Whether you’re buying a new domain, selling your old one, or just curious about the value of a domain, a domain appraisal should be the first step. A professional domain appraisal determines the worth of a domain based on your name’s metrics and the sales of similar domains.
There are many factors that determine a domain name’s worth. The first is the domain name extension, with higher values going to .com sites. The number of words and letters, how pronounceable the domain is, plus the inclusion of numbers or hyphens determine the value. The simpler, shorter websites are typically worth more. Search results and traffic rank also influence the appraisal, including estimated daily unique view. These are evaluated using Alexa page rankings, Google PageRank, and search engine page results from Bing, Google, Yahoo, and more. The domain age is also evaluated, because it is an important SEO factor for search engines rankings. New domains can be a red flag to search engines, as they are often used by spammers. Each of these factors are considered by a professional, who determines the domain’s value.
A domain appraisal is necessary whether you are buying or selling a domain, for tax purposes, or just for determining your net worth.
Domain appraisals can help you save money when buying a domain. Knowing a domain’s value gives you more control during the buying process and allow for better negotiation. A professional appraisal is the best way to ensure that you are buying it for the right amount.
For the same reasons, getting a valuation of your domain before selling it will help maximize profits during the sale. Don’t underestimate your site’s value, and then regret it down the road.
During tax time, an appraisal needs to be done because according to the IRS domain names are considered an asset and thus can positively impact your tax return. The IRS requires sites to be appraised by a reputable independent domain appraisal company, so do your research.
Knowing the value of your domain can be helpful for a variety of other reasons. When applying for a loan, valuing your business, or evaluating your net worth, the value of your domain is an important part of an accurate asset valuation. If it’s been a while since your last appraisal, check in to see how your domain is progressing.
DomainTrade provides appraisals for domain owners (and buyers). Contact us to learn more.