It would be difficult to convince a buyer of the value if the website seller is going out of business.

I would think it would be based on proven income generated by the site. Not all leads are equal -- if the site is producing low quality leads that lead nowhere, then the site would not prove much value.

If the owner is getting quality leads but just doesn't know how to turn the leads into business, then it would be difficult to convince someone your site has value but you are just not successful in turning the leads.

The buyer would be suspicious.

If you have a website that is producing verifiable sales and you are retiring from real estate, then you could convince a buyer of its worth.

I would say at least a years production amount. Say, the website is producing $40,000 in a commission a year -- I would say it is worth that, at least half that much, say $20,000.

Good question.

Valuing an existing website is exceedingly difficult.

Mike makes a great point. How does the discussion go?

"I've got this *great* real estate web site. I'm not making enough to feed my family with it though. Want to buy it?"

Many retiring agents have sold websites, contact databases, etc. Retiring is one thing. Getting out because you can't make enough money is completely different. If the website was that good of a valid lead generator, why would the agent need to get out?

That said, there are a LOT of agents out there with zero clue about websites other than they know they want one. It wouldn't be that difficult to convince one of them to buy it. If the agent with the site had no ethics and didn't care if they ripped someone off, then they could probably do just that. But anyone with a lick of common sense would have to question the true value.

I have someone I'm watching to see if she leaves the business.  I will offer her money for her site.  Certainly nowhere near the amounts mentioned above, that's for sure but I would pay her $3k for it. (I would start at 1K).  Would she do it?  No clue.  

I mentioned this to someone else and was asked "why would you do something like that?".   I didn't explain.  The person asking had no clue what it took for the website to get where it is, why it's there, why the income isn't being cultivated as much as it could be.  I know all those things.  I also know what it costs to get there.  But, to give someone $20K or something of that nature?  Heck no.  It would cost me a heck of a lot less to build another one and get it up there.  

I will ask the op this though... if you are thinking of doing this, then why don't you just keep the thing running and refer out the leads you are getting from there?   You don't have to pay mls dues, just keep your license active to collect referral fees.  Might be a nice little side income to you.  Or...if it's not you but someone you know, why don't you make him a deal...keep your license active and let me work the site for a referral fee?

That is a great question. I'm going to include it in my next brokerage management class.  Valuing the website is a lot like valuing a real estate office.  I would take a real good look at the agent selling the website.  We have all meet agents that couldn't sale an open house if the clients told the sales agent they wanted to buy it.  It is probably the agent that is of no value not the site.

Dennis Jonas

www.83616.com

It's Your Zipcode, It's Your Neighborhood.

The agent might not have necessarily been leaving the business due to failure in it!

An agent I know who had a good career in CA came here, had a good career and then fell in love with HI and went there where she has -- you guessed it! :)

She sold her site to another agent in her office and that site is still going strong. That agent is too.

It was for sale for 10k--I don't know what the other purchased it for.

When you consider it, selling a site is like selling an office--the value is in the reputation, client list and future business that can be generated from it.

Russell,

I have been offering my services to all of the Realtors in my area that are getting out of the business.  When agents get out of the business, most of them will need an agent to take care of their past clients.  Why not be pro-active and prospect them and offer a referral fee to them if they send their prospects to me?

I have 5 ex-realtors signed up with referral agreements & with the mass exodus of agents in Michigan, I am expecting to get more agents signed up.

My broker always says that the difference between good and great is just a little edge.

Rob

Boy, you got that right, Rob.

The difference between water that boils and water that does not is just one degree.

Are we making any distinction here between "website" and "domain name". Buying a "website" would of course include the domain name, but I know a few domain names I'd like to have with or without the current website content and some domain names I'd like might not be from my area. Do you see what I am saying?

If you are trying to sell your website without much luck and you have a great domain name, the domain name may be worth more than the site. The domain name may even have market value outside the real estate industry. Example, if you own your zip code as a domain name there may be a company outside real estate that would pay more for that than a real estate agent.

I was contemplating a move last spring and wrote a blog about selling my site.  You guys gave excellent advice and broke it down to raw numbers.  

In theory - one out of every 40 ppl signed up will convert to a sale.  If that sale is worth $4000 min. you would receive a 25% referral from that $4k - that is what it is worth.

ex. - 400 ppl = 10 sales = $40k = $10k in referrals

The sites value directly correlates to how many ppl are signed in, on drips and how recent the contacts were made.

The domian value is different - in my humble opinion - and can be valued only by its ranking, its unique visitors and your ability (or inability) to make your present domain name perform as well.  Unless you are buying a HUGE name I don't see much value.  The value is in the contacts.

Also, if the current Realtors personality is similar to yours that would be a benefit.  There is usually something that drew those ppl to sign in with them rather than with you in the first place.

Great thread!!