If you’re spending more than $1,000 on a domain name – use an escrow service

Yesterday I was talking to a friend of mine who is another startup founder here in Austin. He is getting ready to buy a domain name, the negotiation is over, and now he’s trying to sort out the safest way to pay for and transfer the domain name. Like most domain transactions, he doesn’t know the seller, so while the negotiations went well, and the seller seems like a nice guy, he wants to be safe given the cost of the domain.

I told him my general rule of thumb that I’ve been using for 5+ years:

“If you’re spending more than $1,000 on a domain name use an Escrow service”

For years now Escrow.com has been the most well-known Escrow service on the market that really goes above-and-beyond when it comes to domain name transactions. I’ve used them more times than I can count and it gives me a lot of security as a buyer or a seller that always is worth the small fee, which I usually split with the other person.


While your instinct might be to use a service like Pay Pal or Venmo, be warned, you’ll take a huge amount of risk as a buyer or seller. The problem with regular payment services is that it’s easy for a seller to simply keep your money and claim to have transferred the domain to your account, when they’re really keeping the domain, and your money.

Try contacting Pay Pal about this and I can tell you, they aren’t going to investigate it or understand how to settle it. Usually, as a buyer, you’re left without your money, and without your domain. With a service like Escrow.com, here’s how the process works to keep both sides secure:

  1. Buyer sends money to Escrow.com
  2.  Escrow.com confirms receipt and notifies the seller
  3. The seller initiates the domain transfer
  4. Once the buyer has the domain, they confirm and the money is transferred

If you’re spending $200 on a domain, a process like this could be overkill, but in my book – if you’re spending more than $1,000 it’s worth it to use an escrow service every time.

{ 10 comments… add one }

  • Tony April 17, 2016, 2:47 pm

    Any domain purchase or sale regardless of price should be through escrow.com unless it’s through a platform like Sedo or Godaddy which will act as the escrow service for you.

    • Morgan April 17, 2016, 3:37 pm

      @Tony – my only concern about using escrow with a company like Sedo is that I don’t think they are covered in all 50 states. I could be wrong here but I thought Escrow.com was the only one that was. Let me know if anyone knows as I haven’t looked too deeply into it since Escrow.com has been my go-to for so long now.

  • Joe April 17, 2016, 2:51 pm

    Escrow as you write well in your post is essential for the seller and buyer security.
    A question that we all can answer in your blog use with Escrow Hosting and SSL certificate.
    do this because when your years offer domain names for sale from your blog on your blog never see https://
    It is necessary in my blog both Escrow and SSL.
    Thank you.

  • Scott Neuman April 17, 2016, 3:19 pm

    I’d only use Escrow.com. We’ve even seen golden sellers screw over buyers. Anything else is asking for trouble.

  • Michael April 17, 2016, 7:24 pm

    Paypal is risky for everything! Everyone knows how to dispute stuff on paypal and they do for every possible reason and the even smarter ones(the real cons) if they lose the paypal dispute they will then go to there credit card company and file a chargeback!

    I bought a domain name from huge domains and didn’t have a problem sending them over a thousand with there system. They do take escrow to.

  • danny April 18, 2016, 12:22 am

    Ya – I almost never would accept a deal over Paypal. For smaller deals, or ones that include payment plans, I’ve used ECOP successfully over the years. Francois’s system is a bit clunky honestly, but it works, and the fees are lower than Escrow.com.

    The only time I would ever just take a payment via Paypal is if the buyer is a business owner with a good LinkedIn profile. Again, that would just be for smaller amounts too.

    If the buyer doesn’t want to use an escrow service, I just assume they’re trying to do some tricks 😀

    • Michael April 20, 2016, 3:05 am

      Lastly I have been having direct deposit in my account or they come to my house with cash haha

  • Anthony Kirlew April 19, 2016, 1:01 am

    I also recommend using a domain sales agreement if you are not using Escrow.com (for those lower priced sales). At least if someone tries anything funny with PayPal (or whatever payment service you are using), you will have a documented sales agreement to send PayPal and hopefully that will help.

    ~ Anthony

    • Morgan April 20, 2016, 2:14 am

      @Anthony – completely agreed, thanks for mentioning!

  • Joe April 20, 2016, 2:44 pm

    I have in http://www.afternic.com 4 premium domains and is not paying for Escrow for being one international customers.
    I say that not by PayPal, as the currency exchange is very bad.
    I accepted charge for check after sale, but it is the first time I’ll use this payment system, can anyone of you briefly how this works write the check.

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