The strategy depends on whether a sale is needed or not. A willingness to walk away is the most powerful negotiation tool and is the most reliable way to maximise the price. You can theoretically balance needing a sale and maximising the price but it is very difficult. For the remainder of this post, I am going to assume you do not need a sale and your goal is to get a deal done at the best price from the buyer.
First and foremost: a broker ostensibly works for the party that instructed them (in this case, buyer) but the broker has an incentive to get a sale done at a high price because they are receiving a percentage as commission from the buyer. You can either treat the broker more as a partner than an adversary or even as an independent third-party. The key is not to treat the broker and the buyer as if they are one and the same.
The price of a domain is entirely determined by the buyer. Appraisals can be useful as a negotiation tool but they are not relevant when determining the price for a buyer. The price for a buyer is determined by how much value they get from the domain. google.com would be appraised at hundreds of millions of dollars but if I only have a $100k budget, I can't pay hundreds of millions of dollars. Conversely, 123lawyers456.com would be appraised at $0 but if I have just raised $100 million dollars for a marketing campaign and for whatever reason believe the name "123lawyers456" is fundamental to my business then the domain could be worth millions to me.
So, you need to decide on your asking price based on the buyer.
Research the buyer, identify what you think their budget might be. How entrenched is their name? How much money have they raised? Are they profitable? Does a domain tie in to their business (e.g: are they a consumer brand? Are they a high-trust business? Are they losing traffic to your domain?). What would it cost them to rebrand? Why are they trying to acquire the domain now, instead of last week, or next week (did they just raise money? Are they about to raise money?).
At this point, you should have a reasonable idea as to the order of magnitude of their budget, whether theyโre willing to spend $10k, $100k, $1m. Price is as much art as it is science, there is no formula. Price too high and you might cause them to walk away immediately, price too low and you leave money on the table. I like to price towards the top end of their budget with 1/3rd as my wiggle room for discounts. If I think they can spend $100k on the domain, I'd ask for $85k with an expectation of selling for $60k. I want my buyers to feel like they got a great deal.
The next step is to go back to the broker with the price. You can be honest, you do not need to play games, you can be straightforward. The broker wants to get a sale done! โI know that the buyer is x. I think the domain's value to them is $100k, my price is $85k".
(You can ask the broker what the buyerโs budget is and in some cases a broker might tell you honestly, but this is where the tension between a broker representing the client and a broker wanting a deal comes into play. A good broker understands how to balance getting a deal done and getting the best price for their client. Personally, I would not ask for the buyer's budget.)
A buyer will often push back on a price even if it is within budget because people want to โwinโ a negotiation and feel like they got a great deal (or at least be able to portray that to stakeholders). A broker may do the same. Depending on the relationship between broker and buyer, the broker may need to perform a negotiation dance even if they know that the buyer will ultimately take the asking price. You can hold firm at your asking price or discount.
You may also negotiate on non-price options. For example, โI can offer a 25% discount if the deal is done before the end of the monthโ โI can offer lease-to-own if the buyer doesnโt want to tie up their capitalโ or even โIโm willing to take half as cash and half as equityโ. Negotiating on non-price options is primarily a tool for taking control of the negotiation and getting a deal done, rather than extracting more value. I value equity in a private business at zero but if I think a buyer will be flattered by an offer to take equity, it can be a very useful way to get a deal from "maybe" to "certainly".
After providing a price, you may need to wait weeks, months or years for a decision to be made. You can follow up, offer discounts to close quickly, but in general, a deal will take as long as it takes, the broker will be actively trying to get a deal done to collect their commission, you don't need to do anything. If you have a deadline at your end (e.g: you need the money...) be upfront about it as part of the offer, i.e: "the price is $x and it is valid until {date}".
And finally, once a deal is agreed, and payment is made, make peace with it. Enjoy it. You probably left money on the table, we all do, but that's life. And don't immediately reinvest all of it in domain names. Most domain names are worthless and half of the market is propped up by people making one great sale and reinvesting it all in junk. Selling a domain you bought and investing in domain names are completely different. If you get a taste for domain name investing, invest a small amount.
Additional thoughts:
Do not over explain. Do not try to justify. You should be honest (โI am not a professional domain investorโ โI have sought advice from expertsโ) but do not over explain. The broker will advocate to the buyer for the deal using the knowledge of and relationship with the buyer. A broker has some leeway in what they share with the buyer and may play you against each other but you should assume that anything you say to the broker will make it to the buyer. If you over explain, you risk sharing information that the broker is forced to act on against your best interests.
Deals can be lost based on emotion, if you offend a buyer and they are petty, they might refuse to ever buy the domain on principle. Always negotiate firmly and politely. Being rude and unresponsive is not a good negotiating strategy, neither is being wishy-washy. Never try to change the terms in your favour after agreeing. Do not take things personally.
If you are not confident in negotiating, and you think the buyer has a large budget, you can instruct a seller side broker, someone to negotiate on your behalf. Negotiating directly is best (less parties = less competing priorities = more agency) but if you are a weak negotiator it can be beneficial.
The buyer could be the CEO who is sole-shareholder with deep pockets, or it could be a company with a board that is hypersensitive to spending money. An agreement and payment might need to go through approval or internal negotiation. A sense for the stakeholders can be helpful, e.g: exploding deals (25% discount if you agree before the end of the week) are less useful if there is a board involved.
If you do lose the negotiation (and the buyer walks away) you can always come crawling back: you will be in a weakened position, but it is not necessarily all over. Domains are one of a kind.
A broker is charging a percentage of the final deal to the buyer as commission: the exact price is much less important to the broker as the scale of the price. A $9k price agreed immediately is better for a broker than a $10k price negotiated over weeks, whereas a $100k price agreed after weeks of negotiation is better than a $10k price agreed immediately. If the buyer has offered $75k and you're asking for $100k, the broker is going to spend a lot of time on the phone to the buyer trying to get the deal done. If the buyer has offered $1000 and you've asked for $2000, a broker isn't going to waste any time trying to convince the buyer to come up to $1500 and you to go down to $1500.
A buyer may sometimes try to leverage trademarks to bully you. Unless you acquired this domain to target the company in question and the buyer can prove it, trademarks and the UDRP are irrelevant. The buyer has engaged a GoDaddy broker so it is unlikely that they would do this, but there is a small chance, especially if they feel offended by the price you come back with. A curt "I am not arguing about trademarks. My ownership of this domain is in good faith. Do not waste my time with legal threats." is how I would respond.
