Has someone approached you about buying a domain name that you own? This happened to several colleagues recently, so I thought I would pass along some of the advice that I gave them.
If you are on the receiving end of a serious offer to buy your domain name, I strongly recommend that you get a professional appraisal of the fair market value of the domain name so as to avoid selling it for significantly less than what it’s worth. The fees for a professional domain name appraisal are usually in the $20-50 range.
Here are some recommended domain name appraisal services:
There are a number of other appraisal services out there, including a bunch of automated services that offer free domain name appraisals, however in my experience the most reliable appraisals are done by a real live human evaluator working for a company that has a lot of experience selling domain names. That’s not the case with the automated appraisal solutions, which is why the appraisals by the automated tools are often notoriously inaccurate.
Speaking of appraisals, beware of a scam that has been making the rounds whereby a supposedly interested ‘buyer’ with lots of money to spend insists that you use an appraisal service they recommend in order to close the deal. The ‘buyer’ is not really interested in your name; he is hoping to trick you into purchasing an appraisal from a bogus appraisal service (which he secretly owns). Once you have paid for your appraisal, the ‘buyer’ mysteriously loses interest in your domain name. Ouch!
Of course, when it comes to domain names, "fair market value" is rather subjective and will fluctuate over time. On the one hand, it’s not uncommon for people to sell domain names for a few hundred dollars and think they got a lot of money when in fact the domain was worth thousands or even tens of thousands. On the other hand, most domain names aren’t even worth $10, yet delusional owners hang on to these "valuable" domains for years hoping to cash in by selling them one day. Sorry to burst your balloon, but that’s just not going to happen.
An appraisal by a reputable company will provide you with a reality check, but don’t base your decision to sell the domain name solely on the appraisal. Also consider how likely it is that another buyer might come along in the future wanting to buy your domain name. (Have you gotten offers on this domain name in the past? If so, you will likely get offers in the future as well. A really good name appeals to lots of potential buyers.) Sometimes, however, there is only one ‘ideal’ buyer for a domain name, and if you think they’ve finally found you and your domain name, then now’s the time to sell.
If you decide to sell and agree on a price for the domain name, I recommend that you use an escrow service for the financial transaction. Escrow services act as intermediaries between a buyer and seller, and they help to ensure that the seller (you) gets paid and the buyer get the domain. Escrow services charge a small fee (usually a percentage of the sale price) for the valuable role that they play.
If you are selling a domain name to a buyer that you do not know personally (which is the typical scenario) and the transaction is for more than $200, I suggest using an escrow service to give you piece of mind.
Here are some recommended domain name escrow services:
Another approach is for the buyer and seller to sign a Domain Name Purchase Agreement, however this usually involves lawyers and the costs for this can quickly add up.
Good luck with your domain name sale!