I list the majority of my domain names for sale on GoDaddy via its Afternic distribution network. These are the easy to replace inventory types of domain names I try to buy and/or sell every day for reasonable prices and returns. Some of my most valuable domain names are not listed for sale via GoDaddy though.
When one of my domain names that is listed for sale on Afternic gets an offer, a broker typically contacts me to let me know how much the prospective buyer is willing to pay. GoDaddy is working on my behalf on this type of negotiation, and they work with the buyer to try and get a deal done at my asking price or close. If a deal is successful, I am responsible to pay the full commission. By way of example, if someone offers $2,000 for my domain name and I take it, I will net about $1,600.
In this scenario, GoDaddy is representing me, but a prospective buyer may also believe GoDaddy is representing them as well. I would imagine GoDaddy is focused on closing a mutually agreeable deal, but they are likely working more on behalf of the seller than the buyer.
When a prospective buyer is interested in buying a domain name I own that is not listed for sale on GoDaddy and Afternic, they use GoDaddy’s Domain Broker Service (previously called the Domain Buy Service):
A prospective buyer that uses a GoDaddy Broker to buy a domain name pays $119.99 plus 20% commission if a deal is successfully closed. Once a prospective buyer pays the $119.99 fee, a broker on GoDaddy’s Domain Broker Team contacts the registrant of the domain name to present an offer on behalf of the buyer. At this point, GoDaddy is working on behalf of the buyer to get a deal done. Even if the domain registrant is an Afternic and/or GoDaddy customer, the broker represents the buyer in the negotiation. If a deal is struck, the buyer pays the full commission.
From my experience, the broker presents the net offer to the domain registrant. For instance, if the broker presents a $3,000 offer, it means the prospective buyer is offering to pay $3,600 to buy the domain name. I am not sure if there is a sliding commission scale based on the value of the deal.
It is important to know if a domain broker is working for the domain registrant or the prospective buyer, and I think this gives a pretty good overview of who GoDaddy is representing.