How To Get An Accurate Domain Appraisal

The growing popularity of domain investing has spawned several free online resources for appraising domains. These free appraisal services have their advantages and disadvantages in generating an accurate appraisal because they all weight the contributing factors differently. For example, one appraisal service may give a higher value to a domain name with backlinks than a domain name with high search engine results. These differences can cause major fluctuations in a domain’s appraisal from one service to the next.

We randomly picked 100 domains, ranging in price from a coupl hundred dollars to tens of thousands, off of the list of recent sales. If the domain recently sold for that price, then its a pretty fair assumption that price is its current value. We took these 100 domains and appraised them with three different services, estibot.com, leapfish.com and nameboy.com. We were surprised to see how greatly these domain appraisals differed, some as much as $60,000. We also knew that with all this data we could come up with a way to make these appraisals more accurate for all of us.

After analyzing these numbers, we calculated how much, on average, each appraisal differed from the actual sale price. Leapfish averaged out to a 50% markup on their appraisals, Estibot was a 30% markup and Nameboy was a 10% markup. Here comes the tricky part, which ever appraisal is the lowest of the three for any given domain was undervalued by 1/3. Now that we know all this, we can adjust the values and get a new appraisal amount.

How do we adjust the values?
Let’s take edealz.com (sold for $4,000) as an example.

First we take the three appraisals:
Leapfish appraisal – $10,804
Estibot appraisal – $330       
Nameboy appraisal – $4,992

After we have the 3 appraisals, we look for the one with the least value, which is Estibot’s appraisal of $330. Since our data told us that the smallest appraisal is generally undervalued by 1/3, we are going to multiply this amount by 3. So our Adjusted Estibot Value is: $990.

Next we take the Leapfish value of $10,804. Our data tells us that the appraisal value from this service has an average difference of 50%. If we subtract 50% from $10,804 we get our Adjusted Leapfish Value of $5,402.

Lastly we use the Nameboy value of $4,992. Our data tells us that the appraisal value from this service has an average difference of 10%. If we subtract 10% from $4,992 we get our Adjusted Nameboy Value of $4,492.

We now have our 3 adjusted appraisal values:

Leapfish adjusted appraisal – $5,402.
Estibot adjusted appraisal – $990     
Nameboy adjusted appraisal – $4,492

Take and average of the 3 and you get a value of $3,628, not far off from the sale price of $4,000.
You will find that this method will produce a number very close to a domain’s sale price most of the time. Try it.

To summarize this method:

1) Get 3 free appraisals from Leapfish, Estibot and Nameboy.
2) Find the appraisal that is the lowest and multiply by 3
3) For the remaining 2 appraisals use the following: Leapfish subtract 50%, Nameboy subtract 10% and Estibot subtract 30%.
4) Get an average from the 3 adjusted appraisals.
5) That’s it.

Enjoy,
Pound

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