Domain Escrow Services: Complete Security Guide 2025

Category: Domain Transactions & Security Tags: domain escrow, secure transactions, domain transfers, payment security Status: DRAFT

Why Domain Escrow is Essential

The Trust Problem in Domain Sales

When buying or selling domains between strangers, you face a fundamental trust problem: who goes first? If the buyer sends money first, what prevents the seller from disappearing without transferring the domain? If the seller transfers the domain first, what guarantees the buyer will pay?

Domain escrow solves this problem by acting as a trusted neutral third party that holds both the payment and the domain until all conditions are met.

The Cost of Not Using Escrow

Real fraud statistics:

• Domain scams cost buyers an estimated $15-20 million annually
• 1 in 50 private domain transactions involve attempted fraud
• Average loss per scam: $3,200
• Recovery rate for fraudulent transactions: less than 5%

Common scam scenarios without escrow:

• The disappearing seller: Takes payment, never transfers domain
• The fake transfer: Shows fake registrar screenshots, keeps domain
• The reversal scam: Uses reversible payment method, gets domain then reverses payment
• The hijacked domain: Sells domain they don't actually own or control
• The bait and switch: Transfers different domain than agreed upon

Using escrow costs 3-10% in fees, but prevents 100% of these scams. It's the best insurance you can buy in domain transactions.

When Escrow is Absolutely Required

Always use escrow for:

• Any transaction over $500
• Transactions with unknown parties
• International transactions
• High-value premium domains
• Portfolio sales involving multiple domains
• Any transaction where payment method is reversible

Escrow is optional but recommended for:

• Transactions $100-$500 with verified buyers/sellers
• Repeat transactions with trusted parties
• Sales within established marketplaces with buyer protection

Escrow may not be necessary for:

• Transactions under $100 between verified parties
• Sales through fully-managed marketplaces (Dan.com, Afternic) that handle escrow automatically
• Internal portfolio transfers between your own accounts

Major Domain Escrow Providers

Escrow.com (Industry Standard)

Overview:

• Founded in 1999, owned by Freelancer.com
• Handles over $3 billion in transactions annually
• Licensed and regulated in all 50 US states
• 90+ currencies supported
• Trusted by GoDaddy, Namecheap, and major registrars

Pricing structure:

Transaction Value	Buyer Fee	Seller Fee
$100 - $5,000	3.25%	3.25%
$5,000 - $25,000	2.5% (min $162.50)	2.5%
$25,000+	Negotiable	Negotiable

Key features:

• Domain-specific transaction flows
• Push transfer support for major registrars
• Multiple payment methods (wire, credit card, ACH, cryptocurrency)
• Dispute resolution process
• Mobile app for transaction monitoring
• API for automation

Typical timeline:

• Payment processing: 2-5 business days
• Domain inspection period: 1-5 days (configurable)
• Domain transfer: 5-10 days (depending on TLD)
• Total process: 8-20 days average

Pros:

• Most trusted and established provider
• Comprehensive fraud protection
• Excellent dispute resolution
• Supports complex multi-domain transactions
• Integration with major domain marketplaces

Cons:

• Higher fees than competitors
• Slower process than modern alternatives
• Less user-friendly interface
• Wire transfer fees add to costs
• Customer service can be slow during disputes

Best for:

• High-value transactions ($10,000+)
• Portfolio sales
• International transactions
• Transactions requiring maximum security
• Deals involving legal agreements

Dan.com Escrow (Built-in Platform)

Overview:

• Integrated escrow within Dan.com marketplace
• Launched 2017, handles $100+ million annually
• Automated domain transfer process
• Modern, streamlined user experience
• Popular among domainers for speed

Pricing structure:

• Buyer commission: 9% (or seller pays 15%)
• Minimum transaction: $30
• No additional escrow fees
• All fees bundled into commission

Key features:

• Instant payment via credit card, PayPal, bank transfer
• Automated domain transfer (no manual PUSH needed)
• Fast track transfers (often complete in 24-48 hours)
• Buy Now or Make Offer options
• Built-in payment plans (installments)
• Automatic renewal protection during transfer

Typical timeline:

• Payment processing: Instant to 24 hours
• Domain transfer: 1-5 days (automated)
• Total process: 2-7 days average

Pros:

• Fastest escrow process in the industry
• Modern, user-friendly interface
• Automated transfer reduces human error
• Excellent for quick sales
• Built-in payment plan options
• Great customer support

Cons:

• Higher commission rates (9% buyer, 15% seller)
• Limited to domains listed on Dan.com
• Less suitable for very high-value domains
• Fewer payment options than Escrow.com
• No support for complex contract terms

Best for:

• Quick sales under $50,000
• Domains already listed on Dan.com
• Buyers wanting payment plans
• Sellers prioritizing speed over fees
• Modern, tech-savvy users

Sedo Escrow (Marketplace Integrated)

Overview:

• Built into Sedo marketplace
• European-based (Cologne, Germany)
• Handles $100+ million in domain sales annually
• Strong in European and international markets
• Multilingual support (10+ languages)

Pricing structure:

• Buyer commission: 10% (minimum $60)
• Seller commission: 10% (minimum $60)
• Or seller pays both sides: 20%
• Premium listing fees: additional $99-$999

Key features:

• Auction and fixed-price listings
• Broker service integration
• Transfer service handles technical details
• Multi-currency support
• International wire transfers
• VAT handling for EU transactions

Typical timeline:

• Payment processing: 3-7 business days
• Domain transfer: 5-14 days
• Total process: 8-21 days average

Pros:

• Strong international presence
• Excellent for European transactions
• Broker service for high-value sales
• Large buyer audience
• Good language support

Cons:

• High commission rates (10% each side)
• Slower process than Dan.com
• Interface less modern
• Customer service quality varies
• Premium listing fees add up

Best for:

• European sellers and buyers
• International transactions
• High-traffic premium domains
• Sellers wanting broker assistance
• Multilingual transactions

Afternic (GoDaddy Integrated)

Overview:

• Owned by GoDaddy since 2013
• Distribution network of 100+ registrar partners
• Fast Transfer service for quick transactions
• Integrated with GoDaddy Auctions
• Large buyer network

Pricing structure:

• Commission: 15% (minimum $15)
• Fast Transfer: 20% commission
• Network sales: 20% commission split with partner registrar
• Domain acquisition service: 20% commission

Key features:

• Fast Transfer (24-hour completion for qualified domains)
• Distribution to 100+ partner websites
• GoDaddy Auction integration
• Automatic offer forwarding
• Payment plans available
• Domain acquisition team

Typical timeline:

• Fast Transfer: 24-48 hours
• Standard Transfer: 5-10 days
• Network sales: 5-14 days

Pros:

• Massive distribution network
• Fast Transfer is industry-leading speed
• GoDaddy integration and trust
• Good for .com premium domains
• Large buyer pool

Cons:

• High commission rates (15-20%)
• Best features limited to GoDaddy domains
• Fast Transfer limited to .com/.net/.org at certain registrars
• Less control over transaction
• Customer service routed through GoDaddy

Best for:

• Domains registered at GoDaddy
• Premium .com domains
• Sellers wanting maximum exposure
• Sellers prioritizing speed
• Integration with existing GoDaddy portfolio

Atom.com (Modern Alternative)

Overview:

• Launched 2020, modern escrow platform
• Lower fees than traditional providers
• Focus on user experience and speed
• Growing adoption among domainers
• Cryptocurrency payment options

Pricing structure:

• Flat 5% fee (buyer or seller pays)
• Or split: 2.5% buyer, 2.5% seller
• Minimum fee: $25
• Cryptocurrency: 3% fee

Key features:

• Modern, mobile-first interface
• Cryptocurrency payment support
• Fast processing (2-5 days typical)
• Automated domain verification
• Simple pricing structure
• API for integration

Typical timeline:

• Payment processing: 1-3 days
• Domain transfer: 3-7 days
• Total process: 4-10 days average

Pros:

• Lower fees than competitors
• Modern user experience
• Cryptocurrency support
• Fast processing
• Simple, transparent pricing

Cons:

• Newer company, less track record
• Smaller transaction volume
• Limited dispute resolution history
• Not universally accepted yet
• Fewer payment options than Escrow.com

Best for:

• Mid-range transactions ($1,000-$25,000)
• Cryptocurrency transactions
• Tech-savvy users
• Cost-conscious sellers
• Quick, simple sales

The Domain Escrow Process Step-by-Step

Phase 1: Initiation (Day 0-1)

Step 1: Agreement on terms Before starting escrow, buyer and seller should agree on:

• Final purchase price
• Who pays escrow fees (buyer, seller, or split)
• Which escrow service to use
• Inspection period length (if any)
• Payment method
• Any special conditions

Step 2: Initiate transaction Either party can start the escrow:

• Log into escrow service
• Enter domain name and purchase price
• Enter counterparty's email address
• Specify terms and conditions
• Submit escrow request

Step 3: Accept escrow terms The other party receives notification:

• Review transaction details
• Verify domain name, price, and terms
• Accept or negotiate changes
• Agree to escrow service terms

Example email from Escrow.com:

Subject: Escrow Transaction Started for example.com

Hello [Buyer Name],

[Seller Name] has initiated an escrow transaction for the domain example.com.

Transaction Details:
- Domain: example.com
- Purchase Price: $5,000
- Buyer Fee: $162.50 (3.25%)
- Seller Fee: $0 (seller paying both sides)
- Total Payment: $5,162.50

Please review and accept this transaction at:
[Link]

This transaction will expire if not accepted within 7 days.

Phase 2: Payment (Day 1-5)

Step 4: Buyer sends payment Once both parties accept:

• Buyer chooses payment method
• Wire transfer: 1-3 business days
• ACH: 2-5 business days
• Credit card: Instant (but higher fees)
• Cryptocurrency: 1-3 confirmations

Step 5: Escrow verifies payment Escrow service:

• Confirms payment received
• Verifies amount matches agreed price
• Notifies seller payment is secured
• Instructs seller to begin domain transfer

Important: The seller should NOT begin transfer until escrow confirms payment is secured.

Phase 3: Domain Transfer (Day 5-15)

Step 6: Seller unlocks domain At current registrar:

• Log into registrar account
• Remove domain lock (if applicable)
• Obtain authorization code (EPP code) for TLD that requires it
• Verify contact information is correct

Step 7: Seller initiates transfer Two main transfer methods:

Method A: Push Transfer (faster, recommended)

• Transfer domain to escrow's registrar account
• No authorization code needed
• Completes in minutes to hours
• Supported by GoDaddy, Namecheap, Dynadot, and others

Method B: Standard Transfer (traditional)

• Provide authorization code to buyer
• Buyer initiates transfer at their registrar
• Transfer takes 5-7 days to complete
• Required for some TLDs and registrars

Step 8: Escrow verifies transfer Escrow service checks:

• Domain transferred to buyer's account
• Domain active and unlocked
• WHOIS shows correct new owner
• No outstanding disputes

Phase 4: Inspection Period (Day 15-20, optional)

Step 9: Buyer inspection If inspection period was agreed upon:

• Buyer verifies domain functions correctly
• Checks domain history, backlinks, traffic (if claimed)
• Ensures domain matches description
• Can reject if material discrepancies found

Typical inspection period: 1-5 days

Grounds for rejection:

• Domain not as described
• Undisclosed trademark issues
• Traffic/revenue claims were false
• Domain has penalty or ban history
• Technical issues with domain

Not valid grounds for rejection:

• Changed mind about purchase
• Found better domain
• Can't afford domain
• General buyer's remorse

Phase 5: Completion (Day 20-21)

Step 10: Funds released to seller Once inspection passes (or if no inspection period):

• Escrow releases funds to seller
• Seller chooses payout method:
  • Wire transfer: 1-3 business days
  • ACH: 2-5 business days
  • PayPal: 1-2 business days
  • Check: 5-10 business days

Step 11: Transaction complete Both parties receive:

• Confirmation email
• Receipt for tax purposes
• Transaction summary
• Rating/review request

Total typical timeline:

• Best case (Push transfer, no inspection): 3-7 days
• Average case: 10-14 days
• Complex case (international wire, standard transfer, inspection): 20-25 days

Choosing the Right Escrow Service

Decision Matrix

For transactions under $1,000:

• Best choice: Dan.com (if domain listed there) or Atom.com
• Reasoning: Lower fees, faster process, adequate protection
• Alternative: Escrow.com if other party insists

For transactions $1,000-$10,000:

• Best choice: Escrow.com or Dan.com
• Reasoning: Balance of security, cost, and speed
• Alternative: Sedo or Afternic if domain already listed there

For transactions $10,000-$50,000:

• Best choice: Escrow.com
• Reasoning: Maximum security, proven track record, dispute resolution
• Alternative: Dan.com for speed if both parties experienced

For transactions $50,000+:

• Best choice: Escrow.com with legal agreement
• Reasoning: Highest level of protection, supports complex terms
• Alternative: Sedo Broker Service for six-figure deals

For international transactions:

• Best choice: Escrow.com or Sedo
• Reasoning: Multi-currency support, international wire handling
• Alternative: Dan.com for speed if both parties accept limitations

For cryptocurrency payments:

• Best choice: Atom.com
• Reasoning: Native crypto support, lower fees
• Alternative: Escrow.com (also supports cryptocurrency)

Key Factors to Consider

1. Fee structure

• Who pays fees? (Buyer, seller, or split)
• Percentage vs. flat fees
• Minimum fee thresholds
• Additional fees (wire transfers, currency conversion)
• Total cost comparison

Example comparison for $5,000 transaction:

• Escrow.com: $162.50 (3.25%)
• Dan.com: $450 (9% buyer fee)
• Sedo: $500 (10% minimum $60 each side)
• Afternic: $750 (15%)
• Atom.com: $250 (5%)

2. Speed requirements

• Need quick sale? Choose Dan.com or Afternic Fast Transfer
• High-value sale? Accept Escrow.com's longer timeline for security
• Standard timeline acceptable? Most services work fine

3. Payment methods

• Credit card needed? Dan.com, Escrow.com
• Cryptocurrency? Atom.com, Escrow.com
• International wire? Escrow.com, Sedo
• PayPal? Dan.com, some others

4. Domain location

• Already listed on marketplace? Use their escrow
• At GoDaddy? Afternic Fast Transfer might be fastest
• Any registrar? Escrow.com most flexible

5. Trust and security level needed

• First time with this party? Use Escrow.com
• Established relationship? Faster alternatives okay
• Very high value? Don't compromise on security

Common Escrow Issues and Solutions

Issue 1: Slow Domain Transfer

Problem: Domain transfer taking longer than expected, holding up funds.

Common causes:

• Seller forgot to unlock domain or get auth code
• Domain within 60-day transfer lock period
• Incorrect authorization code provided
• Domain expired or suspended
• Registrar requiring additional verification

Solutions:

• Preventive: Unlock domain and obtain auth code BEFORE starting escrow
• Check: Verify domain is at least 60 days past last transfer/registration
• Communicate: Stay in contact with escrow service and provide updates
• Use Push: When possible, use push transfer instead of standard transfer
• Document: Keep records of all transfer attempts and communications

Pro tip: Before initiating escrow, use a transfer checker tool (many registrars offer this) to verify the domain can be transferred.

Issue 2: Payment Delays

Problem: Payment taking longer than expected to clear or process.

Common causes:

• International wire requiring additional bank verification
• ACH payment during weekend or holiday
• Credit card fraud prevention hold
• Incorrect bank account information
• Currency conversion delays

Solutions:

• Plan ahead: Initiate payment early in week, not before weekend
• Double-check: Verify all bank account details before sending
• Wire tracking: Get wire confirmation number from bank
• Alternative: Use credit card for instant payment (despite higher fees)
• Communication: Contact escrow service if payment not showing after expected timeframe

Typical clearing times:

• Domestic wire: 1-2 business days
• International wire: 3-5 business days
• ACH: 2-5 business days
• Credit card: Instant to 24 hours
• Cryptocurrency: 1-6 hours (depending on network)

Issue 3: Buyer-Seller Disputes

Problem: Disagreement about domain condition, value, or transfer.

Common dispute scenarios:

• Domain not as described: Traffic, revenue, or history claims were inaccurate
• Trademark issues: Buyer discovers potential trademark problems after purchase
• Technical problems: Domain has technical issues (banned from platforms, etc.)
• Website content: Included website/content not transferred or not as described
• Changed mind: Buyer or seller wants to cancel for personal reasons

Resolution process:

Step 1: Document everything

• Gather original listing/advertisement
• Screenshots of claims made
• Email communications
• Evidence of actual domain status
• Third-party verification (traffic stats, archive.org, etc.)

Step 2: Contact escrow service

• Submit formal dispute
• Provide all documentation
• Explain the specific issue
• Request specific resolution

Step 3: Escrow investigation Escrow service will:

• Review all evidence from both parties
• Verify domain status
• Check against original agreement terms
• Determine if seller materially misrepresented domain

Step 4: Resolution options Possible outcomes:

• Full refund: Domain returned, buyer gets money back
• Partial refund: Price reduction negotiated
• Proceed: Dispute deemed unfounded, sale proceeds
• Third-party arbitration: Complex cases may require arbitrator

Best practices to avoid disputes:

• Be completely honest in listing descriptions
• Provide evidence for all traffic/revenue claims
• Disclose any known issues upfront
• Use inspection period for due diligence
• Get agreements in writing before escrow

Issue 4: Domain Locked or In Dispute

Problem: Domain cannot be transferred because it's locked by registrar or in legal dispute.

Scenarios:

• UDRP (Uniform Domain-Name Dispute-Resolution Policy) proceeding active
• Domain suspended for abuse/spam
• Domain locked due to expired payment
• Court order preventing transfer
• Registrar account frozen/suspended

Solutions:

• Check status first: Always verify domain status before starting escrow
• Wait for resolution: If UDRP or legal issue, wait until resolved
• Resolve registrar issues: Pay any outstanding bills, resolve violations
• Document proof: Provide escrow service with proof of domain availability
• Cancel if necessary: If issue cannot be resolved, cancel escrow transaction

Prevention: Before listing domain for sale:

• Check domain status at registrar
• Verify no active disputes
• Confirm account in good standing
• Ensure no payment issues
• Review domain for policy violations

Issue 5: Wrong Domain Transferred

Problem: Seller transfers incorrect domain (typo, wrong extension, etc.).

Example scenarios:

• Sold example.com but transferred example.net
• Transferred examp1e.com instead of example.com (l vs 1)
• Transferred correct domain but to wrong account
• Transferred domain but kept it at their registrar by mistake

Solutions:

• Inspection period: This is exactly why inspection periods exist
• Immediate notification: Contact escrow service immediately
• Reverse transfer: Get incorrect domain transferred back
• Correct transfer: Transfer correct domain
• Document: Keep evidence of all communications

Prevention:

• Seller: Triple-check domain name before transferring
• Buyer: Verify domain immediately upon transfer
• Use copy-paste: Don't manually type domain names
• Buyer protection: Always request inspection period for valuable domains

Fees, Costs, and How to Save Money

Complete Fee Breakdown

Escrow service fees:

Provider	Buyer Fee	Seller Fee	Total Cost ($5K sale)
Escrow.com	3.25%	3.25% (or 0%)	$162.50-$325
Dan.com	9%	0% (or 15%)	$450-$750
Sedo	10%	10%	$1,000
Afternic	0%	15%	$750
Atom.com	5%	0% (or split)	$250

Additional fees to watch for:

Wire transfer fees:

• Sending bank: $15-$45 domestic, $35-$75 international
• Receiving bank: $10-$25
• Intermediary banks (international): $10-$40 each
• Total wire fees can add: $50-$150 to transaction

Credit card fees:

• Escrow.com: Additional 3.5% on credit card payments
• Dan.com: Credit card included in commission
• For $5,000 purchase: $175 in additional credit card fees at Escrow.com

Currency conversion fees:

• Bank conversion rate: 2-4% markup over spot rate
• Currency conversion fee: 1-3%
• Total for international: 3-7% in currency costs
• For $5,000 transaction: $150-$350 in conversion costs

Domain transfer fees:

• Transfer includes 1-year renewal: $8-$15 per domain
• Premium TLD transfers: $20-$100+
• Multiple domains: Multiply by number of domains

Total cost examples:

Scenario 1: Domestic $5,000 sale, Escrow.com, wire transfer

• Escrow fee: $162.50
• Wire send fee: $30
• Wire receive fee: $15
• Domain transfer renewal: $10
• Total: $217.50 (4.35%)

Scenario 2: International $5,000 sale, Escrow.com, wire

• Escrow fee: $162.50
• International wire send: $60
• Intermediary bank: $25
• Wire receive fee: $15
• Currency conversion: $200 (4%)
• Domain transfer renewal: $10
• Total: $472.50 (9.45%)

Scenario 3: Domestic $5,000 sale, Dan.com, credit card

• Dan.com commission (buyer paid): $450
• Credit card processing: Included
• Domain transfer: Automated, included
• Total: $450 (9%)

How to Minimize Escrow Costs

Strategy 1: Negotiate fee responsibility

Standard approach: Each party pays their own escrow fee Better approach: Negotiate who pays based on deal dynamics

If you're the seller:

• Offer to pay all escrow fees for clean, quick sale
• Build fees into asking price
• Attracts more buyers (they pay less)
• Speeds up decision-making

If you're the buyer:

• Request seller pay fees as negotiation tactic
• Especially effective with motivated sellers
• Common on higher-value domains
• Can be trade-off for faster payment

Example negotiation:

Buyer: "I'm interested in example.com at $5,000, but with escrow fees
       and transfer costs, my total investment is $5,650. Would you
       accept $5,000 all-in if you cover the escrow fees?"

Seller: "I can do that. I'll cover the escrow fees. You pay $5,000
        total, I'll receive $4,837.50 after fees."

Both parties feel they got a deal, transaction moves forward.

Strategy 2: Choose cost-effective escrow for transaction size

Don't overpay for security you don't need:

• $500 domain: Don't use Sedo (10% = $100 in fees)
• $2,000 domain: Consider Atom.com (5% = $100) vs Dan.com (9% = $180)
• $50,000 domain: Escrow.com's fees worth it for security

Strategy 3: Optimize payment method

Cost comparison for $10,000 transaction:

• Wire transfer: $10,325 + $60 in fees = $10,385
• Credit card: $10,325 + $361 (3.5%) = $10,686
• ACH: $10,325 + $0 = $10,325

ACH saves $60-$361 per transaction

When to use each:

• ACH: Best cost, use when not in hurry (2-5 days)
• Wire: Fast and reliable (1-2 days), worth fee for speed
• Credit card: Instant, use only when speed critical and willing to pay premium

Strategy 4: Use push transfers

Standard transfer:

• Takes 5-7 days
• Increases total escrow timeline
• More escrow fees if charged daily

Push transfer:

• Takes minutes to hours
• Reduces escrow timeline
• Lower costs if using escrow with daily fees
• Less risk of domain loss during transfer

How to enable push transfers:

• Both parties use compatible registrars (GoDaddy ↔ GoDaddy, Namecheap ↔ Namecheap)
• Or transfer to escrow service's registrar account first
• Some escrow services coordinate push transfers automatically

Strategy 5: Bundle multiple domains

Selling portfolio of 5 domains at $2,000 each:

Separate transactions:

• 5 × $65 (Escrow.com 3.25%) = $325 in fees

Bundled transaction:

• $10,000 total × 2.5% = $250 in fees
• Savings: $75

Plus time savings and simpler process.

Strategy 6: Build costs into pricing

Transparent pricing approach:

Domain: example.com
Price: $5,000
Buyer pays: $5,450 (includes escrow fees)
Seller receives: $5,000

All-inclusive pricing approach:

Domain: example.com
Price: $5,650 all-in
Buyer pays: $5,650 (no additional fees)
Seller receives: $5,000 after covering all escrow costs

Second approach attracts more buyers - no surprise costs.

Alternatives to Traditional Escrow

Marketplace Built-in Escrow

How it works: Marketplaces like Dan.com, Sedo, Afternic include escrow as part of their service. When you sell on these platforms, escrow is automatic.

Advantages:

• No separate escrow setup needed
• Faster process (automated)
• All-in-one experience
• Customer support handles issues

Disadvantages:

• Higher combined fees (marketplace + escrow)
• Less control over process
• Locked into that marketplace's terms
• Can't use preferred escrow service

Best for:

• Domains already listed on marketplace
• Sellers wanting hands-off process
• Buyers browsing marketplace portfolios

Smart Contract Escrow (Blockchain)

How it works: Use cryptocurrency smart contracts (Ethereum, etc.) to hold funds and automatically release upon domain transfer verification.

Providers:

• OpenBazaar
• Particl
• Custom smart contracts

Advantages:

• Lower fees (1-3% vs. 3-10%)
• Faster settlement
• No intermediary needed
• Transparent on blockchain

Disadvantages:

• Requires cryptocurrency knowledge
• Limited adoption in domain industry
• Smart contract bugs possible
• Irreversible (no dispute resolution)
• Domain transfer verification challenging

Best for:

• Cryptocurrency enthusiasts
• Small transactions where trust already exists
• Technical users comfortable with blockchain

Payment Plans with Contract

How it works: Instead of full payment through escrow, buyer pays in installments with legal contract securing domain.

Typical structure:

• Buyer pays 30-50% upfront
• Domain transferred to buyer but seller maintains ownership rights via contract
• Monthly payments for 6-12 months
• Seller can reclaim domain if buyer defaults

Advantages:

• Enables sales to buyers who can't pay full amount
• Seller earns interest or premium on payment plan
• Can sell domains that wouldn't sell otherwise

Disadvantages:

• Risk of buyer default
• Legal contract required
• Seller doesn't receive full payment upfront
• Buyer doesn't get full ownership immediately

Best for:

• High-value domains ($20,000+)
• Motivated buyers with limited liquidity
• Sellers willing to take on risk for premium price

Direct Transfer with Trusted Broker

How it works: Use known domain broker to facilitate transaction without formal escrow.

Process:

• Broker verifies both parties
• Buyer sends payment to broker
• Broker instructs seller to transfer domain
• Broker releases payment after verification

Advantages:

• Lower fees than escrow (typically 10% flat)
• Personal relationship with broker
• Faster process
• Broker can assist with negotiation

Disadvantages:

• Less formal than escrow
• Depends on broker's reputation
• No regulatory protection
• Broker might not be licensed/bonded

Best for:

• Established domainers with broker relationships
• Domains requiring sales assistance
• Situations where negotiation support needed

Registrar Transfer with Payment Verification

How it works: Some registrars offer basic escrow/transfer services for domains registered with them.

Examples:

• GoDaddy's Domain Buy Service
• Namecheap's transfer service
• Dynadot's escrow

Advantages:

• Convenient if domain already at registrar
• Often lower fees
• Familiar platform
• Combined with domain management

Disadvantages:

• Limited to specific registrar
• Less robust than dedicated escrow
• Fewer protection options
• Not always available for all TLDs

Best for:

• Simple transactions
• Buyer and seller using same registrar
• Lower-value domains

Security Best Practices

Protecting Yourself as a Seller

Before starting escrow:

1. Verify buyer identity
   • Check email domain (avoid free email providers if possible)
   • Search buyer name/company
   • Request LinkedIn profile for high-value sales
   • Be wary of brand-new accounts
2. Confirm domain is ready
   • Domain unlocked at registrar
   • Authorization code obtained (if needed)
   • Contact information up to date
   • No pending disputes or issues
   • Domain not within 60-day transfer lock
3. Document everything
   • Save all communications
   • Screenshot domain stats if claiming traffic/revenue
   • Document domain history
   • Save proof of ownership

During escrow:

4. Don't transfer until payment confirmed
   • Wait for escrow service to confirm payment received
   • Don't accept buyer's "proof of payment" directly
   • Verify directly with escrow service
5. Use correct transfer method
   • Follow escrow service instructions exactly
   • Transfer to buyer's account, not a third party
   • Keep confirmation of transfer
   • Verify transfer completed in your registrar account
6. Maintain communication
   • Respond promptly to escrow service requests
   • Notify buyer of transfer initiation
   • Provide tracking/confirmation numbers
   • Be available for questions

After transfer:

7. Verify funds received
   • Confirm payment deposited in your account
   • Check amount matches agreement
   • Keep transaction records for taxes
   • Request feedback/review

Red flags to watch for:

• Buyer rushes process or pressures immediate transfer
• Buyer asks to transfer domain outside of escrow
• Buyer wants to use unknown/untrusted escrow service
• Buyer communication is unclear or evasive
• Buyer's email/contact info seems suspicious
• Buyer asks for domain before payment confirmed

Protecting Yourself as a Buyer

Before starting escrow:

1. Research the domain
   • Check domain history (archive.org)
   • Verify traffic claims (SimilarWeb, Ahrefs)
   • Search for trademark conflicts
   • Check for Google penalties
   • Verify revenue claims if applicable
2. Verify seller legitimacy
   • Check seller's reputation (NamePros, DNForum)
   • Look for past transaction history
   • Verify seller actually owns domain (WHOIS)
   • Be cautious of recently acquired domains being flipped
3. Understand all costs
   • Escrow fees
   • Payment method fees
   • Transfer costs
   • First year renewal included?
   • Currency conversion fees

During escrow:

4. Use inspection period
   • Request 3-5 day inspection period
   • Verify domain transferred correctly
   • Check domain matches description
   • Test domain functionality
   • Verify traffic/revenue if claimed
5. Verify domain transfer
   • Confirm domain in your registrar account
   • Check WHOIS shows your information
   • Verify domain not locked
   • Ensure you have full control
6. Document any issues
   • Screenshot evidence of problems
   • Note discrepancies from listing
   • Report issues to escrow immediately
   • Keep all communications

After transfer:

7. Secure the domain
   • Update registrar contact information
   • Enable two-factor authentication
   • Lock domain at registrar
   • Set up auto-renewal
   • Update DNS if needed

Red flags to watch for:

• Seller avoids questions about domain history
• Seller insists on specific escrow service you haven't heard of
• Domain history shows recent penalty or issues
• Seller won't provide inspection period
• Traffic/revenue claims seem inflated
• Seller has no track record or reputation

Escrow Service Verification

How to verify legitimate escrow:

1. Check licensing
   • Escrow.com: Licensed in all 50 states
   • Verify license numbers on state websites
   • Check Better Business Bureau rating
   • Look for industry certifications
2. Verify website security
   • HTTPS with valid SSL certificate
   • Look for security badges
   • Check domain age (escrow.com since 1999)
   • Verify contact information
3. Research reputation
   • Search "[escrow name] scam" or "review"
   • Check domain forums (NamePros, DNForum)
   • Look for complaint history
   • Verify transaction volume claims

Common escrow scams to avoid:

Fake escrow websites:

• Scammer creates fake escrow website (escr0w.com, escroww.com, etc.)
• Looks legitimate but funds go directly to scammer
• Prevention: Always type escrow URL directly, never click email links

Escrow impersonation:

• Scammer sends fake "escrow confirmation" emails
• Email appears to be from Escrow.com but isn't
• Prevention: Check email headers, verify sender address, log into escrow directly

Redirected payments:

• Scammer intercepts escrow instructions
• Provides different bank account for payment
• Prevention: Verify bank details directly with escrow service by phone

Early release scam:

• Scammer poses as escrow and asks to release funds early
• Claims "technical issue" requires early release
• Prevention: Never release funds early, verify all requests with escrow directly

International Domain Escrow Considerations

Currency and Payment Issues

Multi-currency transactions:

Challenge: Buyer and seller in different countries with different currencies.

Solutions:

• Use escrow service supporting multiple currencies (Escrow.com, Sedo)
• Agree on base currency for transaction
• Understand who bears currency conversion risk
• Lock exchange rate if possible

Currency conversion costs:

• Bank conversion spread: 2-4% over spot rate
• Conversion fees: 1-2%
• Total cost: 3-6% of transaction
• Can add hundreds or thousands to large sales

Example:

Domain sale: $10,000 USD
Seller in Europe wants Euros
Bank conversion rate: 1 EUR = 1.08 USD (vs. spot 1.10)
Seller receives: €9,090 instead of €9,259
Currency cost: €169 (1.8%)

Best practices:

• Use escrow services with competitive exchange rates
• Consider cryptocurrency to avoid conversion
• Build currency costs into pricing
• Agree upfront who pays conversion costs

International Wire Transfers

Challenges:

• Multiple intermediary banks
• Each bank charges fees ($10-$40)
• Transfer can take 5-7 business days
• Risk of lost or delayed transfers
• Bank verification requirements

How to optimize:

1. Use SWIFT transfers
   • Faster than standard international wire
   • More trackable
   • Provide full SWIFT code
2. Provide complete information
   • Full bank name and address
   • SWIFT/BIC code
   • IBAN (for European banks)
   • Recipient name exactly as on account
   • Reference number
3. Track the transfer
   • Get SWIFT confirmation number
   • Monitor transfer progress
   • Follow up if delayed beyond expected timeframe
4. Consider alternatives
   • TransferWise/Wise (lower fees, better rates)
   • Cryptocurrency (faster, lower fees)
   • PayPal (higher fees but convenient)

Tax Implications

Important: Consult with tax professional for your specific situation.

General considerations:

For sellers:

• Capital gains tax on domain profit (varies by country)
• Income tax if domain selling is business activity
• VAT/GST in applicable countries
• Tax reporting requirements differ by jurisdiction
• Escrow service provides transaction receipt

For buyers:

• Domain may be tax-deductible business expense
• Capitalized asset vs. expense treatment
• VAT/GST payment requirements in some countries
• Keep escrow receipts for tax records

VAT handling (Europe):

• Digital goods/services: VAT applicable
• B2B transactions: Reverse charge mechanism may apply
• B2C transactions: VAT charged at buyer's country rate
• Sedo and some escrow services handle VAT collection

USA tax reporting:

• Escrow services may issue 1099-K for transactions over $600
• Capital gains vs. ordinary income treatment
• State tax considerations
• Estimated tax payments for large gains

Legal and Regulatory Differences

Domain ownership rights:

• Some countries restrict domain ownership to residents
• Corporate ownership requirements for certain ccTLDs
• Proxy ownership services may be needed
• Escrow must verify ownership eligibility

Contract enforceability:

• Escrow terms subject to different laws in different countries
• Dispute resolution jurisdiction varies
• Some countries don't recognize certain escrow agreements
• Higher-value transactions should include legal counsel

Regulatory compliance:

• Anti-money laundering (AML) verification
• Know Your Customer (KYC) requirements
• Large transactions may require additional documentation
• Some countries restrict capital movement

Conclusion: Escrow as Essential Protection

Domain escrow isn't an optional luxury - it's essential protection for any significant domain transaction. While fees might seem high (3-15% of transaction value), they're tiny compared to the risk of losing your entire investment to fraud.

Key takeaways:

1. Always use escrow for:
   • Transactions over $500
   • Unknown parties
   • International deals
   • High-value domains
2. Choose the right escrow for your needs:
   • Escrow.com: Maximum security, high-value transactions
   • Dan.com: Speed and convenience
   • Sedo: International and European transactions
   • Afternic: GoDaddy integration
   • Atom.com: Lower fees, modern experience
3. Follow the process carefully:
   • Don't release domain until payment confirmed
   • Don't pay until ready to receive domain
   • Use inspection periods for due diligence
   • Document everything
4. Watch for red flags:
   • Rushed transactions
   • Unknown escrow services
   • Avoiding standard escrow
   • Pressure to skip steps
5. Optimize costs:
   • Negotiate fee responsibility
   • Choose cost-effective escrow for transaction size
   • Use push transfers when possible
   • Consider payment method costs

The domain industry has largely self-regulated around escrow services because they work. Fraud rates in escrow transactions are effectively zero, while non-escrow transactions have significant fraud risk. The peace of mind and security escrow provides is worth every penny.

Whether you're buying your first domain or your thousandth, make escrow a non-negotiable part of every transaction. Your financial security depends on it.