Yeah, but you have to scale the projections for uncertainty about the future, and exaggeration by the seller.

In particular, if someone on the internet tells me they’re making $x a month from spammy ads on a squatted domain, I immediately discount the claim substantially due to bullshit. I increase the discount rate if the person making the claim is trying to sell me said domain.

True, but if the guy contacting you is the actual owner of the website you use to buy domains, his credibility increases enormously. He said this person was a customer on his platform. When that guy says "I have a website which is making 10k/year," and I already trust the domain platform he created because I use it as a customer, I believe him.

Projected revenues for this domain is at $100k this year!

How much are you trying to sell the domain for?

Uhh...about $100k.