How Overpriced (Digital) Real Estate Helps Your Competitors

There is a saying in real estate, “An overpriced home will help the other homes around you sell.” Most people have heard of domain names referred to as digital real estate, and that message holds true for domain pricing as well. My friend, Roman Edmond has shared this sentiment quite often. I want to share a little story about how this played out in the real world for me a few days ago.

I was looking to buy another domain name… No surprise there. This one was specifically to launch a website of my own. I did some research and found that the optimal (exact match) domains were already taken, which was not a surprise either. On a whim, I decided to message one of the domain owners through their landing page. They responded pretty quickly and told me that they were looking for a minimum offer of $60,000 because they had a project for that website. I’ve been there myself… When you have a domain that you think you are going to build out, it has far more “value” to you than what the real-world market would pay. They said they would also accept a trade of a domain that had a value of $100,000 or more. Keep in mind this was a pretty long, domain name – five syllables, and 17 characters. I replied thanking them and letting them know that I saw several options between $10 and $5000 that I could pick up for my project. I also let them know that for some reason Epik was showing that they had acquired that domain just a few days prior for under $1000. I don’t know how accurate that is, but it was weird to see that info shared.

I continued my search, and I found another suitable name. It was only 10 characters long and had three syllables, which I already liked. The reality is, that it was priced to sell. As a point of reference, it was less than 30% of the GoDaddy value. Being a consummate negotiator, I made an offer of 20% of their asking price. I wasn’t trying to be a jerk, it just wasn’t the perfect domain and I fully expected a counteroffer, plus I was willing to let it go. They replied pretty quickly with a counter that was 50% of their asking price. I was OK to pay that, but for cash flow purposes, I asked if they could split that into five payments (don’t hate on me for being a good negotiator.) They kindly replied and said they would accept 5 payments at their full price, which was a good move on their part. I then countered with an offer that reduced their counteroffer by another 20%. They had been pretty active in terms of responding, and after not getting a quick reply, I thought that perhaps they weren’t going to budge and probably weren’t excited about letting it go for less money. After investing time negotiating, I decided that even if I didn’t use it, I could sell it for far more than what I was going to pay for it, so I responded and said “Hey, I will take your counteroffer”, and they immediately responded and closed the deal.

I shared more on the negotiation part than the story needed, but perhaps someone will find that interesting as well. The moral of the story is unless you have a one-word dot com domain name, or a highly valuable domain name, remember that people have options when they’re seeking to buy domain names. If you don’t need to sell, then heck, price all of your domain names at five or six figures and sit back and wait. But when you have someone interested in your domain name, and you’re looking to make a sale, just remember that overpricing your domains will often help your competitors sell their domains.

Kudos to the team at Dan.com on getting this one done in the middle of the night on a weekend. I started my negotiations at 8 pm on Saturday night and the domain was in my account by 7 am Sunday morning.

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