There are numerous reasons why you might need a domain appraisal but there is no need in getting one if you don't really need to. Each situation is unique in why you might want to get a domain name appraisal but lets focus on the 4 most common reasons.
Selling a Domain:
If you want to sell your domain then getting an appraisal may very well make sense. Commonly people will either set no price or will set a price so high that it is completely ridiculous. Sellers are so afraid they may sell it for less than what it could possibly sell for that they scare off the buyers. This keeps them from setting a price that will at least be reasonable enough to spark a possible buyers interest to start a bidding point.
If you are very knowledgeable in domain sales then it is likely you won't need to get an appraisal as you will have a rough idea as to what it may sell for. On the other hand if selling and buying domains is not something you do on a regular basis it can be wise to get an appraisal from a respected domain appraisal company. The domain appraisal can give you an idea as to what you can expect the domain may sell for and allow you to set a starting price accordingly.
Buying a Domain:
First you have to decide what that domain is worth to you. Unless you are speculating and hope to sell the domain later at a higher price you must first consider the value of the domain for your purpose. No doubt it can also be wise to get an appraisal so you have an idea as to what it may sell for in the open market. The domain appraisal can also be used as leverage in bargaining with the seller.
When trying value your assets such as the value of your company or website it is important to remember that the domain name can also hold great value. A domain appraisal can help you in figuring out how much that asset is worth with out having to put it up for sale.
If you donate a domain to a non-profit organization it may be possible to get a tax deduction. Getting a domain appraisal from a qualified appraisal company will help you get that tax deduction. In the USA this is fairly easy if the deduction is of less than $5,000 but can be a bit more complex if it is above that amount.
Always remember that a domain name appraisal from anyone whether a paid professional or your average Joe is only an educated guess. Keep in mind how educated that guess may be however. A domain as with anything else is only worth what some one is willing to pay for it.
Ryan helps you understand the possible need for a domain name appraisal and if you even need a domain appraisal .