During the course of the past three years, I’ve sold several domain names to real estate agents and companies in the real estate business, and I’ve also unsuccessfully negotiated with them as well. I want to share a bit of insight I have gleaned from my experience.
When I price my domain names, more often than not the price I give is at optimistic end of where I would like to sell a domain name. Obviously if I think a domain name has a market value of $25,000, I am going to ask for $25,000 when I am asked for a price. As is the case with most negotiations, the buyer generally wants to pay less than the asking price, and the negotiation determines where you end up.
Dealing with real estate professionals can be a bit different. Most real estate professionals deal with homes and properties where the final sale price is somewhat close to the asking price. On occasion, they might end up negotiating a deal that is 20% more or less than the ask, but most of the time, they are dealing within a fairly tight range.
When it comes to domain names, that might not be the case. A domain owner may ask for $25,000 but would be willing to sell the domain name for $10,000 cash with a quick closing. Domain negotiations are far different than real estate negotiations. There is a far wider negotiation range with domain names than real estate.
As a result of the differences in negotiation strategy, if you price your domain name a significant percentage higher than the real estate professional would pay, he or she may not even counter offer. If you are offering a domain name for $25,000 and the counterparty replies that the domain name is priced much more than they would pay, don’t assume that their offer would be $100 or something else unreasonable. There is a good chance it might be, but there is also a chance they are willing to pay $10,000 and didn’t want to insult you with an offer that is less than half of your asking price.
Different people have different negotiation strategies. I happen to think that you should consider how a real estate professional might negotiate before writing one off completely. You might not get close to your asking price, but that is all relative, and perhaps the offer doesn’t need to be all that close to induce you to sell your domain name.
Right on the money Elliot. I too work frequently with Real Estate professionals and it’s all about their own frame of reference with regard to price negotiation. Thanks for the article!
Elliot or others who might have insight,
Any tips on how to price a real estate domain?
I believe factors to consider would include:
-What price variation do you believe there is between city+realestate and city+homes or city+condos ? What minimum population size do you believe is needed for a real estate domain to have any meaningful resale value?
-How much type-in traffic or exact search volume is really needed to convince an agent of the lead generation potential of the domain? Or is branding value good enough?
Given demographic changes in the US, do you see any potential in Spanish real estate domains for US cities?
These are the general factors I consider when buying and ultimately selling, with different weight on each (no particular order)
1) Population of city/town
2) Home values
3) # of real estate agents (prospective buyers)
4) Personal comparable sales
5) Public comparable sales
6) # of other extensions registered
7) # of agents in market with their own websites
8) Market conditions (my business and general domain market)
9) Price of name
10) Comparable prices
I don’t think any agents have asked me about traffic. From my experience, most see it as a good opportunity to have an authoritative domain name, besides their real estate branding.
I am sure there is a market for Spanish and other language domain names, but I don’t speak any other language fluently and I’d rather stick to what I know. I may be able to buy decent names that have meaning in other languages, but negotiating would be more difficult.
This was another very nice useful post, Elliot, but in all candor I have been disappointed lately that you have not been covering and addressing some of the really big important issues that can affect us all and fundamentally even life as we know it, particularly what has been in the works regarding ICANN, and to a lesser extent (here, that is) the Net neutrality issue.
As far as the ICANN issue is concerned, I highly recommend you take a look at the debate that transpired at the other “DI” blog here recently: “Second US bill would block IANA transition” – http://domainincite.com/16400-second-us-bill-would-block-iana-transition
I apologize that you’ve been disappointed… To be completely honest, I haven’t been following along with it.
This probably sounds a bit foolish and maybe even short sighted, but I find public policy a bit of a bore, so I choose to ignore. Yes, burying my head in the sand isn’t all that wise, but there are other resources (like Domain Incite) that do a better job of that coverage.
With my blog, I tend to cover topics that either interest me for personal or business reasons, directly impact my business, or are pertinent to my business that might help others (like this tip for example). I don’t have the time to cover all topics and I don’t want to spend the time reading up on something political like this issue when others are doing a good job covering it.
Sometimes I price the domain a little higher then what I really want and add in the email “I am always willing to listen to reasonable offers” and this at least doesn’t close the door and 9 out of 10 times starts a conversation with the potential buyer. They may come back with a low ball offer, but any offer is a great opportunity to continue the dialogue. Adding some on top gives you good wiggle room and they always feel like they got a deal.
One small tip that really does work is sometimes I will respond with a girls name. It could be a fake associate of your company or whatever but most buyers open themselves up much more when they think they are responding to a woman. Try it once and you will see how different the conversation goes.
Good ideas… Personally I am not all that comfortable using someone else’s name, especially a girl’s name. I would hate for the buyer to ask for a phone discussion and then have to be evasive.
I am probably be too honest when negotiating, but I don’t have to remember a story I told 🙂
If it ever happens just give your wife a crash course and put her on the phone. 🙂
LOL…. she’d probably do fine, but my luck, it would come at a time she is with a patient and not able to be on the phone.
There are to many options in real estate domain names and most agents or brokers do not understand a keyword name. I find agents using city+homes, city+homesforsale, city+homelisting, search+city+homes, findhomesin+city and the list goes on.
I think I would only invest in:
[City]RealEstate.com names and possibly [City]Homes.com.
A couple weeks ago I saw an expiring small-town less than 20k population city+realestate domain at Godaddy Auctions. I figured if I could pick it up for a backorder I would take a chance. Then the day before the auction date I saw a bid appear so I decided I might be willing to pay $50-$60 – again thinking this is a really small town so how much can your really ask for a domain and how many potential end users can there really be. Anyway, two aggressive bidders bid the price up with the winner taking it for $2800.
What was that name?
StSimonsRealEstate.com – reported on DNJ – note it is an aged domain and apparently was a developed site for a local real estate agent.
Unfortunately the previous registrant died November 2013. He was a real estate broker in St Simons Island, Georgia. I checked Zillow and the first 120 listings there are over 1 million dollars with the top listing at 17 million so its a very lucrative area.
The new owner is a domain investor that lives about 5 hours from St Simons so he no doubt sees the potential. It’s pointed to Schillings Internet Traffic and is for sale.
I wouldn’t have even bid on a geo that small were it not for the fact that I had visited the town many years ago as a student on spring break with a female friend whose family lived in that community.
I sold at least a dozen domains to Realtors and most all of them were for the purpose of traffic, Cites, Towns and Communities, Honestly the ones I sold were not all that great and ranged from $1000 to $2000, they just weren’t willing to pay very much for any of the good ones in the 5 figure category.
Their almost like car salesmen, they like to negotiate but they do it in a very professional way, which is a lot less frustrating.
Speaking of Real Estate firms!!
I was just insulted I guess you could say. I received a $100 offer through Fabulous.com for the domain NationalDevelopment.com. I have been reading up on domain sales and that you should communicate with all incoming offers which in the past I would have ignored the $100 offer. After reviewing the email address domain of the person who made the offer I figured with the size of the company they may be a serious buyer. I replied with a thank you for your offer email and that I might be willing to sell the domain if they were seriously interested. I received another email from this person this morning stating they would be willing to pay $150 for the domain. I have owned this domain as well as the .net since 1999 which my domain renewals are probably close to $250 I replied that they were missing about 3 0’s I do not think $150,000 is unrealistic when I see the prices of some pretty stupid domains. At any rate she replied with a thank you anyway.. I have no problem with keeping these domains in my portfolio for another 15 years but it was so hard not to tell her to go F herself. $150 my worst domains I value at over $5000 what she is thinking I have no idea but they won’t be using this domain.. I will die with it an leave it in my will for my nieces.
I also hope she realizes if for some strange reason they approach me on this domain name in the future the asking price has increased to somewhere between $200,000 and $300,000.
The companies homepage is http://natadvisors.com which if you surf around the site a bit you will see they have a National Development division. I am guessing they have a completely inexperienced person as their “Corporate Marketing/Communications Manager” and it just cost them a domain for their company..
Am I wrong?
I don’t know why your getting so upset to the point of publishing their web site and trashing them for not buying your domain, very unprofessional IMO, It makes you looks like a crybaby who didn’t get his way
As for the domain, it’s a high x.xxx to low xx.xxx domain at best, if you think its worth anywhere near 6 figures then your living in la-la land, My suggestion for you is to park it at DNS and let them broker it for you, they’d do a lot better job than you did here.
Not trashing them and not being a cry baby.. I may have sounded upset but honestly $100 to $150.. why even bother me with an offer. I can understand your point but I was just sharing the story since it was happening as I read this post.
I have never been proactive in selling any of my names and have just recently listed a few at godaddy auctions but I can see that is really just another scam.
I am a little confused with your thoughts on this domains value. I see Fig.com listed on mediaoptions for $350,000 and your trying to tell me this domain com & net isn’t worth more or even close to that.. I’d really like to know how you can justify that.
and I apologize for crying..
I’m not going to educate you on the values or differences between NationalDevelopment.com and Fig.com, that’s your job. I’m quite taken back that your even comparing the two since both are MILES apart in every aspect.
And why are you valuating your domain based on a asking prices? are you serious? you should be looking at completed sales of comparable domains. I have to ask, how long have you been domaining?
Not really valuating my domain on an asking price of another at all and I do understand a three letter domain has value but it also comes down to revenue and if selling figs generates more revenue than construction and property management.. well it’s news to me. I just find it comical that some of the prices I see posted for some domains that can’t even be pronounced and then the couple I may have that actually spell something and I am told they have no value. I have not been domaining for very long actually just started getting into this past month.
I registered about 500 domains back in the late 90’s and have sold a handful and all for more than x,xxx. For the most part I just work a full time job but recently I have been getting approached by brokerage firms and a couple of email offers so I figured maybe it is time educate myself and maybe even try to sell some or at least learn a little more and get proactive.
I’d also like to mention that I only posted that domain above so you could see the relevancy of the domain and the company.
As for completed sales well I’ve seen MI.com sell for 3 million and regardless it was just two letters seems pretty ridiculous to me. I’ve also used spyfu and google analytics and the rosener equation and I have been reading and trying to educate myself.
I have mostly brandable domains. The last name I sold was OurTime.com it means nothing at all but I bet you see the tv commercial all the time.
Thanks for taking the time to discuss this with me and I don’t even mind the criticism as it will only help me to understand this business better.