People are getting fooled by GoDaddy appraisal

[Arpit131]

I have been watching a lot of posts referring to Godaddy appraisals.
They have a typical appraisal range of $1399 and above for very crappy names. A lot of these can be found in n number of facebook groups where people expect to sell domains for $4500 kind of range in reseller market!

A lot of newbies are falling in trap by seeing that an available name which has a 4-figure estimated value is available for registration fee.

This is where they tend to purchase 10 names and above for $10+ each. Then they wonder why they are not able to sell it.

Do you trust Godaddy appraisals even 1%?

I feel that it is misleading newbies and a lot of domainers into trap with the appraisal value.

Thoughts are appreciated!

 

[DN_Hunter]

I think the GD Appraisal Tool is useful for the Comps it shows (GD has access to some sales that are not listed elsewhere). But I see that it could be dangerous if newbies are using it to make decisions on buying reg-fee names (in the hopes it is worth $x,xxx or more). I fell into this trap about 10 years ago using the Estibot tool (back when it was totally free for as many names as I wanted to check).

 

[NickB]

I fell for this when I first started and it cost me quite a bit of money, they should have a disclaimer CLEARLY showing under the "appraisal" stating that the figure quoted might not be accurate and you might end up with significantly less or more at the point of selling.

They should point out the name might not even sell at all and that it is high risk to try and sell domain names as an investment

Would they do the above? No bloody chance as it would impact on their bottom line...

Do I trust it? No, not even 1%.........but I had to learn this the hard way....

 

[BRANDERX]

The concept is damaging to domain investing in general, not just to newbies.

imo

 

[Bob Hawkes]

This is available ! :

monkey.accountants

Estimated Value: $1,723

It is actually fairly cute (in my out of mainstream sort of way of thinking). Monkey+something as a com has sold many times - e.g. MonkeyManagement sold twice for $3500+ (in .com), and MonkeyTravel for $2900. I think that if you tried to sell it for 100 years there is a 60% chance you would find a buyer between $700 and $2700. Unlike Monkey.shop and Monkey.website, not even a registry premium . I am working on my taxes, wonder if I can find a monkey accountant? In case wondering MonkeyManagement is on a site for a trainer/author/speaker with book by same title.
Bob

ps here is a picture of a Monkey.accountant from Yelp site to rate accountants. Just as I imagined one.

 

[NYJimbo]

Sometimes the GoValue appraisal can be helpful in showing that a price is justified. I generally try to price domains less than GV appraisal so that I will have this backup should a justification of price be requested.
Bob

But sometimes it does the exact opposite. I was trying to sell a medical instrument name to a client who REALLY wanted it, but refused to pay penny more than the $325 that GD said it was worth.

We've all seen valuable names get the "Less than $100" thing too.

 

[DomainRecap]

It's like any other tool that you can take parts of to use in your overall investment strategy. I like the sale history they list for comparable domains, as well as if the domain has sold before on GD, and I do think they hit the mark in overall terms of "X domain is worth more than Y domain" far more times than they're wrong.

Anyone who is looking at a $10 hand reg with a valuation of $1,583 USD and thinking they'll get that tomorrow doesn't understand appraisals - these are just estimates of what an item may sell for, but you may also have to wait years or even decades to sell it.

No one has a "magic formula" that tells you what all domains will sell for down to the single-dollar and no one ever will. Trends change, the economy changes, and the world is in constant flux.

I find it useful for my purposes as I ignore the raw dollar value and concentrate on the underlying data. For example, I found a 5-letter domain I liked (I have to like a domain to buy it), watched it, compared the comp sales, and then noticed it had previously sold for ~$2K+ and had been off the market for a while. I ended up getting it for $25 or so + reg and maybe 8-9 months later ended up selling it for $1500.

So to me, if you just use GoDaddy appraisals as just one more tool in your shed, and not base your decision on the raw and very specific $$$ amount, then it can pay off.

 

[Internet.Domains]

But sometimes it does the exact opposite. I was trying to sell a medical instrument name to a client who REALLY wanted it, but refused to pay penny more than the $325 that GD said it was worth.

We've all seen valuable names get the "Less than $100" thing too.

On the other side of the coin I offered to by a domain from the Namefind portfolio of Godaddy. The domain appraised, by their own AI tool at $5000. They would not accept that price. Their counter offer was mid 5 figure range......Go figure.

 

[Ostrados]

GD Appraisal is not reliable, Estibot is even worse, at least GD gives valuable data of comparable sales.

Estibot tends to overvalue domains with high search volume and undervalue domains with good comparable sales, GD is the opposite it tends to undervalue domains with high search and overvalue domains with high comparable sales.

Also I noticed many times with brandable and invented names, that most of the time Estibot gives them value under 100 but GD almost always gives them $1000+ even with junk names! Which gives you a clear idea about the big blunder of these tools!

Even human appraisals are not accurate half of the time, if the owner of CBDOil posted the domain at NP appraisal section, I am pretty sure he will get $5k-$10k appraisal at most. Who imagined that this domain will sell for $500k?

The problem is that there is no clear criteria of how to valuate a domain, there are many factors to consider, but the exact formula is unknown and may never be found, or maybe the formula does not exist at all.

Even if you get the most accurate human appraisal from the top pros, at the end domain value is what the end user is willing to pay for it.

 

[Bob Hawkes]

I think the essential problem is that especially those new to domain investing don't realize the low sell through rate. I actually don't disbelieve Paul Nick's data that 60% of the time sales are within $1000 of GoValue appraisal (although that is not as impressive as first glance). I think i before someone invested in a domain name they had to certify that they understood the following disclaimer that I made up.

Many domain names never sell. There is no guaranteed return on any domain name investment, and you may well lose everything that you have invested. Domain names have a carrying charge of the renewal fee each year. These charges may go up over time. The appraisal is uncertain and is no guarantee of value. If you were to actively try to sell the domain for 100 years there is about a 60% chance it will sell at a price within $1000 of the appraised value.
​

Bob

 

[Internet.Domains]

It's been said the appraisal tool is AI......If it is AI, it's safe to say AI has a long way to go. A reeeaaaaalllly long way to goooooo.

 

[DomainRecap]

If you were to actively try to sell the domain for 100 years there is about a 60% chance it will sell at a price within $1000 of the appraised value.

​

Bob

Time to take my vitamins.

 

[Bob Hawkes]

You know you are just encouraging people to waste money.

OK just to be clear, I don't recommend monkey.accountants as a good domain investment , the exact word monkey has never sold in a new gTLD, and even in .com Monkey Books sold for $15 a few years ago and Monkey Charge (com) sold last week for $10. By the way monkey with the singular accountant is indeed a registry premium.
Bob

ps I think I have helped take this thread off track. Sorry. This is my last post re monkey accountants. (at least today )

 

[DomainRecap]

If the tool was more precise, would we be more accepted?

Nope, as the entire concept of a precise domain valuation tool in an industry this volatile is impossible.

I'd actually like to see GoDaddy move in the opposite direction, and move to ranges, for example something like Copper, Bronze, Silver, Gold, Platinum, etc. with wider price ranges and more flexibility.

 

[Name Trader]

On the other side of the coin I offered to by a domain from the Namefind portfolio of Godaddy. The domain appraised, by their own AI tool at $5000. They would not accept that price. Their counter offer was mid 5 figure range......Go figure.

It's a negotiation. They have to start high before they will accept a lower amount

 

[karmaco]

I think the tool is helpful for comps and for finding out potentially valuable keywords and what they have generally sold for.

You should not make all your decisions by the number it shoots out. Sometimes it’s too low especially on things that are on the horizon without established selling patterns or on made up brandables forget it

I don’t think anyone is being mislead per say. It’s a hell of a lot more accurate than Estibot which values a lot of trash as good and good as worthless.

After awhile you begin to have a feel for what is a good name and what is not no matter what the supposed valuation is.

 

[Recons.Com]

Worse, people are sweeping up anything valued above $1700 (just couple of months ago it was above 2k, and a year ago above 2.5k).

Many will burn badly with it.

Still remember the time suckers falling for GD showing pagerank and having bidding wars over those, then it was traffic, anything with above 50 had someone bidding right away, now it is Gd magic number.

Someone might bring class action lawsuit against them eventually for misrepresentation.

 

[NYJimbo]

Why am I sceptical that the number is not known to the 18.2% precision! Although seriously I did not realize that anyone was already stating it this way, so it is a good start, I guess. Thanks for sharing!

Yeah its a service that you post your "name" and it tells you it's "worth".

 

[Bob Hawkes]

In addition to useful comparator sales that we don't have in NameBio (I wish they gave date of sale though!), I think that GoDaddy GoValue has (arguably perhaps) helped the domain industry in one other way. As we all know even owners of significant businesses often think that a good domain should sell for $100. GoValue I think it has helped see more realistic valuations, provided the considerable uncertainty in the tool is understood. A related issue is with organizations where some sort of board have to approve a domain purchase. They are used to getting competing bids, appraisals, comparative analysis, etc on other purchases. Sometimes the GoValue appraisal can be helpful in showing that a price is justified. I generally try to price domains less than GV appraisal so that I will have this backup should a justification of price be requested.
Bob

 

[NYJimbo]

Then I learned. I use GD tool for comparable sales now and that's about it.

True, but in some cases you have to check the date of a sale. If a trend was going on during let's say, 2007 and a slew of that trends names sold for $xxxx but that trend is over, the 12 year old sale price is listed without the date. People appraise names like it and see $xxxx comparable sales prices and think they are on to something. But those names are now worth low $xxx at best.

 

[NYJimbo]

(in my out of mainstream sort of way of thinking)

You know you are just encouraging people to waste money.

 

[dande]

Automated Appraisal tools are never built to benefit domainers. They are built to screw us, and help enrich the owners. Take estibot for example, is has never helped anyone predict prices accurately. Yet. we have made it so popular that the platform may well worth millions of USD in market valuation.

 

[ResoluteDomains]

If the tool was more precise, would we be more accepted? (I presume yes, but perhaps there is a feeling that appraisal tools in general are a bad thing?) I really think that the tool could readily be much better than it is - I mean look at how good AI is in many things in our everyday life. If we ever got to a point that valuations were very good, it would make the whole industry open to other things, such as mutual fund type holdings of domain names.
Bob

I dont see how any automated domain appraisal tool could ever be precise.

Appraisal tools for physical real-estate have been around for several years and are still being tweaked. Many realtors dont even wish to discuss those automated tool values. However, like you said (with respect to AI ) I think if anything could become more precise its appraised values of real estate. Within developments there are generally are many of the same exact homes. They very similar property dimensions, same age, but one may have new carpets, roof, AC, water-heater whereas another may not. So I can see how they generate those values based on what has sold that is exactly like or very similar...

However, there is only one domain name of its kind. Personally I think its extremely difficult to comp a domain with others. Perhaps in a very large group like 4-character or 3-character dot coms, its easy but the true value of many domains is what value it brings to the buyer for their business or personal use and estibot or GD cant ever fully know that. IMO.

 

[biggie]

And if all the valuation tools suddenly disappeared, .

what you think we did as domainers, before valuation tools were invented?

before the past sales lists were categorized for you to browse?

back then, when lowball offers were made, they were refused by sellers who wanted more
that's why many names are held for 10+ years or more before being sold

same thing now, if you know the value and have confidence in what you own, then you refuse to sell, until you get offer you like.

imo...

 

[Bob Hawkes]

What does that mean "60% chance to sell within $1000 of the appraisal value"?
+-1000 error margin or something else?

Hi,

It was just my very rough interpretation of the following.

• Paul said at NamesCon that about 60% of the time that they are within $1000.
• Different methods lead to different sell through rates, but particularly for a not very experienced domain investor I suspect that (for a sale at near appraisal value) the number is 1/100 or 1/200 per year per domain name.
• If the chance is say 1/200 then after 100 years you would have a 50/50 chance (approximately) of selling.

Clearly none of these are precise and don't precisely lead to my statement, but I think the statement gives an order of probability. I think most who register a bunch have an inflated sense of how fast and easy they would sell. Some statement incorporating both the typical industry wide sell through rate and the idea that about 60% of the time they are within $1000 would make the person realize the true situation better.

I personally find that GoValue with certain types of domains does a half-decent job, but what people don't fully realize, often, is that even if the domain name does have a probable sales value of say $1500 the odds that it would sell at that price only after many decades.

Bob