I have never been a big fan of free domain name appraisal services. The "values" are often way to high, low or not even close to what I would personally consider paying nor what the vast majority of people would pay. Since every single domain name is different, it is always hard to put a true value on any domain and that can be the case for seasoned domain name investors.

It has been said many times but it is the truth. A domain name is only worth what somebody is willing to pay for it! No matter if the price comes out of the clear blue sky or is gathered based on advertising rates or yearly PPC earnings. A seller and buyer have to come to terms and at that point, the current value between those two parties sets the value of the domain.

The very next day, somebody else could come along and want that very same domain.. which again could yield a different value based on the new buyer and their needs or wants!

Understanding Free Domain Name Appraisal Services

Free domain name appraisal services are set up to work based on algorithms put in place but the creator. It’s one of the things… looks good on paper and "in general" works but several things in the algorithm are often flawed. The creator of the tool needs several pieces to put the puzzle together but many pieces of the puzzle have jagged edges and are gathered from other sources. This can cause troubles.

Overture. Basically the amount of searches done for a matching term(s) measured at one search engine. Overture data was once provided by Yahoo but has not been for a pretty long time.

The biggest problem, Overture data is pretty old (outdated) and things change pretty quickly online. One must also consider the search volume at Yahoo compared to others or All together! Secondly, the Overture data and even the Google Adwords Keyword Tool can get mixed results based on terms and can have a hard time telling if the term is Backwards, a hyphen is included (search engines see hyphens as a space) and plural and singular terms. Overture is a pretty large part of most algorithms in free domain name appraisals.

A clear example of the above is a domain currently listed on BargainDomains.com today. ScreenFlat.com with an appraised value of $8,800 but currently a $7,600 savings and available for sale at $1,200. This is a clear backwards term of Flat Screen. Just one piece of the puzzle off and the computer still gives the domain a pretty high value! One that many would suggest if you were to pay the appriased value, you would be overpaying by a good $8,000 or more! In reality, screen flat doesn’t mean anything to me besides that it’s backwards. If the domain was FlatScreen.com, it would be a different story and would have clear meaning and value.

Clearly, all three of those things I pointed out above in the alogrithm can make a huge difference in the value of any domain name! If one of them is not detected correctly in the appraisal, do you think the appraisal is going to be accurate?

If you are the current owner of the domain, I’m sure the high appraisal will put a smile on your face but reality will likely settle in when nobody shows interest in your domain name or offers anything close to the appraisal price.

Estibot.com, which is the most popular free domain name appraisal service, is the closest I have seen to getting things right, but and it’s a big but… to many domains get an average value from what I see! It becomes a hit or miss situation, and to me.. then becomes not worth the time to get any appraisal at all.

Computer or Real Person Appraisal

I could write a lot about this, but again, domain names are only worth what somebody is willing to pay you for it! Even if you pay somebody (a person) to do a domain name appraisal, the chances are…. the person doing the appraisal may not think like the end user who has the passion and drive that would really purchase the domain name! Appraisal values should come from the owner of the domain name, period!

My Advice

I often tell people to go by your gut feeling. Some people say, well others may have more experience with domain names and whatever. Well, when you purchased your car, what did your gut tell you? Too expensive? Cheap, buy it? This thing is junk? I want it and I need it? What did your gut tell you when you purchased that nice new TV? I can find a better deal? Computer? Clothes?

Domain names are a part of many peoples lives and have changed a lot of peoples lives for the good and the bad!

People purchase cars to help them make money. People purchase domain names to help them make money. Lots of cars, lots of domain names! Some are not what you may think they are all talked up to be, both domains and cars.

A domain name purchase is something that you really need to think about. You need to have some knowledge of the internet and how it works before you jump in head first and invest a fair amount of money. You do not need to spend millions of dollars to get a "good domain". Many crappy domain names have high listed price tags and in return doesn’t mean that a high priced domain name will be your best choice!

Ask yourself and decide if your Want factor is higher than your Need factor! I often see what I think is the Want factor overpower the Need factor and can drive the price of a domain name purchase too high!

Negotiate!

We all can’t be great at everything and a lot of people lack negotiation skills or lack the knowledge of a general field. If you have no clue about domain names but you feel you need / want a "good one", hire a domain name broker that has YOUR interest in mind! It is very likely the domain broker will give you sound advice and will be able to tell quickly if they think you are getting a fair deal or not.