, I bought the appraisal, which cost over $100, and subsequently never heard from the buyer again.
It was an expensive lesson to learn when you have very limited funds to start with. You do still see these emails being sent out, so please be careful. You should never need to pay for a domain appraisal.
Since then I’ve dealt with hundreds of genuine buyers from startups to Fortune 500 companies. The words “domain appraisal” have never been mentioned in any conversations.
