GoDaddy’s automated appraisal tool is a double edged sword, and my affection for it varies depending on whether I am buying or selling a domain name. Put simply, when it comes to unique assets, I don’t think an automated tool can accurately value a domain name. People do use the appraisal tool though, so it is something investors need to keep in mind.
This morning, I received a $1,500 offer to buy a two word .com domain name I acquired via auction earlier this year. In passing on the offer, I told the prospective buyer my domain name is worth more than $1,500. He replied asking me the value of the domain name and told me he based his offer on the GoDaddy appraisal:
“In relation to the value, what value would be acceptable? I went by GoDaddy’s valuation services that said it’s worth $1450, hence my offer of $1500.”
Ugh.
My reply explained that the tool is automated and it is not possibly to accurately value unique domain name assets. I gave an example of making a $40,000 offer to buy a domain name owned by GoDaddy that its appraisal tool says is worth $21,000. I know the domain name is worth much more than the appraisal tool, and I tried to illustrate that even GoDaddy doesn’t trust its tool for valuation when it comes to unique assets like domain names.
In addition, I shared about 10 publicly reported domain name sales that I believe are similar to the domain name I own. I did this to try and show what similar domain names are actually selling for compared to the appraisal tool.
Because of GoDaddy’s reach and brand trust, many people assume the GoDaddy appraisal is an accurate assessment about the value of a domain name. In many cases, it is frustrating when someone quotes this automated tool for domain name valuations.
In most of these cases its best not to engage.
Sure, it’s an automated tool–that’s the issue in general. As far as automated tools go, though, I do think it’s one of the better ones. But that may not be saying much.
It’s my understanding is that they do take into account prior sales (which they point out in the results). But those results and “comps” are based on their own data, not necessarily data from other publicly reported sales.
Even their own data sometimes contradicts itself. For example Iv seen occasions where GoDaddy appraises a name for like $1100 but then in the “prior sales” it says that exact name with the “same extension” sold for $2500. That doesn’t really make much sense. lol
It’s good move explaining with similar names sold.
What was the end result?
I think you are still waiting for response after your explanation..!
Thanks,
Ravi
Discussion has not ended yet.
The Godaddy automation tool is the Holy Grail to some, and you are just a domain hoarder in their eyes. It’s very hard to make them think otherwise, especially if you are in the 5 figure range, and they are at $1,500, you might be able to move them to $5K if they really need it, or are well funded, but basically they killed your deal before it even materialized.
Many domainers brought this issue up over a year ago, I guess it fell on deaf ears then also.
Ha Ha welcome to 2018/2019 Godaddy is changing the game by instilling Huge Domains bot to bid up prices, then F you over with low ball valuations they feed to their buyers. I had an offer to the exact value of their valuation price. I was able to negotiate x2, but they made it hard, by brainwashing these people with these nonsense numbers. It’s great for their auctions as people keep thinking they are buying $1500 names for $200, and with an assist with HD bidding bot, $$$ all day long.
In my experience GoDaddy overvalue cheap domain names, and undervalue the more expensive ones. I have a few domains that GoDaddy said were worth $1200 – $1400 but an appraiser said were only worth $400 – $600. Then a couple of my others GoDaddy valued at $1200, but the appraiser said were worth at least $3000! So really, that tool is highly questionable.
99% of people do not know the true value of a domain name, including the majority of people that work at GoDaddy. Scary
A recent example : Renali.com
Estibot. 4300
Godaddy. 2094
Domain index. 1500
URLappraiasal. 60
FreeValuator. 2286
Original price. .99- 8.00 (always left out)
Related sales:
Arenal.com. 40,000. ( 2009 )
Radian.com. 125,000. (2017)
Presto.com. 150,000 (2018)
Packet.com. 350,000 (2018)
Signet.com. 300,000 (2018)
left out ? and hundreds of other 6 letter words or cvcvcv pattern as comps?
6Letter words alone would change the values
10-20 times the “most accurate” estimates above
All evaluators should be required to state upfront: values estimated are a mix of registrar, investor, flipper and end user sales, don’t include private unreported sales and cannot estimate use value, trend value, emerging market values
+ disclaimer – domains can and do loose value.
IMHO – estimators = another point of confusion for buyers much like the wide range of domains defined as “premium”
Godaddy does a lot and contributes a lot of value to this industry however,
Valuations – incomplete, misleading in so many ways much like the others out there.
I would say those appraisal bots should not even exist. You can easily find history sales whose prices are significantly different from their bot appraised values.
What’s more ludicrous is that there are self-claimed “domainers” who tries to buy domains from other domainers saying something like “looking for domains with [bot name] appraised above $xxxx”. I think those folks have no clue what they are doing.
Where is commenting by the likes of Rick Schwartz and Mike Berkens when you need it?
“Regulation” is a dirty word with some, but there really should be government regulation not allowing this misleading brainwashing of the public and poisoning of the market to the detriment of SO MANY others including end users with domain assets.
Fat chance, I’m sure. (Who even says “fat chance” anymore? Haven’t even heard or said it myself in possibly decades.)
But as Elliot so accurately points out, it also shoots themselves in the foot, those who disseminate this type of “service” and “information,” at least those with an interest in selling domains, which I’m not aware applies to Estibot. For the former, however, I guess they have simply determined that it’s more desirable to generate easy inventory “churn” at undervalued prices. Except when someone wants to buy a great domain they have which their own service undervalues.
And speaking of His Majesty, this one is also kind of fun and available for reg fee:
RenegadeRick.com
https://domaininvesting.com/rick-seeks-opinions-on-domain-name/#comment-84754
I was offered 80000 for my domain and godaddy valuates it at under 10000. The godaddy sales examples are not ever market related and have search value 1/10th to my domain name.
I think a good response to people who bring up GoDaddy’s automated appraisal is to point out that 1) GoDaddy sells aftermarket domains at NameFind.com and 2) every day thousands of domains drop at GoDaddy, wtih no one buying them for even $5, which their appraisal tool values at $500-$1500. If GoDaddy really believed in their own tool they would buy them for $5 and put them up for sale at NameFind.
I got this from an article by Mike Mann. In the article Mike was saying you shouldn’t trust the free GoDaddy appraiser. Here is a look at 3 of Mike Mann’s domain sales from 2018.
(LaCaricatura.com, OneSourceMechanical.com, WorldYouthForum.com)
Heres what DGoDaddy Appraisal said they were worth.
LaCaricatura.com $1,165
OneSourceMechanical.com $1,330
WorldYouthForum.com $1,787
Heres what they actually sold for.
LaCaricatura.com $19,888
OneSourceMechanical.com $17,500
WorldYouthForum.com $18,000
The GoDaddy free appraisal tool is pretty much worthless.
Tell them to buy the name from godaddy
Spend some time checking random 3 letter dot com values. The tool doesn’t give specific values over $25,000 and gives lots of comps displayed in the $3,000 to $5,000 USD range. Some even below $3,000. Need I say more.
Godaddy, tear down this wall!
I priced about 50% of my domains close to the Godaddy appraisal tool…..)my domains I would consider not premium) and I have had my largest year in sales in 8 years. The average sale price was about $3200. I used the tool only on domains I had no connection to and ones that I felt the tool was a nice price I would accept. Some names were hand reg names and some were purchased in auctions.
I also have about 5 or 6 domains I would consider to be $20k plus names and the tool puts them at $6k so there are some major flaws.
Anyone know what kind of % domain sales at Godaddy Auctions go for more than GD valuation?
I’m new to domain investing as a business. I’ve sat on domains and collected over the years because I remember missing out on great ones when I was a kid. When it was just yahoo and ask Jeeves I put the names I thought of in url and they didn’t exist yet, later to find out they sold for $$$. Truth is I don’t know if I’m just sitting on a nice portfolio I can capitalize on or have a lunch box of old worthless domains.
My rep at godaddy who finally reached out to me to offer advice is suggesting godaddy has a new program w afternic to sell on their platform instead of godaddy alone to reach more buyers. Sent me a portfolio evaluation spread sheet where there is godaddy value and range of a few prices including lower price suggesting to sell quicker (20% lower). So total value according to godaddy is 432k but I know I have some great ones that certain companies would pay more for.
I’m in commercial real estate based out of Los Angeles, so theoretical I’ve viewed the renewal fees kind of like property owners who pay annual taxes on empty land to keep them. My gut is telling me this guy saw my domain names and is trying to sell some off to his active clients or make a fee since I literally only sold 2 over the last decade and have let some lapse I changed my mind on.
Example. I own a couple hundred in real estate space for lead funneling strategy I’m working on.
Like Starbucksinvestor.com, CREforecast.com, expensesurvey.com, AmazonReit.com, apartmentmagnet.com
And fun ones or business ideas I have like candyscientist.com, nonprofitgear.com, hemppapercompany.com. , investinginlosangelss.com, techdemoday.com
And of all my domains he said mmcrowd.com is most valuable at $1,751???
I’m open to all suggestions and will offer legit real estate investing advice to whomever in return. My YouTube channel is investing in the real world of you want to look me up.