Unrealistic User Valued Domains

markb · Feb 3, 2011

mark said:
People who know me assumed it was me - enough people assumed that for me to make a comment here to confirm I'm not you, and you're not me

What does the "B" stand for out of interest, as your surname doesn't begin with a B?

The "B" is personal to myself, and no its not my surname. I have changed my avatar now. Hopefully some people should be able to tell us apart now.

Thanks
Mark

Bailey · Feb 3, 2011

richrf said:
I agree. Some domain buyers may want 10% annual return on their investment while others may be totally fine with 5%.
Rich

Thats a pretty unique perspective you have their richrf. domains are speculative , which is 90% of the attraction for those that believe they can operate in that environment.

richrf · Feb 4, 2011

wb said:
And many others including myself aim for way more than 10%

That is fine as long as you understand even the greatest business people have a difficult time achieving long term gains greater than 10%. If they do, there is usually some gimmick (also called a scam) a la Madoff.

richrf · Feb 4, 2011

Bailey said:
Thats a pretty unique perspective you have their richrf. domains are speculative , which is 90% of the attraction for those that believe they can operate in that environment.

Domain development, like land development, can be speculative (by definition a limited chance for success) or more predictable. The more predictable the lower returns. Every business model has its pros and cons and each individual can choose where on the spectrum they would like to be. The most successful people that I know are tortoises who just grind out their returns. However, I have known speculators who are (were) very successful. Some use methods that I wouldn't use. Others are dead from the stress.

websaway · Feb 4, 2011

markb said:
Hi All,

Just wondering if anyone else thought many domain owners (not domainers) have unrealistic values they have given their domains.

Im talking about some people who have registered their domain in the 90's and never got round to doing anything with it. I contacted a few recently with decent names and have offered them around £50K, only to be told that they have plans to develop (even though theyve owned them for 10+ years), but would sell for high xxx,xxxx or if they received an offer they couldnt refuse.

I know some UK domains have fetched good prices in the past 5 years, but I do think many people over value their own domains, which may end up with them losing out if they hold on to the domains too long.

Maybe part of the reason these people value their domains so much is probably because of the large number of domainers contacting them making them offers for their domains

Mark

The example you use of 50k is not related to anything specific, so difficult to be objective.

But lets say If you offered £1,000,000 for a house, you could well think look, I am offering you 1million pounds, this is a lot of money, but if the house is worth 3 million pounds the person is not going to sell, what your million pounds is to you ( or in your case 50k ) is a matter for you, the price the house seller or in this case the domain owner puts on their asset is a matter for them, If you can meet in the middle all well and good but domain owners like house sellers are prefering to hang on to their valuables until the right offer comes along or the time is right to do something else with them.
Also worth considering is the difference between house prices in a not so desirable part of a northern City and the house prices in a very desirable part of London, it's vast, some people can't get their head around that and likewise with domain names, some people just don't get it.

wb · Feb 4, 2011

websaway said:
If you offered £1,000,000 for a house, you could well think look, I am offering you 1million pounds, this is a lot of money, but if the house is worth 3 million pounds the person is not going to sell

Equally though the house, or domain in this case, may not be worth that much at all and the offer received may have been a realistic/good one which the domain owner will never receive again. Let's not forget the basics here. Things are only worth what the next person is willing to pay.

There aren't that many domains worth high five or six figures, and it's a shame to see some nice dormant domains which are overvalued and may never be used (shame for both buyers making realistic offers, and for sellers who could be losing out on thousands of pounds).

At the end of the day it all comes down to risk, most of us will have different opinions which is part of the fun.

markb · Feb 4, 2011

Thanks for all your comments, I think that what it all boils down to is that with a house or car, they are quite easy to value, as their are many similar ones out there, therefore a more accurate value can be placed on them, and the value usually comes from an expert in their field, i.e. an estate agent.

With most domain names, it is hard to put avalue on them, as they are all different, plus most valuations are made up by the domain owner and not usually experts in the field.

Obviously with anything that someone is trying to sell, as the seller you are going to try to get the most money for it, and as the buyer you want it as cheap as possible.

Mark

richrf · Feb 4, 2011

markb said:
Thanks for all your comments, I think that what it all boils down to is that with a house or car, they are quite easy to value, as their are many similar ones out there, therefore a more accurate value can be placed on them, and the value usually comes from an expert in their field, i.e. an estate agent.

With most domain names, it is hard to put avalue on them, as they are all different, plus most valuations are made up by the domain owner and not usually experts in the field.

Obviously with anything that someone is trying to sell, as the seller you are going to try to get the most money for it, and as the buyer you want it as cheap as possible.

Mark

I think it is less a function of experts making an appraisal and more a function of the fact that there is lack of information to make an appraisal with. Here in the U.S. most residential real estate is sold through the Multiple Listing Service (MLS) so price discovery is fairly easy. There are no similar clearinghouses when it comes to domains. So each person, including experts, have to come up with some set of variables that they will use to price a given domain.

I talked to many experts when attempting to price my premium domain (it is very high valued) and no one had a clue as to how to price it so they simply asked what did I want for it? I think that this will probably remain an issue for some time to come since their is no clear way to classify domains and track their history (something that the Case-Schiller Report does for home prices in the U.S.). So, it will remain more like selling jewelery (which is also subject all kinds of variables and shenanigans) than selling real estate.

websaway · Feb 4, 2011

wb said:
Equally though the house, or domain in this case, may not be worth that much at all and the offer received may have been a realistic/good one which the domain owner will never receive again. Let's not forget the basics here. Things are only worth what the next person is willing to pay.

There aren't that many domains worth high five or six figures, and it's a shame to see some nice dormant domains which are overvalued and may never be used (shame for both buyers making realistic offers, and for sellers who could be losing out on thousands of pounds).

At the end of the day it all comes down to risk, most of us will have different opinions which is part of the fun.

The chances are though that if he drops the price to 1 million pounds you would get killed in the rush, in turn pushing the price up.

Yes, your right there are not many domains in the high five or six figure bracket and that's why they are so precious, hence holding up values, and remember from a corporate perspective there is a lot of money that could be allocated to these names, and often the buyer forgets the massive market there is for a name, he sometimes thinks he's the only person interested in the name in the world. There are exceptions of course but the people with the best names normally know their market and the value of their names.

urbanvilla · Feb 6, 2011

It's simple really......It all depends on how much the seller needs the money depends on the price in my experience !

Bailey · Feb 8, 2011

websaway said:
and often the buyer forgets the massive market there is for a name, he sometimes thinks he's the only person interested in the name in the world. There are exceptions of course but the people with the best names normally know their market and the value of their names.

Nicely put.

No slur intended on those that operate their domain names in a stamp-collection fashion. forever swapping, buying at £15 here selling at $25 there. Reading some of the outright requests for "positive trader feedback" for mentioning an available unregistered domain - tells you there is a bit of "facebook" friend collecting mentality - But Hey "what-ever floats your boat" .

I can't imagine for one minute that those that have delt successfully with domains for any length of time aren't extremely grateful for the opportunity or have any great motivation to plaster their story all over the net either.

And those that are doing ok - it still can be an ongoing learning exercise. Thats the whole point in any type of enterprise, If it were that simple everyone and their mother would be at it, but it isin't and they aren't.

The real tragedy in domains and indeed development is those that don't learn from their mistakes or know how to attribute their successes. Some of the comments made you learn to identify with those that haven't been around for that long - Nothing wrong with that we all started somewhere. I just quietly laugh when they're presented as points of fact.

The individuals that consistently over-price their domains tend to be those that have gone with the wrong type of domain in the first place, ie their whole model is not substainable. Self delusion (at the outset) about why a domain has value or indeed where it's outlet is likely to be, is part of the learning curve. and should be in all our history at some point in time.