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Many Appraisal Sites Get Their Evaluation Quite Wrong !!!

Labeled as discuss in Domain Buying and Selling Discussion started by blue crystal, Apr 21, 2019.

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  1. blue crystal

    blue crystal Established Member

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    Why most of the appraisal sites fail badly on estimating the value of domain names or when “they get it right” is by cheating ? For instance, on many occasions, godaddy estimates a domain value as being ABOVE $ 25,000. But then $ 1,000,000,000 and zillions of other figures or even $ infinite is “ABOVE $ 25,000”. So this type of appraisal is useless. I took a list of about 500 top domain names sold with the highest prices and tested in the Godaddy appraisal service. It got enormously wrong most of them and it “cheated” on the remaining by saying that their value was “above $ 25,000”.

    Just to mention an example: the domain name “myworld.com” was appraised by godaddy with the value of $ 24,831 when in reality, it was sold for $1,200,000.
    So, Godaddy appraised it as being almost 1 / 50 of the real value !!!
    In the range of low price domain names, godaddy seems to err, on many occasions, upwards. Let's say a domain name is sold for $ 200 while it was estimated as “$ 800”.
    Some other appraisal sites are even worse.
    What is your opinion ?
     
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  2. Hincapiex

    Hincapiex Upgraded Member Gold Account ★★★★★★★★★★

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    I have tried several different ones - godaddy, freeseotools and many more....and gotten fluctuations on some domains that were so great it basically makes it worthless (from 80usd to 2500usd for instance)
     
  3. blue crystal

    blue crystal Established Member

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    For instance, I made a google search on the word "fruitssaladshop" and I got 205,000,000 search results, yet godaddy appraisal to this domain name (.com extension ) is only $ 559 !!!
    I think that based on the search results it should worth at least $ 5,000.
     
    Last edited: Apr 21, 2019
  4. alcy

    alcy Top Member VIP

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    the more proper title would be:

    "all apparaisal sites are worth zero and get everything wrong all the time"

    p.s. randomly getting it "right" now and then does not count.
     
    Last edited: Apr 21, 2019
  5. blue crystal

    blue crystal Established Member

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    Does someone know a more objective method to appraise a domain name ?

    I think that investigating the number of google search results might be one of the criteria.
     
    Last edited: Apr 21, 2019
  6. Asfas1000

    Asfas1000 Top Member VIP

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    Same domain has previously sold for $1,000 and for $10,000.....

    .......so what is a valuation site supposed to appraise this domain for ?
     
  7. blue crystal

    blue crystal Established Member

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    I suspect that the "appraisal" algorithm of some sites have some intentionally biased purposes. Kind of encouraging people to buy rubbish domain names by overestimating them so that they increase the sales and, on the other hand, undervaluating valuable domain names so that "hidden partners" can buy them cheaply.
     
  8. Kate

    Kate Domainosaurus Rex VIP ★★★★★★★★★★

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    It makes sense for a registrar to use that kind of trick, after all they want you to buy more domains from them.

    But I don't understand the fascination with appraisals.
    If you need appraisals to know what to buy, then you don't know what you are doing.
    And a nice appraisal does not mean there is a buyer for your domain.
    So what exactly do you expect.
     
  9. Mister Funsky

    Mister Funsky Top Member VIP

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    Automated appraisals are an interesting and sometimes entertaining distraction for the most part.

    Those that offer you statistics on visitors, ads, clicks, etc. can be helpful because they give some logical starting point to value your domain. I use some of this information to help determine the price based on 'pay per click' values (I use 4 methods/equations) and take the average.

    Then I add some common sense, use the radio test and sometimes flip a coin. The key, no matter what, is to have a group of potential buyers in mind before acquiring a name.
     
  10. blue crystal

    blue crystal Established Member

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    No fascination at all, Kate. I am a complete novice in this area ( I just started a few days ago ) and in the beginning, I thought that algorithmic appraisals were a reliable thing but I quickly realized they are not. And you guys helped me to confirm my suspicion. I thank you all for that. And yes, I am only beginning to learn the tricky things of this profession.
     
  11. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    Automated appraisals don't mean much.

    That is a good example of where GoDaddy is wrong.
    They are assigning a $559 value to a domain worth $0.

    Brad
     
  12. blue crystal

    blue crystal Established Member

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    Thank you again, guys. I think I am going to close this thread so I can start another one.
     
  13. xynames

    xynames XYNames.com PRO VIP

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    You’d be lucky to get $559 for
    Fruitssaladshop.
    The double ss is not reassuring. “Fruits salad” is grammatical incorrect verging on pidgin English. (Fruit salad is the proper term.). And then - what is a fruits salad shop? Have you ever seen one?

    The search results you’re getting are based on the first two words “fruit salad” together. Not based on “fruit salad shop” and definitely not based on “fruits salad shop.”
     
    Last edited: Apr 22, 2019
  14. HappyW

    HappyW Owner of NamesMaker.com Gold Account

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    If the assessment of GD is not accurate, then there may be no tools to measure domain value. The word "Washington" did not receive much respect before being used by Washington. Therefore, the value of the domain lies in the future, not in the past. Please don't say that you are an investor before you understand it.
     
  15. xynames

    xynames XYNames.com PRO VIP

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    I find the GoDaddy appraisal tool to be a good start for pricing two word exact-match low to mid four figure value domains. It tends to come in with a good starting point and sometimes isn’t even that far off.

    It also, for these types of domains, often gives you some great closed comparable sales.

    When GD’s valuation is off it is often because it couldn’t find proper comparables. Look at the comparables GD spits out - if they make sense and look comparable to you, then you may put more trust in the appraisal. If they appear unrelatedly wacky, then the appraisal is probably off too.

    Even after GD gives you what appears to be a trustworthy valuation still there is some old hand manual valuation research you must do before you decide on a domain’s price.
     
    Last edited: Apr 22, 2019
  16. topdom

    topdom Established Member

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    Godaddy apprasials are for domains which are worth in 1K-10K range. They are a marketplace, so they have to do this.

    Estibot is more realistic, but Estibot underestimates .biz prices most of the time. You can check top 50 keywords in .biz, and many will be appraised in 600-700 range. My top sale is a .biz and they show about 2 percent of actual sale price as their valuation for it.

    Also I sold a domain with zero Estibot for 3K this year.
     
  17. jamesall

    jamesall Upgraded Member Gold Account

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    "Automated appraisals don't mean much" = "AI doesn't mean much"

    Idiotic statements.

    I would say that some automated appraisal services don't use AI as effectively as others do.
    Maybe GD had a programmer in for a day and that was their budget for AI finished but there are other services.

    I have had contact with NameWorth.com who are building their business upon appraisals and they are updating their appraisal software all the time. Their appraisals are based upon historic sales and other factors. Try it yourself with a useless name and a great name. Only supports com at the moment. They aim for a 50% estimation of the market potential price.

    They nailed it for myworld com.

    Hope that helps.

    myworld.JPG
     
    Last edited: Apr 22, 2019
  18. Mainlander

    Mainlander Established Member

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    GD would be MUCH better of a guide if they had dates added to the comparable names. Many of the sales they show happened years ago...
     
  19. xynames

    xynames XYNames.com PRO VIP

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    Perhaps better guide if you’re (1) quoting the GD derived comparables to your buyers (which is fine, nothing wrong with that) , and (2) your buyers are further researching the comparables and coming back with a “hey that comparable is too old” (never happened to me with any buyer),

    but in any case - the dates of the comparables would not change the GD valuation spit out unless it weighs algorithmically the older comps less (which, maybe it already does?).
     
  20. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    They have a long way to go as I have seen endless appraisals from them that were silly on the high side.

    For instance, ones like -

    - In The Day .com for $300K.
    - Regularizing .com for $94,500
    - To Host .com for $64,500

    Brad
     
  21. jamesall

    jamesall Upgraded Member Gold Account

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    Let's hope they get the service working at a reasonable level then. They have a chance because they are focusing only on that.
     
  22. slader23

    slader23 Always On The Bleeding Edge. VIP

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    You don't need automated appraisals. Simply base your valuation on comparable sales.
     
  23. IPBFlippers

    IPBFlippers Established Member

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    I agree with you.

    I believe that they will improve with time.

    I got a fairly good valuation for my top three domains. So, I wouldn't complain too much about them.
     
  24. doofer

    doofer Established Member

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    I recently found a domain on GD which it appraised at over $5500, available for less than $200 ! The very same domain appraised on freevaluator.....less than $50 !
     
  25. poweredbyme

    poweredbyme Member VIP

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    ( Search volume x CPC ) x some multipliers of your own.

    Problem with this formula is that I don't know a website that shares Search Volume and CPC figures publicly. Most sites require membership just to give those worthless data. I hate to sign up websites to get an information, hate more to pay for this. More importantly those data are very reliable.
    Reliability issue of search volume and CPC figures is related to the fact that there are multiple search engines, cpc rates, geographical differences, seasonal fluctuations, competition, etc.
     

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