Why Use Domain Escrow Services?

Buyers and sellers conducting business over the Internet are increasingly turning to escrow services to protect themselves from fraud, irresponsibility and deception.

What is an Escrow Services Company?

An escrow services company is a regulated and licensed company that acts as a third party between buyers and sellers. For such online transactions with high potential for fraud, usually involving a significant sum, the escrow company is responsible for collecting, holding and handing over money from a buyer to a seller. This entire process is based on an agreement between both parties. Generally, once a buyer has obtained domain financing and then received and approved the commodity from a seller within a contracted period of time, the escrow service will send the payment to the seller to complete the transaction. The escrow company hence serves as a trusted third party to prevent any fraud.

Why Would I Need Escrow Services?

In most online transactions that involve a buyer, a seller and high-priced items, escrow services are used because these companies offer protection and security for both the buyer and seller. In the case of domain buying and selling, an escrow service comes in after the buyer and seller have settled on the domain price. At this point, ownership and control over a domain or website is transferred to the buyer before payment. During this point, the escrow company holds the funds, and once successfully reassigned, payment is forwarded to the seller. This procedure ensures that the buyer does receive the domain or website, while guaranteeing that the seller receives his or her payment once ownership is handed over.

How Does an Escrow Service Work?

When a buyer pays for a website or domain name through an escrow service, the buyer’s funds will sit in his or her account with the escrow company. Once the seller has indeed transferred the ownership and domain/website control, the escrow will transfer the funds to the sellers escrow account. Although both parties need to have an escrow account, it simply ensures that both the seller and buyer involve in fraud-free transactions.

Most escrow services have fees that will be shouldered by the seller of a website or domain. Some even offer value-added features to attract the attention of potential buyers. However, each domain name or website is subject to its own escrow service fee, depending on the price of the item.