Beware of Escrow services that make you pay all the fees upfront

There are pros and cons to using an escrow service. In most cases the pros far outweigh the cons as escrow services add a huge amount of safety to buying and selling domain names. That being said, one of the downsides to some escrow services is that they charge the escrow fee upfront. While this is great for the escrow service themselves, this might not be ideal for you as either the buyer or seller of a digital asset like a domain name.

Here’s a good example of a situation where this can come back to bite you. Let’s suppose you work out a deal with someone who wants to buy your domain but can’t afford to pay all at once. So you split the transaction into monthly payments over a one year time period. Now, what happens if the buyer defaults on the payments, of course you still have the domain name but what about the escrow fees you paid along the way?

I did a bit of research and found that a lot of escrow providers ask for escrow fee upfront, which limits their risk, but not yours. After doing more digging I found that Payoneer has a different way of doing things which distributes escrow fees throughout the life of the transaction – the result is that nobody gets stuck paying the full escrow fee upfront if the transaction never ends up going through.

Next time you’re either buying or selling a domain name, of course use an escrow service, but when you do, check to see if they ask for the full set of escrow fees upfront. If so, you might want to find one that doesn’t because as we all know, not all transactions go as planned, and when they don’t, nothing stings more than lost money.

{ 3 comments… add one }

  • George in Miami May 27, 2017, 8:09 am

    Thank you, Morgan.
    Very good information to play safe.
    I’ve a question for you regarding your note, please.
    When splitting the payments, do you charge any interest?
    Thank you.

    Reply
    • Morgan May 29, 2017, 10:09 pm

      @George – I haven’t charged interest before myself but I do know some people who have. I think it really depends on the price of the name and the time period.

      Reply
  • Joe May 28, 2017, 5:04 am

    Thanks Morgan I am already registered in Payoneer.com very easy much better than Paypal.
    By the way what website directories make money for my domain names.com you can give me some good directory.

    Have a good weekend, my friend.

    Reply

Leave a Comment