How Does Escrow.com Work, and How Can This Article Save You Money?
One of the things I love about the domain business is its international nature. As brokers, we have the opportunity to work with domain owners and buyers from every corner of the globe. However, with every upside comes a downside — in this case, crime, primarily theft. If someone in Portugal steals from you while you’re sitting in Canada, you’ll spend a fortune in time and legal fees just trying to get your money back. That’s why using a reputable, neutral third party isn’t just recommended when buying or selling a domain — it’s essential. One of the services we often recommend is Escrow.com.
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People always ask: How does it actually work? How do I know my money is safe? Who are these guys?
Escrow.com is owned by Freelancer.com, a publicly traded company, and has been around for nearly 30 years. With offices in California, they hold escrow licenses in more than 45 states and have processed over $4 billion in transactions. eBay Motors even recommends them as the official and only escrow option when buying a car (see here).
Step 1: Create Your Account
Whether you’re buying or selling, the first step is creating an account. You’ll need to decide whether to sign up as an individual or a business. Either way, Escrow.com will verify your information as part of its Know Your Customer (KYC) requirements. Put simply, they need to ensure they’re not doing business with money launderers, criminals, or any other shady actors.
- If you’re an individual, they’ll ask for a passport or government-issued ID, a utility bill, and usually a liveness check (a quick verification video) to prove you are who you say you are.
- If you’re a company, an officer or shareholder must open the account, provide identification, and submit the articles of incorporation. You’ll also need a utility bill, bank statement, or lease that matches your company’s official address.
Now, I know what you’re thinking: “Jeff, I don’t want to dig up my articles of incorporation. I work from home, and my official address is my lawyer’s office. I’ll just sign up as an individual, and when it’s time to pay, I’ll use my business account.”
Here’s why: when you wire funds, the name on the account has to match the name on the wire. If it doesn’t, Escrow.com will either ask you for more documentation to switch to a business account — or worse, send the money back.
Step 2: Setting Up the Transaction
Once your account is ready, the buyer, seller, or broker can set up the transaction. You’ll enter the domain being purchased, the agreed price, decide who pays Escrow.com’s fees, and whether or not you want to use their concierge service.
FOR THE RECORD:
It’s customary that if the buyer chooses to use Escrow.com, they cover their own fees.
If a broker is involved, they typically set up the transaction. This way, they can add their agreed-upon commission and designate whether the buyer or seller is responsible for paying it. They also help both parties keep the transaction moving forward. (I can do this in my sleep. You want an experienced broker taking control here.
Inspection Period (top right corner of picture):
Escrow.com isn’t just for domains — they’ve handled transactions for cars, boats, watches, and yes, I even heard about one for an elephant. The inspection period was created for these types of physical assets. For example, if you bought a Rolex, you’d want 3–5 days to have it authenticated. For domains, there’s nothing to physically inspect, so 1 day is customary.
Agreement:
Once the transaction is created (by the buyer, seller, or broker), Escrow.com notifies all parties to log in and review the terms of the transaction. Everyone must agree before moving forward.
When all parties click “agree,” the buyer is prompted to make payment. At that point, the buyer can choose from Escrow.com’s payment methods. Just keep in mind:
- Credit card and PayPal payments are capped at $5,000.
- You can have a purchase agreement with the buyer/seller/broker that is attached to this transaction.
Once the buyer receives the domain, they must notify Escrow.com that the transfer has been completed. Escrow.com then initiates the 1-day inspection period, and upon its completion, the funds are released to the seller.
If the buyer wires funds but the seller fails to transfer the domain, the transaction eventually times out, and the money is returned to the buyer.
How does this save me money?
In the domain industry, the only real difference between standard and concierge service is that under concierge, Escrow.com takes possession of the domain first and then transfers it to the buyer.. For that, they charge almost double.
If you’ve never done a domain transfer before and aren’t comfortable handling it, consider paying for a concierge service. Please note you will need to transfer the domain anyway, but it will be to Escrow.com instead.
Where buyers and sellers get frustrated:
Over the years, I’ve seen plenty of frustration during transactions — often caused by misunderstandings or unrealistic expectations.
- As I mentioned earlier about “Escrow.com Jail,” people get approved under one type of account but wire funds from another. This triggers requests for extra paperwork or even restarting the whole process.
- Another common issue: the timeline. For example, the buyer wires money on Friday. Escrow.com confirms funds on Monday. The seller provides the authorization code by late Monday or Tuesday. The buyer starts the transfer on Tuesday or Wednesday. The registrar then takes 3–5 days to complete the transfer. Once complete, the buyer must log in and confirm receipt of the domain to start the inspection period.
The buyer feels it’s taking forever, and the seller thinks Escrow.com is sitting on their money. In reality, it’s just the normal process of domain transfers and registrar timelines.
Escrow.com is a very affordable “insurance policy” to protect your interests. If you read this entire article first, it should be smooth sailing….I am sensing a little TL/DR right now, so I did the next best thing and made a step-by-step chart for you to follow instead:
Escrow.com Domain Transaction – Step by Step
1. Create Your Account
- Sign up as an individual or business.
- Complete KYC (passport/ID, utility bill, liveness check, or incorporation docs).
- Important: account name must match the bank/wire sender.
2. Set Up the Transaction
- Buyer, seller, or broker creates the deal.
- Enter domain, purchase price, who pays fees, and choose optional concierge service.
3. Agreement
- All parties log in and review terms.
- Everyone must click “agree” before payment begins.
4. Buyer Pays Escrow.com
- Bank wire (recommended for larger deals).
- Credit card / PayPal accepted up to $5,000.
- Funds are held securely until the domain transfer is confirmed.
5. Domain Transfer
- Seller provides the authorization code and pushes the domain to the buyer’s registrar.
- Registrars typically take 3–5 days to complete the transfer.
6. Buyer Confirms Receipt
- Buyer logs into Escrow.com and confirms they have the domain.
7. Inspection Period
- For domains, 1 day is customary (inspection mainly applies to physical goods).
8. Release of Funds
- Once the inspection is complete, Escrow.com releases the money to the seller.
- If the seller fails to transfer, the transaction times out, and the buyer is refunded.
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