If you ever buy or sell a web site then it is vital that you are aware of the difference between personal and actual value.

Put simply, personal value is a value that is only valid to the existing site owner. Actual value is value that is valuable to any owner.

Recently I was contacted by a site seller who had a football sites for sale. I made a reasonable offer for the site and he got angry and said “I paid $3,000 for the sites design, so please add $3,000 to your valuation”

Here is my reply:

“Thanks for the update. Please note that if I bought the site the first thing I would do would be to delete the theme”

This is a perfect example of personal value vs actual value. The site design cost $3,000 so the seller was expecting to recover that cost, but the site design was awful! so it was completely worthless to me.

Another example of this was when a friend of mine was in negotiation for a site and the seller said that he had spent 18 hours per day on the site.

How much time has been spent is also irrelevant! many web site owners waste many hours every day doing things that do not benefit the site. There are automated sites such as popurls.com that probably require almost no maintenance that are worth huge amounts of money. But there are also niche forums that require tons of daily work that make zero profit.

Lets presume I was to try and sell you a Polaroid photo of me when I was three years old. My guess is that my value of the photo would be a lot more than your value of the photo.

Conclusion

Sellers: Please only mention factors that are going to be useful to the new owner.
Buyers: Be wary of a site seller that uses personal value factors to increase the value of the site.

From Dean Hunt