What is Domain Appraisal and How Does it Work?

Domains are valued on a variety of factors which helps in determining their worth. They are not particularly liquid assets but they can be of a lot of value. The types of domain names you buy or register will determine whether or not you make money on it.

Investing in a domain name is very similar to investing in real estate. If you already own a website or a set of website addresses, the way you develop your site or monetize your site will help find its worth. 

During your research in understanding domain appraisals, you may have come across many domains up for sale. These range from a few thousand to millions of dollars. There is an active market for domain names, for instance, back in 2019 Voice.com set an all-time record for a single domain name as it was sold for a massive $30 million.

If you own a handful of domain names, you too can make money off it if you are willing to sell any of them. Read on more to understand more on domain appraisals and how it works.

(Credit: Pixabay)

What is Domain Appraisal?

Even though there are several tools and factors that calculate the value of your domain, there is no correct answer. Most of the time it depends on the person on how much they want to sell or how what someone is willing to buy it for.

Domain names are completely unique and cannot be copied. Only one of each domain is available among the millions of websites in the digital realm. If someone is interested in purchasing your domain, the process of calculating the value of its worth is called domain appraisal or valuation.

Now, if you are someone who can notice domains that are undervalued in the market. As an investor, you can make the most out of it. Whether you are buying or selling your domain, the last you would want to do is undervalue your domain and lose money on selling it. These domain valuation tools can help you determine the worth of your domain. 

How to Appraise a Domain Name?

Here are a few factors that will help you evaluate your domain which can either make you a couple of thousand dollars or turn your investment into a significant amount of money.

  • TLD 

Your domain’s TLD or Top-Level Domain plays a huge role in attracting buyers. The most common TLDs you may have noticed in the .com which is the most attractive and valuable. 

  • Keywords

We know that keywords are one of the most components of SEO. So having a keyword in the domain itself is a huge boost in increasing the value of your domain. For example www.cars.com or www.realestate.com

(Credit: Pixabay)

  • Spelling 

Your domain becomes the identity of your website. If it isn’t attractive or pleasing to the eye, you have a higher chance of losing traffic. That’s why having the right spellings can build credibility and make you look professional. Although, some intentional incorrect spelling can be a benefit and turn them into lasting brands on the internet.

  • Brandability 

Speaking of brands, choosing domains that are easy to remember, clear, and unique can draw the attention of buyers. These catchy and definitive domain names can take special notice amongst buyers.

  • Popularity 

If your domain is currently used as a website, the level of traffic plays a crucial role in determining the worth of the domain. The reason is simple as this when you sell your domain, you are also selling the existing audience attached to the name which increases its worth automatically. 

  • SEO

If your domain has been active, optimizing it for SEO is an additional bonus. Web ranking is essential as it can boost the overall performance of your website. It is a great way to increase your domain’s worth and also make it more appealing.

(Credit: Pixabay)

  • Length 

Remember, shorter domains are easier to share as they are more memorable. If your domains are concise and one-of-a-kind, they will be more appealing to potential buyers. 

  • Age 

People usually opt for older domains as they are considered more valuable. Older domains mostly consist of the popular words that were registered first, hence it can impact your domain price. Plus, these domains have already existed and hosted by businesses, which can help increase your traffic levels as well.

Different Ways to Appraise your Domain Name 

When it comes to domain appraisal, these three approaches are most commonly used amongst people:

Appraise the name yourself 

As easy it may sound, it requires a lot of skill and hard work which will help you determine your domain’s value and worth. Some of these factors will help you appraise your domain yourself :

  • Understand the market 
  • Type of domain
  • Analyze domain authority 
  • Note down any past sales 

Professional Service 

These services are often based on years of experience as it can help you determine the worth of your domain for you. There different brokers available who can assist in appraising your domain although they will charge you the service they are offering. For example 

  • Sedo
  • Epik
  • Name Clerks

(Credit: Pixabay)

(Credit: Pixabay)

Free Tools

Now free tools may not be the best option for you but it can help you get an estimate of your domain name. Free tools will also provide information regarding your domain which you can use to present to a buyer during negotiation. For example 

  • GoDaddy Appraisal
  • Estibot Appraisal

Bottom Line 

When selling a domain name, ensure that you have done some self-research as it will help you understand the market. We now know that there are many factors that help establish your domain worth. Understanding your buyer and the reason behind it is an entirely different matter. But it can play a deciding factor in calculating the value of your domain. 

If you have the time and willing to go the extra mile, self-domain appraisals are the best option for you. You will have to do a lot of research to find the necessary information which can boost the value of your domain. If you are not able to, then you can focus on choosing a domain appraisal service that works best for you.

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