Why escrow exists
Domain transactions have two structural risks that don't exist in most commerce. Buyer wires, seller disappears. A buyer sends $80,000 to a seller's bank account and never receives the domain — and because domain transfers are not reversible the way credit card charges are, the money is gone. Seller transfers, buyer reverses. A seller pushes the domain to the buyer's registrar; the buyer then disputes the original payment with their bank and recovers the funds.
Escrow solves both. The buyer's money sits in a regulated account. The seller transfers. The buyer confirms. Only then does escrow release. Neither side can defraud the other without the third party agreeing — and the third party has no incentive to agree.
Escrow.com walkthrough
- Buyer initiates the transaction on Escrow.com. Specifies the domain, the agreed price, the inspection period (typically 1–3 days), and who pays the fee.
- Seller accepts the terms. Both parties verify identity (Escrow.com requires KYC for transactions above $5K).
- Buyer funds escrow via wire transfer, credit card (under $25K only), or PayPal (under $10K). Wire is the default and only realistic option above $25K.
- Escrow confirms funds received and instructs the seller to begin the transfer.
- Seller initiates the registrar transfer. For .com, this means unlocking the domain at the source registrar, generating an authorization code, and pushing the domain to the buyer's registrar of choice.
- Registrar transfer completes. Industry-standard 5–7 days for .com between most major registrars. Faster (24–48 hours) if both parties use the same registrar (account push).
- Buyer confirms receipt at their registrar and accepts the domain on Escrow.com. Inspection period begins.
- Escrow releases funds to the seller at the end of the inspection period (or immediately if the buyer waives it).
Total elapsed time: 5–10 business days for a clean .com transaction.
Fee schedule by deal size
| Transaction value | Escrow.com fee | Example total |
|---|---|---|
| Under $5,000 | 3.25% (min $25) | $2,500 → $81 fee |
| $5,000–$25,000 | ~$200 + 0.26% of excess | $15,000 → $226 fee |
| $25,000–$500,000 | ~$252 + 0.22% of excess | $100,000 → $417 fee |
| Over $500,000 | ~$1,297 + 0.15% of excess | $1,000,000 → $2,047 fee |
Fees are bounded — Escrow.com caps the percentage at roughly 0.89% at the small end and asymptotes toward 0.15% at the large end. The schedule is one of the most efficient pieces of friction in domain transactions.
Who pays
Default convention: buyer pays the escrow fee. Escrow.com lets the initiating party set this; brokered deals usually default to buyer-pays. On transactions above $250K, splitting the fee 50/50 is a common late-stage concession the seller may request — accepting this costs the buyer almost nothing and removes a final friction point.
Never agree to seller pays the fee. It removes the seller's incentive to push the transfer cleanly and creates a deferred negotiation at the worst possible moment (after you've funded escrow).
Timeline
- Day 0: Transaction created, terms agreed. Both parties verify identity.
- Day 1: Buyer wires funds. Escrow confirms receipt.
- Day 2–3: Seller initiates registrar transfer, releases auth code.
- Day 4–9: Registrar transfer completes (5–7 day .com window).
- Day 10: Buyer confirms receipt, inspection period begins.
- Day 10–13: Inspection (1–3 days, often waived).
- Day 13: Funds release to seller.
For .ai and other ccTLDs, add 2–5 days to the registrar transfer window. For weekend/holiday transactions, add 2–3 days.
Alternatives to Escrow.com
- Sedo Transfer Service — free for transactions executed on the Sedo marketplace. Comparable safety, narrower applicability.
- Payoneer Escrow — occasionally used for international deals where Escrow.com KYC is slow. Higher fees, narrower service.
- Attorney escrow — for transactions above $1M where the buyer wants additional contractual protections (trademark warranties, indemnification, IP transfer language). Lawyer fees $5K–$25K; usually worth it at this size.
- Avoid: PayPal, Wise, direct bank wire, Stripe. None of these provide the dispute-resolution structure a domain transfer requires.
Red flags and scam patterns
- "Use this escrow site instead — it's cheaper." Fake escrow sites are the #1 scam vector. Always use Escrow.com directly; type the URL, don't click a link from the seller.
- Wire before transfer. Any seller insisting on a wire before pushing the domain is either inexperienced or running a scam. Walk.
- Pressure to skip inspection. The inspection period exists for a reason. A seller pushing you to release funds immediately is a yellow flag worth investigating.
- Mid-transaction price change. A seller raising the price after you've funded escrow — sometimes claiming "I got another offer" — is gaming you. Hold the original terms or cancel.
- Domain "transferred" but you can't manage it. Verify domain control independently at the new registrar before accepting on Escrow.com. The domain must be in your account, under your control, with you as the contact of record.
Frequently asked questions
- What is domain escrow?
- A neutral third party holds the buyer's funds while the seller transfers the domain. Funds release to the seller only after the buyer confirms the domain has arrived at their registrar of choice. Escrow eliminates wire-fraud and seller-disappears scenarios, which are the two most common failure modes in domain transactions.
- How much does Escrow.com cost?
- Tiered fees on the transaction value. Under $5K: 3.25% (min $25). $5K–$25K: ~$200 + 0.26% of amount over $5K. $25K–$500K: ~$252 + 0.22% of amount over $25K. Over $500K: ~$1,297 + 0.15% of amount over $500K. On a $100K deal, total escrow fees run roughly $415; on a $1M deal, roughly $2,047.
- Who pays the escrow fee, buyer or seller?
- Default convention is buyer pays — Escrow.com lets the initiating party choose, and brokered deals usually structure the buyer as the payer. On larger deals (above $250K) the fee is sometimes split 50/50 as a negotiation concession. Never agree to seller-pays — it removes the seller's incentive to push the transfer cleanly.
- How long does a domain escrow transaction take?
- 5–10 business days end-to-end on a clean .com transaction. Stage breakdown: 1 day to set up and fund escrow, 1–2 days for the seller to initiate transfer, 5–7 days for the registrar-to-registrar transfer to complete (industry-standard wait period), 1 day for escrow verification and fund release. .ai and other ccTLDs add 2–5 days to the transfer window.
- Is Escrow.com safe?
- Yes. Escrow.com is licensed and regulated as an internet escrow agent in California (its home state) and is the default service for domain transactions globally. It's owned by Freelancer.com (publicly traded ASX:FLN) and has cleared over $5 billion in transactions since 1999. The risk in domain transactions is almost never the escrow service — it's deals that bypass escrow entirely.
- What are the alternatives to Escrow.com?
- Sedo's built-in transfer service (free for transactions executed on Sedo, comparable safety). Payoneer Escrow (occasionally used for international deals where Escrow.com onboarding is slow). Attorney escrow via a domain-experienced lawyer (typical for transactions above $1M where the buyer wants extra contractual protections). Avoid PayPal, Wise, or direct wire transfer — none of these provide the dispute-resolution structure required for a domain transfer.
We handle escrow on every deal we broker.
Escrow setup, registrar coordination, DNS cutover planning — included in every Laser AI engagement. See the full acquisition playbook.