Welcome to WebmasterWorld steve_how!

A site has two values. An emotional value which is difficult to convert to dollars, and a financial value. If you are currently monetizing your site, 2 to 3 years of revenue would be a ballpark value for the sales price. If a broker contacted you multiple times, the buyer sees value in your site which may give you the chance to ask for a higher figure.

Escrow services are available on the net which allow smooth transfer of domains and sites.

Most buyers wan't to buy a site as-is without any alterations. The best way is to not just send them a ZIP file with the source files, but sell them the complete package of domain, site, database and hosting.

thanks lammert
are there specialist escrow services for websites or is it the same as buying house escrow etc
Steve

Yes, there are specialized escrow services for domain and website transactions. We are not allowed to give any specifics about those services here, but a Google search for "website domain escrow service" should give you some usable services.

thanks

Although it's common to value a website based on 2-3Xs annual revenue / income you have to ask yourself:

How reliable is that income? For a website that often requires that a seller or buyer answer "How sustainable is its traffic?" In other words, is the traffic based on variety and multitude of strong links that can be counted on to continue delivering traffic? IF the traffic-delivery metrics are strong (think sustainable SEO) then you have to ask yourself: IF I sell how readily will I be able to replace this income stream? Cash in hand is nice, especially in uncertain times, but annuities (steady income streams) are also very nice. You don't want to have burned through your sale proceeds in 2-3 years and then be stuck paying your bills out of savings. OTOH, if you are simply read to "retire" then taking the cash may make sense.

Other questions: How much might it cost for the buyer (or others) to build a competing website / online business?

IMHO, there are few hard and fast rules in the online property valuation space. Buyers / Sellers must look at a website's unique assets and unique value proposition. Weakness in either translates to formulaic valuations (1-3Xs revenue). Strengths - such as a valuable domain, trademarks, patents, copyrights (few copyright their copyrightable assets), high profiles links, low maintenance costs, etc - all argue for a higher value.

Also, timing is often "everything": What is of value in the online world today might turn into vaporware a year from now. IF there's a chance of a significant downturn in the value of your traffic then, once again, you need to temper expectations.

You may have an emotional buyer, i.e., a less than rational, hard driven number cruncher.

You MAY also have a buyer that simply wants to dig into your books, your numbers and methods. There are more than a few stories about "buyers" who never went on to buy . . after taking a deep plunge into an online business's info and data. NDA's have limited value in this world. Non-competes likewise. KNOW your buyer before you invite them deep into your business operations. An already well informed buyer may not need to more than agree on a price. Presumably your ostensible buyer IS already well informed and that is why he/she keeps coming back.

Lastly, if/when you are ready to do a deal get a business lawyer involved IF it's anything less than a cash-fast deal. Ge the money paid into escrow before transferring any of the "keys to the business". Lock things down in advance. There are few things you can "promise" about Web-based traffic so be careful to not over promise or over state what is being sold.

Escrow.com may provide the necessary services OR you might use a lawyer, such as John Berryhill, Esq. or one of his peers, to serve as escrow and to draw up the necessary documents. A lawyer who has acted in this role may be a bit more expensive on an hourly basis (due to their experience) BUT less expensive in terms of total / final cost BECAUSE they don't have to "re-invent the wheel", that is, they can pull from past transactions various documents that have proven to works / get the job (sale) done right.

Good luck.

thanks so much webwork

I suspect I am more an emotional seller ( who is worried that the baby he created from scratch 15 years ago will turn into an advertising billboard with a new owner ) rather than the buyer who appears to own 50 or more web properties

As far as x times current revenue that seems to be the norm this buyer is offering a significant premium over current revenue , ( site is not well monetized with over half the most popular pages having no monetarization at all ) and those that do very very light touch advertising

I also thank you for Business Lawyer advise as I had not even thought about legal protection

I have had any number of contacts re: selling the site and always closed down without going further but this broker / buyer gave me a firm offer last November which was extremely generous when taking into account revenue which I turned down, but broker has come back again asking me to at least talk with buyer

The site is very low maintenance with hundreds of links from around the net and I suspect a new owner with time and effort could double or treble the traffic with some TLC and updated design and increase revenue significantly

I wonder if some webmasters that have sold sites lived to regret decision as there are other factors in life than just money

Thanks again for guidance and things to think about

Steve

Exciting times! Having someone interested enough in your website to put forward a firm offer, is a great achievement. Well done, regardless of whether you end up taking their offer or not. You've done something that many work towards and few achieve!

I've sold several websites over the past 15 years and I've not regretted selling a single one... even the first one, my 'baby'. Ultimately the cash has enabled me to move on to other projects, which suits my personality type perfectly.