Are automated domain appraisals accurate?

[Linnie]

Hi, I am new to domaining, I've been learning for a few weeks and bought about 20 domains. I keep finding domains worth between $300-1000 that are available to register at $12 each (on Crazy Domains). I am appraising them at 'genericdomainfinder' and this seems like a great way to get an idea of their worth.

Is this kind of automated appraisal accurate? I find it weird that I'm seeing so many domains available that are worth $1000+ . Why are they available? At a profit of maybe $988 it seems like a no-brainer.
For obvious reasons I can't say what they are as I haven't snapped them all up yet.
I also found some top keywords and got some domains with a dash in them, like for example......(example-site.com). When I did an appraisal without the dash, it was appraised at 6K. I want to actually put a website on this domain because I make simple websites as a hobby and I find it fun to put up websites. I've never developed a site with good keywords before.

Domaining seems great. I bought some dud sites at first, but I'm improving. I wonder is it too good to be true? I suppose I need to auction some of the sites to find out for real what they are worth.
Thanks for your help

 

[aramyus]

Short answer is no, they are not accurate.

You can check the previous threads on this forum and see domains advertised at 75% or more below appraised value.

There are several automated appraisal sites, and the results are not consistent either. To convince yourself, you can try noktadomains and estibot on one of your domains, or on won auctions such as flippa

I think however that automated estimates give an indication, among many others, of the value of a domain, but that's controversial and many expert completely disregard automated valuations.

 

[Linnie]

Thank you aramyus, I agree they must give some indication but can in no way be accurate. So I will change my question slightly. Would an experienced domainer buy .coms that were automatically estimated at 1K, or would they ignore that?
Would a domainer buy a .net or .org automatically estimated at 1K? thanks for help

 

[aramyus]

As I suggested earlier, many domainers would disregard an offer that mention an automated appraisal and regard badly the person as if he was saying an insanity.

I read regularly on the forum that automated appraisals are used only/primarily to lure unaware buyers. They use them primarily to inflate prices (which incidentally is a good tactic broadly used on ebay).

As far as I can see, there is no constant ratio between an automated appraised value and the actual transaction price. The discrepancy can be a factor of 1, 10, 100, 0.1, 0.01 or even much more different. I've run some test statistics on that, and I could not find anything relevant.

Despite my negative words, I think automated valuations have some interest, at least as a comparison tool. They also give a quick indication of whether go further or not.

Remember also that most domainers on this forum look for selling prices in the high $xxx or more. Their answers reflect a certain state of mind which is not really compatible with 'little guys' like me who would be quite happy to buy a domain at 12$ and sell it for 50.

 

[Linnie]

omg I just searched a commonly misspelled word, and the .net is available, its valued at 5.5K
Its a big keyword that is estimated at over a million, and it is commonly misspelled. Maybe I am having beginners luck. Genericdomainfinder said the .com was available valued at 55K...but when I went to buy it, it was gone in under a minute. Holy crap. Do they steal valuable domains before you can purchase? If so, I would advise never to use genericdomainfinder. That happened to me twice today, I think I am getting paranoid. 55K would be nice. Oh dear. I really hope that wasn't just stolen.

Wait, the .org is available valued also at 5.5K
the .info is 1.1K, also available.
I have to buy tomorrow because my debit card is empty

 

[Linnie]

I may be going mad here but the misspelled word has a bunch of .com available in combination with other words linked to it, i.e. obvious search terms but with the first word misspelled. This luck is so odd, unless they are worthless and I am making a beginner mistake. I am no longer using the thieving automatic appraisal tool, I will go on a buying spree and only appraise them after I buy them. I know for a fact that buying on gandi.com they do not steal valuable domains before you can pay, so we will see.

 

[Linnie]

surely genericdomainfinder is not stealing them...I think that site is not working very well and has had a few errors.

 

[S-B]

@Linnie

You are wasting your money. You've been told appraisals mean nothing yet you're running out to register terrible names that will never sell. Take your time and learn before you spend.

 

[Linnie]

Thanks for your advise Shane. I've already made some mistakes and regretted about 10 domains I purchased. I realise I'll probably regret quite a few more as I learn. But I do know I've also secured some real gems in the industry I work in. I want to develop a lot of them into mini sites. I may not auction many of them. Even if I get one gem out of every 20 duds...it's worth it to me.

It is so strange...I bought a certain .net the other day on godaddy (I don't trust godaddy after researching them), and the next time I checked a few days later, the .org and .info were gone. I didn't snap them up fast enough. So who knows? I admit it might be a waste of money, so I guess thanks for saying how false the appraisals are. You are probably right. Yet in the first week, the appraisals were telling me $1 or $6. I feel I am getting better at searching because now they are saying 5.5K. Oh well, I waste another $100 on domains....maybe the best way to learn not to do that.

 

[S-B]

Thanks for your advise Shane. I've already made some mistakes and regretted about 10 domains I purchased. I realise I'll probably regret quite a few more as I learn. But I do know I've also secured some real gems in the industry I work in. I want to develop a lot of them into mini sites. I may not auction many of them. Even if I get one gem out of every 20 duds...it's worth it to me.

It is so strange...I bought a certain .net the other day on godaddy (I don't trust godaddy after researching them), and the next time I checked a few days later, the .org and .info were gone. I didn't snap them up fast enough. So who knows? I admit it might be a waste of money, so I guess thanks for saying how false the appraisals are. You are probably right. Yet in the first week, the appraisals were telling me $1 or $6. I feel I am getting better at searching because now they are saying 5.5K. Oh well, I waste another $100 on domains....maybe the best way to learn not to do that.

The best way to learn is read. Do what you want though. It's your money!

 

[cocaseco]

@Linnie Do you really believe that you are so lucky/good that you alone found domains that have any value? The list you are looking at has been covered by dozens of big companies, hundreds of smaller companies and thousands of individuals. Is it possible they missed one? Sure, one gets by once in a while but it will be worth $XXXX not $XXXXX. Also, .net and .org that are available for hand reg are almost guaranteed useless. Even for development, few cases exist where a .net or .org should be developed. Lastly, the domain you saw that was "gone", was likely never available. Its simply a glitch that happens pretty regularly, more so at some registrars. It is your money, so good luck. BUt have you ever heard the saying "If it sounds to good to be true....."?

 

[Linnie]

Totally cocaseco, it does sound too good to be true...and that is what I wanted to know, I was worried I was getting carried away. you are all surely right. According to appraisals, I could be making 20K a week for a few hours online....I know that just can't be true. But I'm probably going to spend that extra $100 anyway like a sucker. But I really appreciate all of these answers because I want to learn. The industry is a very female industry, it is 90% female buyers, and a product they buy even when broke. Not hygiene related. That is why I believe so many .coms available. Well they could be duds. That would make the most sense.

Its past my bed time in Australia so I'll read any more new comments tomorrow.
I think .com are a brilliant investment, because stocks are crashing in China and this will spread, 14 countries in Europe cannot repay their debt, and most nations are selling their US dollars and much of Europe is repatriating their gold off the Fed. This all adds up to global financial crash, banks failing and stocks worthless. But this won't touch .coms. I think .coms will survive the next global crash. Okay goodnight.

 

[Rado_Ch]

I do believe you have the wrong approach, but one thing that I'll agree on is that trying and making errors is the best way to learn. Let me throw some pieces of advice from a client standpoint, as I am not a domainer myself.

Automatic appraisals mean nothing, the real value of the domain is the value the enduser is willing to pay for it. Finding the right buyer and convincing them of your perceived value of the domain is what will make the domain worthwhile.

Think about all the domainers out there. While its possible to find a gem, it will require long research and quick registration when you see one. Do you think that with so many domainers dedicating their whole day on finding such gems you will be able to find numerous valuable names just when you start? The tale of "if it looks too good to be true - it most probably is" goes a long way in domaining.

Hyphenated domains - not a good deal also. Especially if the non-hyphenated version of the domain is already taken. Even hyphenated .coms are not that lucrative, simply because their value can immensely drop in favor of the non-hyphenated counterpart. There is a simple test in domaining called a Radio Test. It basically represents how easy is to remember the domain when hearing it out loud. The more you have to further explain the name (well its examplesite.com but with a dash between example and site), the easier it would be for the domain to be forgotten in the long run. Same goes for domains with numbers in it.

All in all, the best advice anyone can give to a startup like yourself is to browse these forums, read as much as you can, monitor auctions and regs for a while and only then make your first registration. I do understand the impatience in some people, as everyone wants their business to take off quickly. Just have in mind that this impatience would take you through a lot of rookie errors so if you are ready to lose on some of your initial investment - by all means, try it.

 

[Kate]

Buying domains to develop them, or buying domains to sell them are two completely different things.
However, you can sell developed websites. Then the value stems from the development, content, SEO, not the domain.

Just don't expect that you will be able to resell the 'gems' that you've found.
Automated appraisals are as accurate as the daily horoscope. Yet some people want to believe. In real life it doesn't work like this.

 

[Linnie]

Rado_Ch and sdsinc - thanks so much. Yes I am totally impatient, I can see that especially in the first week when I was buying. That is why I now wait a few days and think before buying. After reflection, I think I am not a true domainer because I already have a good website that is three years old and I use it to drive traffic to my Amazon page, where I am selling about 2-3 books a week. I plan to set up a whole bunch of mini sites on topic of the book (I want to have 20 websites at 5 pages each with ads for my book) and use them to drive more traffic to my Amazon page...so I have a bunch of different reasons to buy/develop sites. Also will compare various .coms and the ones that don't work at all, I can let them go. Yesterday I began to research cash parking, another possibility if the sites are good, I can find out that way too if they are worth anything.

All I can say is this certain keyword I found seems to have very few parked domains....all the .coms taken with this keyword have websites, so it makes me believe domainers haven't discovered the word properly. There are endless .nets with this keyword but I am ignoring those completely and only getting .coms. It seems way too good to be true so it must be. Since I don't have experience, this is gambling while I learn and I don't mind a few gambles. Automated appraisals are not 'appraisals' at all, I see that now, they seem to be more a guide about how much those terms are searched, which may not translate into cash at auction.

I agree its all about what the end user wants to pay.
Hyphenated domains...I think only worth it for really strong names, like new-cars.com or something like that equivalent, so I agree there too
The misspelled keyword I shall test for traffic before buying many of those.
I think I will start my developing phase now and try not to buy domains, its a bit addictive I have to admit.

 

[Flipsbay]

Not at all. Even with estibot the appraisal is worthless.

The best appraisal tool is domainers themselves and auctions. Or you can check similar domain sales to get an idea of what your domain is worth.

You may list it on sites like flippa.com with reserve and get a very good idea as people who bids there are actually looking forward to buy your domain not just through an appraisal at you that even they will not pay for.

I would suggest list your domains for free to check this kind of appraisal unless your domain is really a good one so 9$ listing is nothing compared to that domain sale.

thanks.

 

[Domain Lead Finder]

I think .com are a brilliant investment, because stocks are crashing in China and this will spread, 14 countries in Europe cannot repay their debt, and most nations are selling their US dollars and much of Europe is repatriating their gold off the Fed. This all adds up to global financial crash, banks failing and stocks worthless. But this won't touch .coms. I think .coms will survive the next global crash. Okay goodnight.

Do not invest more than 100$ total, the good .com-s that were worth anything at all were regged like 20+ years ago. Automatic evaluation sites are there just to give a false perceived value, the falser they estimate, the more popular they are with some domainers. If the market crashes, your chances of selling any domain crash with it, being that domains are sold for cash and the abundance of cash and end users willing to pay for your domain is directly proportional with the health of the global economy.

Just trying to help, you should avoid the automatic evaluation all together. As said above no pro domainer would seriously consider any of these services while evaluating domains.

 

[Cristi Marin]

Not a chance from what I could gather so far.

You have more chances to get some good
and realistic appraisals from the NP crowd.

 

[bhartzer]

I don't think they're necessarily accurate, especially since it's automated. You have to expect some sort of "issues" with anything that's making a decision in an automated fashion.

I'd like to see an automated tool that considers actual "comps" like they do in real estate valuations.

 

[elopeuniversal1]

From what I've been told there pretty much useless, especially for brandable domains.

 

[Rado_Ch]

Rado_Ch and sdsinc - thanks so much. Yes I am totally impatient, I can see that especially in the first week when I was buying. That is why I now wait a few days and think before buying. After reflection, I think I am not a true domainer because I already have a good website that is three years old and I use it to drive traffic to my Amazon page, where I am selling about 2-3 books a week. I plan to set up a whole bunch of mini sites on topic of the book (I want to have 20 websites at 5 pages each with ads for my book) and use them to drive more traffic to my Amazon page...so I have a bunch of different reasons to buy/develop sites.

I would be very careful with your plan if I were you. What you are thinking sounds very similar to a Private Blog Network (PBN) where you have a number of sites that basically link to one main site, with the purpose of gaining more backlinks. While that was ok in the past, search engines are now frowning upon such strategies as they can unnaturally influence the ranks. A couple of Google Penguin updates heavily hit such sites and subsequently Google started giving less value to backlinks and more value to content overall. Using a PBN today might be possible if all your websites are on different hosts, different IP addresses and not directly pointing to one and the same page but even then, sooner or later the search algorithms might catch up to that and you will be penalized.

Better be safe than sorry, my friend

 

[Omar Negron]

Do not use automated domain appraisals (or at least, don't take the information they give you to heart). They usually just run your domain and look at certain metrics like CPC, search volume etc. But the thing is, a domain is only worth what someone is willing to pay for it.

I had a domain that came up $0 valuation. I was able to sell it for $xxx

That's why I don't pay any attention to those tools anymore.

-Omar

 

[thekiller]

I have a domain name which I registered few days ago. Estibot appraisal says $xx,xxx. So How much I would get?

Not they (automatic appraisals) are not accurate.

 

[Kate]

Without knowing the exact domain: $0.