debate Are Appraisals really necessary?

[uglydork]

@Darryl Lopes and I had a fun twitter discussion this morning on the merits of domain name appraisals and their merit.
Do you need an appraisal and does it really matter?

 

[Jason Baudendistel]

Appraisals are worthless. Would you have appraised Voice.com at 30 million? A domain is worth whatever a buyer will pay and not what someone appraises it at.

Respectfully disagree that they are worthless, merely not a guarantee of sales price. An appraisal can be used as a negotiating tool but ultimately what is paid is solely the buyers discretion.

 

[DomainRecap]

Who cares. Of course Voice.com appraise at 30 million now. They always update names like this that sell with the current sale price.

So you're actually telling me that prior to the sale, Voice.com would not have finished as the top? Really?

 

[Joe N]

Respectfully disagree that they are worthless, merely not a guarantee of sales price. An appraisal can be used as a negotiating tool but ultimately what is paid is solely the buyers discretion.

I think what you'll find is that those who need to be talked up using this tactic, are never going to buy your name for the price you want.

The ones who are willing to pay, will do so without needing to see an appraisal.

Either a buyer knows the value of a good name or they don't. They're not going to drop thousands on it just because the random website you pointed them to says it's worthwhile.

 

[bmugford]

Automated appraisals can be useful to parse through large lists of domains, but the actual number is rather meaningless.

Brad

 

[equity78]

I think what you'll find is that those who need to be talked up using this tactic, are never going to buy your name for the price you want.

The ones who are willing to pay, will do so without needing to see an appraisal.

Either a buyer knows the value of a good name or they don't. They're not going to drop thousands on it just because the random website you pointed them to says it's worthwhile.

Exactly Joe, domainers talk in places like Namepros and domainer twitter and get this group think, that guess what? No one else anywhere on this planet cares about. There are more people in this world that will tell you why what you are doing for a living or a side hustle shouldn't even be legal (hoarding, rent seeking, extortion) than will ever say, "Oh thanks we had budgeted $1,000 but something called Estibot or Afternic professional appraisal said it was worth $30,000. Do you accept American Express?"

 

[equity78]

Who cares. Of course Voice.com appraise at 30 million now. They always update names like this that sell with the current sale price.

Right because they don't want to look as bad as they usually are.

 

[Kassey Lee]

Do you need an appraisal and does it really matter?

No, what I need are genuine end users for my domains as better upgrade. The worst domain appraiser in the world

 

[BaileyUK]

There's probably only about 6 or 7 members here on namepros that are really capable of giving a fairly accurate assessment of a domains 'market' value. And to my knowledge none of them do appraisals.

Appraisal threads are basically for those who don't have a clue looking from reassurances from those that equally don't have a clue - and in most instances they receive it.

The recent "list your ten top domains" should've opened a lot of eyes to the very narrow band of active members that actually know this business well enough.

 

[Bob Hawkes]

Either a buyer knows the value of a good name or they don't.

While there is a lot of common sense in what you say, and I suspect your conclusion does accurately apply to the majority of buyers, I think at the same time there are some who need to assurance of some 'third party' view that substantiates the price they are going to pay. I worked two long in organizations that constantly spent money on appraisals, evaluations. consultant reports etc. for almost every major decision they made from property purchase, equipment, services, rentals, liability considerations, insurance, investments, etc. An efficient and trusted third party that could suggest a range in reasonable worth for a domain name would help propel some decisions forward in my opinion (whether that is human, robotic or probably a hybrid).

On a different level I have in past been in nonprofits that even when the amount is tiny need some disinterested party stamp that an expense is reasonable.

Bob

 

[Joe N]

While there is a lot of common sense in what you say, and I suspect your conclusion does accurately apply to the majority of buyers, I think at the same time there are some who need to assurance of some 'third party' view that substantiates the price they are going to pay. I worked two long in organizations that constantly spent money on appraisals, evaluations. consultant reports etc. for almost every major decision they made from property purchase, equipment, services, rentals, liability considerations, insurance, investments, etc. An efficient and trusted third party that could suggest a range in reasonable worth for a domain name would help propel some decisions forward in my opinion (whether that is human, robotic or probably a hybrid).

On a different level I have in past been in nonprofits that even when the amount is tiny need some disinterested party stamp that an expense is reasonable.

Bob

But have you had experience with any companies being convinced to pay X amount for a domain because of an appraisal?

 

[Bob Hawkes]

But have you had experience with any companies being convinced to pay X amount for a domain because of an appraisal?

I have not personally. My point was more that especially in board/committee decisions an appraisal, if consistent with a price that they have almost accepted, will help them justify/have confidence and move forward.

 

[Joe N]

I have not personally. My point was more that especially in board/committee decisions an appraisal, if consistent with a price that they have almost accepted, will help them justify/have confidence and move forward.

In most cases I would agree. Just not when it comes to domain names, where the industry is unregulated and the appraisals are mostly automated.

Unless a company had a pre-existing relationship with a professional in the industry, any appraisal would be met with skepticism (as it should).

 

[equity78]

In most cases I would agree. Just not when it comes to domain names, where the industry is unregulated and the appraisals are mostly automated.

Unless a company had a pre-existing relationship with a professional in the industry, any appraisal would be met with skepticism (as it should).

Exactly there becomes this thing of who is qualified? Go ask Rick Schwartz or Mike Mann how many people in the entire world they believe are qualified to give a proper appraisal valuation on a domain name, I am willing to bet it would be less than 10 in the entire world.

What does an appraisal from an avatar mean? I joined Namepros last year let me evaluate your names. WOOHOO. Sure but first answer what I have always believed was the most important questions to anyone offering advice,

What do you own? What have you sold and what have you developed? After that is answered we can move forward.

@BaileyUK said it perfectly "Appraisal threads are basically for those who don't have a clue looking from reassurances from those that equally don't have a clue - and in most instances they receive it."

In an industry of echo chambers people are seeking reassurances because they have little to no self confidence in their own ability in buying and selling domain names.

 

[uglydork]

This was all precipitated by a conversation I was having on twitter about Mike Manns sales. Im sorry of Im in the minority but I don't believe them all.
BUT......if those sales are real who would have them appraised at the prices in which they sell?
Domains are worth only what a buyer will pay - period.
I sold hatred.com by pure dumb luck at 6 figures. Was it appraised anywhere near that - hell no!
Its all perception and perception doesn't become reality until money exchanges hands no matter the made up valuation of some expert or machine

 

[BrandEntrance.com]

@Darryl Lopes and I had a fun twitter discussion this morning on the merits of domain name appraisals and their merit.
Do you need an appraisal and does it really matter?

As a temporary boost if they go in my favor, or a proof that people are out to get me if they go the other way.

 

[BrandEntrance.com]

Domains are worth only what a buyer will pay - period.

Yes but there are millions of potential buyers and they all think differently, have different needs and different ways of valuing and of course different budgets... ergo... every domain has the potential to surprise everybody else.

 

[bmugford]

Domains are worth only what a buyer will pay - period.

That is only half the equation. You also need a willing seller.

I have turned down offers in the past where some potential buyer will say you will never get a higher offer, then I sell it for 10x or 20x that price.

It takes a willing buyer and a willing seller. Some single buyer willing to pay some amount has limited correlation to actual value IMO.

Brad

 

[NameBuyer.com]

That is only half the equation. You also need a willing seller.

I have turned down offers in the past where some potential buyer will say you will never get a higher offer, then I sell it for 10x or 20x that price.

It takes a willing buyer and a willing seller. Some single buyer willing to pay some amount has limited correlation to actual value IMO.

Brad

These are my favorites and there's something about it... When I get an email like this, I know a sale is going to happen in the near future.

If I priced the domain today, I would have upped it to over $20k. But still, much better than the $99 offered.

 

[frank-germany]

So you're actually telling me that prior to the sale, Voice.com would not have finished as the top? Really?

yes

 

[frank-germany]

This was all precipitated by a conversation I was having on twitter about Mike Manns sales. Im sorry of Im in the minority but I don't believe them all.
BUT......if those sales are real who would have them appraised at the prices in which they sell?
Domains are worth only what a buyer will pay - period.
I sold hatred.com by pure dumb luck at 6 figures. Was it appraised anywhere near that - hell no!
Its all perception and perception doesn't become reality until money exchanges hands no matter the made up valuation of some expert or machine

domain worth is not existing

all there is
is worth to a buyer

but that's not existing as well

as all there is
is an understanding of that buyer
of the value of that domain

now that maybe be wrong

if it's too low
and you know better
you may be able to enhance the buyers understanding

but still, he might not reveal
that he understood


so what boils it down to:
you need a buyer that understands it
and now it's your task to
understand his real value
and communicate that to buyer
and convince him to pay you that price



no tool could ever do that

not even you can do that
nor the buyer