Have You Heard? Domain Escrow Is Your Best Bet to Protect Your Domain Transaction
Domain Escrow is a financial agreement where an escrow service company takes possession of the domain and controls payment from the buyer. Legit Escrow companies are licensed and regulated. The escrow company helps by making the domain transaction safe and secure with all funds put in an escrow account. The funds are released to the seller when both buyer and seller have met all terms of the arrangement.
A good portion of domain buyers and sellers are trustworthy and for the most part, buying your domain from the seller is legit. On the other hand, when you are dealing with a person for the first time, using a third party escrow service to help facilitate the transaction is the best option to protect both buyer and seller until the domain transaction is complete.
Both buyer and seller can disregard certain questions, such as should I wait for the buyer to pay me first before I transfer the domain? Or should I release the domain to the buyer and wait for my funds?
This predicament is common for buying or selling domains and can be conveniently facilitated by an escrow service company. Therefore, for best practice it is always wise to use a service to help protect you the buyer or seller to prevent any misunderstandings when handling your domain name transactions.
In any case, it is crucial to protect your domain just like you would protect any physical property that you own.
Before you decide to use a domain escrow service, it is your responsibility to do your due diligence to see if the service is in good standing with customers, business practices and other essential criteria that you generally use to handle any business transactions.
Six Questions to Ask When Selecting a Domain Name Escrow Service
A. Does the URL begin with “https://“
B. Have you looked online for customer reviews about the escrow service.
C. Look up the owner of the escrow web address to confirm that they are the owner of the escrow service.
D. Do they offer dispute resolution services to facilitate any issues between you the buyer or seller?
E. Do they have cutting-edge firewalls and 128-bit minimum data encryption?
F. Do they use credit and debit cards which are money transfer options?
Both buyer and seller will set up a domain escrow account with the escrow service company. Both parties should familiarize themselves with the escrow service company process. The buyer or seller can initiate escrow. Escrow services are pretty much straightforward and have the same process in general.
Both buyer and seller will fill out an online form in which the terms of the deal are summarized. Information like the price, the content of the website, secondary names, trademarks, the domain name, services to be delivered, and length of inspection for the domain or site are included in the agreement. Length of inspection is generally between 1 to 10 days (3-day inspection is recommended) in that period the buyer will either accept or reject the domain.
Once the contract is complete, it is sent to both buyer and seller to review and approve.
If both parties agree upon the contract, the buyer remits payment of agreed upon price of the domain or website to the escrow service company. The buyer will use either credit card, wire transfer or PayPal as the common payment method.
The Escrow Service Will Do the Following:
Escrow confirms that payment has been sent and that it is authentic, then they inform the seller by email that the escrow account has been paid. Escrow will let the seller know that they can transfer the domain to the buyer's domain registrar account. If both buyer and seller are registered at the same registrar, then the seller can push the domain to the buyer's account. Pushing a domain is almost instant and not as time-consuming as transferring a domain.
The buyer has to inspect the domain in the prearranged time frame, they then let escrow know that they have in fact received the domain name. The escrow service will confirm that the WHOIS information has been changed to the buyer's profile. Escrow remits payment to the seller minus any fees. The buyer or seller can decide who pays the fee they can do an escrow fee split.
Domain Escrow Fee Schedule
Source: Payoneer Escrow.com
Sample Escrow Instructions Breakdown:
Registration - Start a New Transaction
Select Domain Name as your Type of Transaction
Your Role: You will select either Seller or Buyer
You will select New Domain Name Transaction in this step.
Transaction Title: (This is a short title that will appear in the subject line regarding the transaction).
You need to provide your email address.
Who Will Pay the Escrow Fee: Buyer, Seller or 50/50 split?
Length of transaction period(1 to 10 days, 3 day inspection is recommended).
You will provide the domain name that you are buying or selling and the price for the domain?
The seller will review and agree to the terms of the transaction.
After the seller reviews the terms an email is sent to the buyer stating that the seller and buyer have both agreed to the terms of the transaction and the buyer is asked to submit payment for the domain name.
Buyer logs into their escrow account select the payment method, submits payment.
An email from escrow is sent to the buyer stating that they have verified the payment and the seller has been notified to transfer the domain.
After the seller transfers the domain, an email is sent to the buyer stating that the domain has been transferred to the buyer.
You will log into your registrar to confirm the transfer is complete. Then you will go to your escrow account and indicate that you received the domain.
You will then inspect the domain, and after inspection, you will either ‘accept’ or ‘reject’ the domain.
If all goes well, you will accept the domain. After you accept the domain, your transfer is complete.
You will receive an email from your escrow service stating that you the buyer has accepted the domain and have authorized the release of payment to the seller.
Reasons Why Both Buyer and Seller Should Use Escrow to Handle Their Transaction
Escrow Process for Buyers:
Peace of mind, safe and secure transaction process.
Guaranteed domain transfer preceding payment from the buyer.
The domain escrow service will assure the domain ownership reflects the buyer with the registrar before the seller is released any payment.
Wire transfer is acceptable along with paying by credit card, check, money order or PayPal.
Able to correspond with Customer Service via email, telephone or instant chat.
Escrow Process for Seller:
Payment is verified before domain name transfer.
Peace of mind knowing that the escrow process is securely handled.
Once the transfer specifications have been met, escrow will securely release payment.
Safeguard from chargebacks, no funds or fraudulent credit cards.
Credit Card, Wire transfer, check, PayPal or money order all acceptable.
What are your thoughts about domain escrow services or any experiences that you've had with dealing with third party services to help facilitate your buying or selling of domains?