Domain Valuation Process

I no particular order, I have a long list of criteria that I refer to when trying to estimate the value of a domain name that I am buying or selling. Domain name valuation is more of an art than a science because motivation of the buyer and seller are hard to quantify.

This is the domain valuation process I use when I am planning to buy or sell a domain name. It is best to set a low end and high end price range since setting a target price on a domain may encourage my client to fixate on that as a target price.

Regarding the domain name

• Is the domain developed?
• What is its current use?
• Is it in search engines for relevant keywords (also search "keyword keyword" with quotes to force results that only contain keyword keyword next to each other.
• How about the keywords of the domain together without the extension in Google?
• Any incoming backlinks from other sites?
• What does the cached page in the search engines look like? Has the use recently changed?
• Do DomainTools.com whois look up to discover other domains on the same server, creation date, whowas ownership records and other information.
• Search Archive.org to find past use of domain
• Where does the domain show up (using my list of rank checker tools) in the top 40 search engine results in Google, Yahoo and Live?
• Are other extensions taken? If so, when were they registered? Be sure to check the singular or plural, dashed version, ing version or ed version. Check .de, .co.uk, .com.au, .ca, .jp etc. too.
• Is it listed for sale Afternic, Sedo or other marketplaces?
• Search for the exact domain with extension in the search engines and analyze results.

Regarding the buyer

• How motivated is the buyer to acquire this domain?
• How soon does the buyer need to own it?
• Would they consider leasing if purchase price is out of their budget?
• Do they have any history with the domain, related domain, current or past registrants?
• Are they qualified to pay the estimated purchase price?
• How soon could they close?
• Do they need a contract? Do they need to have their lawyer review it?
• Do they need to go through escrow?
• Do they need financing?
• Are there other decision makers who have to sign off?
• Are there any reasons why they would back out of the deal?

Regarding the seller

• Is this a private individual, domain Player or corporation?
• Do they live in the US or abroad?
• Does the current registrant own other, many or similar domains?
• Have they sold before?
• Are they known on the domain forums?
• Are they known to me personally or can I network my way in?

Regarding the industry and keywords

• Is this in a big industry with lots of corporate players who would want the domain?
• Is this a keyword or industry domain with big ticket items like real estate, travel, heavy machinery?
• Is this a keyword or industry domain with commercial appeal?
• Are the keywords high PPC revenue words?
• I also check past sales of similar keywords using DNSaleprice.com and NameBio.com. Have a look through DNJournal Sales Archives.
• Check with Estibot, the free appraisal service. I usually don't order appraisals unless my client requests one. Moniker, Sedo, Afternic and Godaddy are just some of the companies that offer appraisals.

Lastly...

After initial contact with current registrant is initiated, ask for traffic and revenue statistics. Also ask if the domain has been on the market anywhere in the past. How long has the current registrant owned it? There are many more questions to ask the current domain owner but now we are getting into negotiations so I'll stop here.

By posting my process for estimating the purchase/sale price of domains, I feel this is kind of like a magician showing you how the trick is done. So, I ask that you respect my content and do not copy and post it anywhere. Of course you can link to it though :-)