What to offer/pay for a domain name?

[Lazar Hausman]

I'm interested in purchasing a domain name that is already owned.  I want to attach it to future marketing campaigns (mainly direct mail). I have a domain already - www.hhbsa.com - but this domain name is more industry specific (webuyhouses type) and is easier to remember.  I found the owner within a few minutes and he said he'd be willing to sell it.  We spoke very briefly and he called me the next day to see if I had given any thought about making an offer.  I could not get a number out of him, so I'm going to have to offer first.  I have never done this before and I have no idea what to offer him.  Of course, this depends on a number of factors - but mainly, what it's worth to me and what it's worth to him.  The analysis is below.

When I type the domain name in, it re-directs to this gentleman's realty website (i.e. he is not actually "using" the domain name). He is not in the investment side of the business - it appears he is trying to attract retail buyers and sellers. He is an older guy, at or near retirement age and he appears to be a one man operation or mom and pop office at largest. I looked in the MLS - in the last year the office has sold 1 listed property, has 1 active listing, and represented buyers on 2 purchases. All of these transactions were in his name. He doesn't seem to do a whole lot of business; and since he is at retirement age, I don't imagine he has any future plans with the domain.

Given that info, I don't think the domain name is worth that much to his business.  But he may not think that.  When I talked to him the second day, I could tell he knows it is worth something - I'm just not sure what. 

So what is it worth to me?  I really want to get it for $1000-$1500, but at $2500 I would still be happy.  I see the value of having this domain long-term, so I will go up to $5000, but I will not be very please paying that much at this time.

I'm not sure where to start with an offer on this guy.  I don't want to insult him or have him think negotiations are pointless if I offer too little - like $200 - but I don't want to pay more than I need to either.  We're all here because we like to make good deals right?  :-)

Thoughts?  Thanks Everyone!