Does anyone know what the established tenets are of domain appraisal? In real estate there are three methods for appraisal: 1) comparative sales, 2) income method and 3) replacement cost. I'm sure the methods for domains are more complicated and vary in direct proportion to ones internet talents, but does anyhow have basic tenets to share? I.e., how much more are two word domains to three words? .com to .net to .org? site age, etc.?
I think your real estate appraisal analogy is a good one. Similarly with domains as with homes - an appraisal is only that individual's (licensed and regulated as they are) best guess as to the likely market value and not a carved in stone message from god. Knowing the real estate appraisal system - I would say that domains are similar at least when comparing the "comparative sales" method and the "income" method. Comparative Sales - you can always look to what a similar domain to the one you are interested in sold for and then - like with real estate appraisals try and make "adjustments" for any differences. Income Method - here you can look to what a developed name would bring by what sort of monthly income it is bringing - try and make an educated guess to the continuity of that income - then multiply it by say 6-8 times (some will argue more or less) that monthly figure for a decent idea of what an income producing site would generate if you sold it. And just with houses you will find some buyers happy to pay that figure - and others that think you are way over the "market". Other than that - "Tenants" - not sure above: .com > pretty much everything else shorter domains > longer domains Keyword Rich > "Cute" (unless you have a big "branding" budget) I am sure there have been LONG books (or at least ebooks) written on this subject.
sitespeculator, thanks for your feedback, I really appreciate it. I understand the general direction/concept that .com > pretty much everything else, but what is the magnitude of that delta? regarding the income method, the multiple you propose is 6-8 times annual earnings correct? thanks again.
From what I have seen most of the more "basic" developed sites don't really sell for much over 6-10 MONTHS income - just because the market changes so fast that getting folks to pay much more than that is tough to get. When I say "basic" - I mean most affiliate sites - where someone has either skinned or copied a Clickbank site or other affiliate style site. If this sort of site makes $200/month - I would expect a price tag of less than $2000 - again this is just my opinion. Obviously you can find sites where the subject matter is a bit more static or the product/service your selling is more proprietary (and you can control that) then you might get a bigger multiple (in some cases MUCH more than that). The .com vs. .whatever - is tough - you can go to dnjournal.com and check out the disparity of recent sales prices between .coms and other extensions - it is typically a pretty BIG difference. Good Luck -