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!

 

[Ostrados]

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

I found this video from NameCon:

At min 25:33 he says:
60% of sales were withing $1000 of GD appraisal
89% of sales were withing $2000 of GD appraisal

I still not sure what he means by within $1000 and within $2000? And how is this related to selling chance?

 

[DomainRecap]

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

Exactly my point. There have always been lowballers and there always will be - only their tactics change.

 

[karmaco]

When you punch in a name to valuate if it’s for sale on GoDaddy it shows the price and the valuation both. Maybe the numbers are so close to what GoDaddy says is because people feel compelled to stick close to the price given by GD. It looks like you are overvaluing the domain if they say it’s worth $1500 and you list it for $8K.

In this regard the valuator can be a hindrance. I don’t sell at GD so it doesn’t affect me but heard a few stories about buyers mentioning the GoDaddy appraisal in a negotiation. What they don’t know is vast majority of GD sales are wholesale domainer to domainer prices.

 

[TCK]

All the auto evaluation tools don't provide true value but some, like GoDaddy's, do offer historic averages that can be useful. The problem is when end-user/buyers take them at face value (and don't read the fine print). Here is an article on the balanced view of auto evaluation in your appraisal of domains. Auto eval will never replace human judgement.

 

[DomainRecap]

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).

Most of this is GoDaddy "partners" using an algorithm (that includes appraisal valuation) to create a "line in the sand" and auto-bid on anything above it.

 

[domainshop1]

Most of this is GoDaddy "partners" using an algorithm (that includes appraisal valuation) to create a "line in the sand" and auto-bid on anything above it.

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.

I totally agree with you.well Calculated

 

[NYJimbo]

Pretty much any noob will fall for it, they simply dont know better. Whats worse is that Estibot and others charge for this service and offer bulk appraisal tools which let you dump large groups of names and sort by appraised price so you end up grabbing the top priced domains. I know when I got "serious" in domaining I thought paying for these services was the "pro" thing to do.

GD appraisal does have some value, but you have to get a feel for it and understand its limitations.

Many new domainers get an appraisal for something as low as $900 and figure "Well, if I put it up for sale for $450, it's got to sell, right ?". It just dont work that way, but they dont know that until they get burned or come to a place like Namepros and learn.

 

[NYJimbo]

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.

A different appraiser here has a l̶a̶u̶g̶h̶a̶b̶l̶e̶ interesting way of doing it. You get an astronomical valuation like $35,000 but if you scroll down you see a qualifier that reads something like "18.2% chance of selling in 20 years".

 

[PeakDots]

When I first started I used appraisal tools such as GD,Free Valuator, Estibot etc. Appraisals were all over the place.

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

This is where knowing your niche and knowing what your name is worth comes into play.
And a buyer also knowing the value.

Just look at the recent sale of CBDoil (com) for 500k.
GD appraisal is a little over 16k

These tools can also hurt a seller if a buyer wants to go by these appraisal tools.
Some names are undervalued. Imo

 

[NYJimbo]

This is available ! :

monkey.accountants

Estimated Value: $1,723

You know the saying, "Put 100 monkeys and 100 adding machines in a room and ..."

 

[ET76]

Do you trust Godaddy appraisals even 1%?

I don't trust any automated appraisal

 

[biggie]

You know you are just encouraging people to waste money.

I agree

cuz newbies on hear and read, what they want to hear and read
and rarely will they question what they think is questionable.

as for appraisal tools in general, the reliance on them, gives them power over you

and if that reliance continues as is, "then the appraisal tool will become a standard, by which you must price your domains in accordance with"

still, there is a difference in using such tools to estimate or check the tools valuation of a domain that you KNOW has value, versus using it to discern IF a domain has value

the latter, is the fault of the user, not the tool.

imo...

 

[DomainRecap]

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.

I agree, and a company any large as GoDaddy providing this type of tool really undercuts those who actually believe that you are somehow obligated to sell them a domain at registration fees.

And I also agree with you that it's the concept of having a highly visible domain name valuation tool that is key, not the specific amounts it provides.

 

[Fadi H]

"Found money is the best money.

Your domain could be the name of the next big start-up or brand. But how do you find out what it’s worth? GoDaddy Domain Appraisals gives you the most accurate estimate available. Our exclusive algorithm combines machine learning with real-market sales data compiled from our 20 years of experience. After all, we manage millions of domains as the world’s largest domain registrar and we’re the largest aftermarket name seller, so we have experience in the field. You’ll even get back samples of comparable domains and their values to help you decide what step to take next.

And it's all free."

The above is stated on GoDaddy's appraisal page, I think it plays a factor for newbies to spend their hardly bargained money after reading this. But well, Many has fallen on the automated appraisals trap including me, it's the inviting door to enter this industry for many. Who got the spirit of a domainer will take the lesson and keep on the challenge. The ones who still believing in the found money will spend some time trying to sell their crappy names and then most likely quit, Registrars will keep the profit in any case and things goes on...

 

[ResoluteDomains]

I do not like it because on more than one occasion I've had potential buyers refer to the "godaddy valuation" as some sort of defacto-standard price system causing them to way under-bid the domain. They were thinking that the value GD came up with was the best price anyone could get but they werent even willing to offer that, they were going with some 20-40% of that number instead of knowing what value the domain brought to their business. Its a dangerous tool.

 

[DomainRecap]

I do not like it because on more than one occasion I've had potential buyers refer to the "godaddy valuation" as some sort of defacto-standard price system causing them to way under-bid the domain. They were thinking that the value GD came up with was the best price anyone could get but they werent even willing to offer that, they were going with some 20-40% of that number instead of knowing what value the domain brought to their business. Its a dangerous tool.

I just want to be sure what we're talking about here.

Do you actually believe that if the GD Appraisal Tool did not exist, that this buyer would have just smiled and paid your full asking amount?

 

[Bob Hawkes]

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

 

[DomainRecap]

No, where did I say that?

That's why I asked, as it's pretty obvious the guy's a lowballer who is clearly abusing the GD valuation as a way to get your domain for a cheaper price.

I've seen it all, people pretending to be college students, researchers, not-for-profit charities, etc. and I'm not going to start blaming colleges, research facilities, or charities for this behavior.

 

[Bob Hawkes]

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!

I have used both instruments many times and this TOTALLY describes my thoughts as well. I think some users don't realized the different emphasis in the two. And re brandables, I think neither are of any help really.

If they instead of stating a value gave a range, it would at least better demonstrate the uncertainty in the values given. That is rather than GoValue say it is worth $1485 (which sounds very precise, but isn't) they said their estimate of value is say $200 to $2500 that would be an improvement (although then some people would look at the high end and some end users trying to bargain down would state the low end ).

Bob

 

[Bob Hawkes]

I found this video from NameCons:

He says 60% of sales where withing $1000 of GD appraisal
89% of sales where withing $2000 of GD appraisal

I still not sure what he means by within $1000 and within $2000? And how is this related to selling chance?

What he means is when GoDaddy/Afternic sell a domain they keep stats on the sale price and the appraisal price. 60% of the time they are within $1000 (and almost 90% within $2000). That means if say their appraisal was say $2400 then 6 times out of 10 the selling price turns out to be between $1400 and $3400. That is not as impressive as it sounds, since most sales are less than $3000 so it is easy to be within $1000 with an instrument that says tons of names are worth about $1000.

The same presentation also pointed out that completed sales went up significantly immediately after they started showing appraisal values.

The sell through rate was not part directly of that, but if you look overall it is clear to be something the order of 1/100 per year. He used some assumption in his models to make a business selling domains, later in the presentation, but did not give the assumption as I remember from my notes.

Bob

 

[Ostrados]

@Bob Hawkes
That what I understood at first that it is an error margin of +-$1000 .. but I was on doubt that I understood it correctly after seeing the video where GD presenter seems proud that they achieved 60% within only $1000 error margin! I thought maybe he is talking about something else because nothing impressive of what he is talking about . So if GD appraisal was $50 and the domain was sold for $1050 then they did decent job within $1000 error margin? and the $2000 margin is even more laughable

 

[Name Trader]

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

Ambidextrous

 

[Bob Hawkes]

@Bob Hawkes
That what I understood at first that it is an error margin of +-$1000 .. but I was on doubt that I understood it correctly after seeing the video where GD presenter seems proud that they achieved 60% within only $1000 error margin! I thought maybe he is talking about something else because nothing impressive of what he is talking about . So if GD appraisal was $50 and the domain was sold for $1050 then they did decent job within $1000 error margin? and the $2000 margin is even more laughable

Well I might not say laughable, but I totally agree it is not as impressive as at first seems. There is also the question whether the appraisal influenced the price that it later agreed with within $1000. i.e.are buyers more likely to close deals when the two agree (my guess is yes to some degree) or even are some sellers more likely to set sales prices not more than $1000 different from appraisal. Less sure about that.
Bob

 

[Name Trader]

Actually in the nonpublic NameBio under $100 there are more sales than above $100 in .com by a fair factor. For example in last month in .com GoDaddy 6135 sales above $100 and 32,300 below $100.
Bob

Which prompts the question. Is this domaining business, and the valuation business which supports it, just a complete sham? Should we be doing something more worthwhile with our time and money? Like what?

 

[Bob Hawkes]

Not sure if anyone has noticed but their valuation service has been throwing an error since Thursday (for me at least). This is the 4th day now.

Error is:

Show attachment 119907

Strange. It still works for me (although mine is through the Canadian GoDaddy interface).