“Good Afternoon,
I was driving on South Ocean Drive in Palm Beach the other day when I passed your undeveloped land. I noticed you don’t have a house built on the land, and I think the location would be perfect for the home I am planning to build. It is on the Intracoastal and across the street from the Ocean, which is exactly what I am looking to buy for my family’s new home. For your undeveloped land, I would be willing to pay you $50,000. Please call me if you are willing to sell it. I will even pay for the escrow and legal fees.
Regards,
Anne I. Diot”
Imagine if a property owner received hundreds of letters like this a month. While this letter is far fetched for a property/land owner, this parody is very similar to emails domain owners receive every day. People assume that just because they see an undeveloped domain name, they should be able to buy it for a fraction of the value. Developing a website on a domain name can take years to complete. Just because a domain name hasn’t been developed, doesn’t mean the owner has no plans for it.
When will people learn?
I don’t think there is anything wrong with this inquiry. I’ve bought a few great domains (for a fraction of the cost) by just emailing owners of high quality domains that were currently not developed.
We all know domain names are not as liquid as stocks or real estate. There still is a huge gap in some instances with the perception of value from one person to another. Some people still value domains based solely on PPC revenue – others see the branding power of the domain that supercedes whatever the name makes in PPC revenue. And of course there are domain owners out there who still have no idea what PPC is.
A good domainer will try and take advantage of such an inefficient market to find those great deals.
‘
***UPDATED BY ELLIOT***
I agree with your sentiments, but my post was more critical of the people who make ridiculously low offers for obviously good names. The land I was referring to would be valued at in the tens of millions of dollars, so in domain terms, it would be like offering $50 for a 3 letter .com name. As far as I know, this type of name has been completely mined, so a $50 offer is clearly ridiculous.
Eliot:
I did a double-take when I started reading your post because I was driving on Ocean Drive in Palm Beach yesterday.
That being said, the “Can I buy your undeveloped real estate for peanuts?” comparison is my favorite dopey analogy when it comes to buyers negotiating on the cheap for an undeveloped premium name.
I run into this type of “logic” quite frequently. The most recent was only last Monday when a gentleman called about buying our Grape.com. I won’t reveal the name of his company, but they are very successful real estate developers.
After he finished with his “You’re not really doing anything with Grape.com, so can you give me deal?” pitch, I asked him if he personally owned any undeveloped beachfront property.
It turns out that he does. He owns 1000 feet right on the water (Caribbean). So, I said, “Tell you what, I’ll trade you our undeveloped prime real estate for yours.”
He chuckled and replied, “Nevermind, point taken.”
We receive email like that every day since 1995. I am still amazed at the huge learning curve for understanding what we all do as domain land owners. My brother and I have used the same analogy to try to explain it but few “get it”. Back in early 1995 many I spoke to thought the internet was a fad and that domain names did not matter. Many could not understand where the internet was headed. The same still rings true today. I am not pessimistic about this. As an domain industry we’ve made great strides explaining domain real estate in online conversations through blogs and related articles for those looking to find rich content on the subject. The greatest clarifier though is success. The public will always understand that Mr. or Mrs. XYZ made $20mil from an online business that was started from scratch. Those kinds of articles make people believers and we need and will have more of them in the future. PR, PR, and more PR.