Does Someone Want to Buy Your Domain Name?

Has someone approached you about buying a domain name that you own? This happened to several colleagues this past week, so I thought I would pass along some of the advice that I gave them.

If you are on the receiving end of a serious offer to buy your domain name, I strongly recommend that you get a professional appraisal of the fair market value of the domain name so as to avoid selling it for significantly less than what it's worth. The fees for a professional domain name appraisal are usually in the $20-50 range.

Here are some recommended domain name appraisal services:

Afternic.com Domain Name Appraisal

Sedo Domain Name Appraisal

There are a number of other appraisal services out there, including a bunch of automated services that offer free domain name appraisals, however in my experience the most reliable appraisals are done by a real live human evaluator working for a company that has a lot of experience selling domain names. That's not the case with the automated appraisal solutions, which is why the appraisals by the automated tools are often notoriously inaccurate.

Speaking of appraisals, beware of a scam that has been making the rounds whereby a supposedly interested 'buyer' with lots of money to spend insists that you use an appraisal service they recommend in order to close the deal. The 'buyer' is not really interested in your name; he is hoping to trick you into purchasing an appraisal from a bogus appraisal service (which he secretly owns). Once you have paid for your appraisal, the 'buyer' mysteriously loses interest in your domain name. Ouch!

Of course, when it comes to domain names, "fair market value" is rather subjective and will fluctuate over time. On the one hand, it's not uncommon for people to sell domain names for a few hundred dollars and think they got a lot of money when in fact the domain was worth thousands or even tens of thousands. On the other hand, most domain names aren't even worth $10, yet delusional owners hang on to these "valuable" domains for years hoping to cash in by selling them one day. Sorry to burst your balloon, but that's just not going to happen.

An appraisal by a reputable company will provide you with a reality check, but don't base your decision to sell the domain name solely on the appraisal. Also consider how likely it is that another buyer might come along in the future wanting to buy your domain name. (Have you gotten offers on this domain name in the past? If so, you will likely get offers in the future as well. A really good name appeals to lots of potential buyers.) Sometimes, however, there is only one 'ideal' buyer for a domain name, and if you think they've finally found you and your domain name, then now's the time to sell.

If you decide to sell and agree on a price for the domain name, I recommend that you use an escrow service for the financial transaction. Escrow services act as intermediaries between a buyer and seller, and they help to ensure that the seller (you) gets paid and the buyer get the domain. Escrow services charge a small fee (usually a percentage of the sale price) for the valuable role that they play.

If you are selling a domain name to a buyer that you do not know personally (which is the typical scenario) and the transaction is for more than $200, I suggest using an escrow service to give you piece of mind.

Here are some recommended domain name escrow services:

Escrow.com Domain Name Escrow Service

Agreed.com Domain Name Escrow Service

Another approach is for the buyer and seller to sign a Domain Name Purchase Agreement, however this usually involves lawyers and the costs for this can quickly add up.

Good luck with your domain name sale!

Comments

[Stephen Douglas]

Hi Bill,

I read your article on domain selling, and appraisals, and have some points to add:

1) Paypal accounts are essential for transactions in domain name sales. Paypal protects both the buyer and seller, and is basically acceptable up to the value of the limit Paypal gives you for your total account. In other words, you don't need an "escrow" service for domain sales less than what your Paypal account limit will hold. I've made hundreds of sales, from $10 - $5,000, and "guaranteed" my payments or my buyer's payments through the Paypal system. If something goes wrong, Paypal (owned by powerhouse eBay) will halt the payment, and try to resolve the issue before allowing the transaction to proceed. So essentially, Paypal is an acceptable escrow service for domain sales $5,000 and under.

2) Domain appraisals mean nothing really, other than getting a good idea on the minimum value of your domain. Usually, if your domain isn't less than 15 characters, clearly pronounceable, and generically descriptive, you're going to have to bet on some other "quality" the domain has, and that would be short, funny, unusual, memorable domains. Any domain with less than five letter characters is also a good bet. This is a new area of rabid buying. Watch out for alphanumerical domain mixes -- not usually considered valuable.

3) If you have a lot of domains, consider bulk appraisal or evaluation services. My company provides this for domain holders wanting appraisals on at least 500 domains or more, for only $5 per domain. I recommend an evaluation first, where we eliminate domains quickly for only $.50 per domain. We will remove the domains that we think don't have a profit life, and then if you choose, you can have the remaining domains appraised.

The one thing to remember about domain names is that even if the domain doesn't get typein traffic, and has no existing links, if it has a generic descriptive quality to it, you can have the domain built out very cheaply at a "content building" parking service, such as "http://www.Whypark.com". Nothing makes a domain owner happier than to see their domain resolve to a landing page that features 5+ relevant original articles regarding the domain's topic, and that their domain reaches a search engine indexed status within a month or two. That means that their domain, previously making nothing at a traditional parking service, can be built out to be found by users coming in from search engines, based on content provided by Whypark.com. The ability to provide your own ad feeds and CPA's on your domain's webpages at Whypark is also greatly beneficial to generating revenue. The fact that Whypark's standard package only charges a one-time $99 fee for 100 domains is remarkable.

It's always great to see an expert like yourself writing articles on the domain name business. We need more of these type of articles! Keep writing!

This is a good story on domain name sales. I hope my input helped add some good info for your readers!

[B.K.Saravanan]

Appraisals are just approximate estimates. The real price of domain name depends on the interest and need of the buyer. Did you know 770.com sold for 175,000 Euro.

Generally NNN dot com sale price is mid of $ xxxx US. Best method is to place that domain at a broker site with a minimum offer for the price asked by the buyer (or)you can keep it as reserve price and divert that buyer to broker site.

Domain brokerage site receives much more buyers and viewers, bidding on your domain gives a high price. you can also use escrow as payment gateway.

Do you know escrow fees is 3.25% (ordinary ) and 6.5 % with phone support. So you can ask the buyer to pay escrow. This is the normal practice followed. Try to sell your digital assets for Real Values

Regards,

BK

[domain appraisal]

Domain appraisals mean nothing really, other than getting a good idea on the minimum value of your domain. Usually, if your domain isn't less than 15 characters, clearly pronounceable, and generically descriptive, you're going to have to bet on some other "quality" the domain has, and that would be short, funny, unusual, memorable domains. Any domain with less than five letter characters is also a good bet. This is a new area of rabid buying. Watch out for alphanumerical domain mixes -- not usually considered valuable.