November 11, 2024

What is Domain Name Escrow & How Does it Work?

written by

Joe Uddeme

Joe Uddeme

What is Domain Name Escrow & How Does it Work?

Escrow is important when buying domain names, especially those of high value. Domain name expert Joe Uddeme explains how domain name escrow works – and why you should use a domain escrow 3rd-party when making highly-priced acquisitions.

 

What is Domain Name Escrow?

Domain name escrow is a specialized service designed to protect both buyers and sellers during domain name transactions.

In this process, a neutral third-party agent holds the payment and domain information until all conditions of the transaction are met.

This setup ensures that the buyer receives the domain name and the seller gets their payment, significantly reducing the risk of fraud and deception.

By using domain name escrow services, both parties can enjoy a secure and efficient transfer of domain ownership, providing peace of mind throughout the transaction. A domain name consulting service can help make the process much easier.

What Is Escrow?

Escrow is an arrangement in which a neutral third party temporarily holds money meant for a purchase until specific conditions are met. The money will only be transferred to the intended recipient when the conditions are met.

If the conditions are not fulfilled, the money will go back to the buyer. In domain name and other transactions, the escrow process often involves a lawyer managing legal documents, ensuring compliance with laws, and securely holding the assets and money in a trust account until the terms of the agreement are fulfilled.

A large vault door denoting the importance of secure transactions during the purchase of a premium domain name

What Can Escrow Be Used For & Why

Escrow is common in transactions where a significant amount of money is involved, e.g., real estate. It is necessary to protect the buyer from losing money in case the seller does not fulfill the terms of the deal.

Domain transactions can be pricey, which makes escrow and other services necessary just like with real estate. After all, domain names are online real estate. Escrow protects against:

  • Sellers refusing to deliver a domain despite agreeing to do so.
  • Buyers refusing to pay for a domain despite an agreement to buy it.
  • Payment being made – but the domain not being transferred to the buyer.

Secure payment is crucial in domain name transactions, and escrow services ensure that the financial exchange is safe and protected.

In short, escrow ensures that both parties in a deal stick to their agreed terms. It is a mediator of the transaction and refuses to complete it until both parties act in good faith.

How Does Escrow Work?

1. Agreement on price and deal

The buyer and the seller negotiate and agree on how much is to be paid for a domain name or group of domain names. They also negotiate important factors like the date of payment, method of payment, and what currency to use.

2. Buyer places agreement with an escrow company

With the deal terms drawn out, the buyer finds an escrow provider and deposits the payment with an escrow agent. Once the payment goes through, the buyer pays escrow company will notify the seller and tell them to transfer ownership of the domain name related to the escrow transaction.

3. Domain Name Is Transferred

The seller will transfer the domain name to the buyer. The wire transfer procedure varies depending on the domain registrar, but both parties will work together to ensure a smooth transfer.

It is crucial to involve legal counsel in domain transfers to secure the transaction and ensure compliance with legal requirements.

4. Domain Transfer Is Confirmed

After the domain is transferred, the buyer will notify the seller and agree with the escrow company that the seller has fulfilled their part of the deal.

5. Payment Given To Seller

With the domain transfer confirmed, the escrow company completes the escrow transaction by using a money order and sending the money deposited by the buyer to the seller.

What fees are associated with using an escrow service?

The escrow usually charges a commission on the value of the deal. Some may also charge a flat fee in addition to a commission. The exact commission may vary depending on the deal volume.

Benefits of Using Escrow For Buyers and Sellers

The benefits of using escrow for domain names include:

  • Security: The escrow holds the money until all deal terms are fulfilled, so there are little chances of the buyer losing their money without getting the intended domain name. The buyer also feels more secure dealing with a trusted escrow company than with a stranger over the web. Additionally, escrow services safeguard domain transactions by holding funds and domain holder information, minimizing the risk of fraud.
  • Assurance: The buyer is assured that they will get the domain they want, and the seller is assured of payment once the domain transfer is confirmed.
  • Customer support: Escrow services usually offer customer support and can guide the buyer throughout the process of acquiring a domain name.

Printing press roll of US dollar bills for article about domain name escrow services

Choosing the Right Escrow Services

Selecting the right 3rd-party escrow provider for domain name transactions is crucial for a smooth and secure process. Start by looking for a reputable and licensed escrow company with a proven track record in handling domain name transactions.

Evaluate their fees and payment terms to ensure they fit within your budget. Additionally, consider the quality of their customer service and support, as this can be invaluable if any issues arise during the transaction.

A reliable escrow provider should offer a secure and transparent process to deposit funds, with clear contractual obligations and a well-defined escrow agreement. Research the company’s reputation online and read reviews from previous clients to ensure you are working with a trustworthy escrow company.

Domain Name Transfer and Intellectual Property

Transferring ownership of a domain name involves several steps and can be particularly complex when intellectual property rights are involved. A domain name can be considered intellectual property if it is trademarked, which can impact its value and transferability.

Before proceeding with a domain name transfer, it is essential to conduct a clearance search to ensure the domain name does not infringe on any existing trademarks.

Utilizing a domain name escrow provider can facilitate this process by ensuring that both parties fulfill their contractual obligations and that the domain name is transferred securely.

This helps protect best interests of the buyer and the seller, ensuring a smooth and legally compliant transfer of the domain name.

Alternatives To Using Escrow

Attorney

A licensed attorney can draft a sales contract that is legally binding for buyer and seller. If any party breaks the contract, they can be sued for damages in court.

The attorney can also act as an escrow organization and only transfer money from the buyer to the seller if the terms of the contract are fulfilled.

An attorney is crucial in selling domain names to ensure all legal aspects are covered, and the transaction is secure.

Domain marketplace

There are many marketplaces where you can acquire domain names. Here, the marketplace acts as a custodian of the domain and only the seller transfers it to the buyer after payment is confirmed, which is then given to the seller.

Best Domain Name Escrow Services

Escrow.com

Escrow.com is the world’s largest online escrow service, and it has specific features for domain sales. The buyer can initiate the escrow request and provide the seller’s contact information for Escrow.com to get in touch.

The buyer transfers the agreed sum to Escrow.com, and it is only when they confirm the domain has been successfully transferred that Escrow.com will disburse the money to the seller.

Escrow.com charges 3.25% for deals between $0 and $5,000; 0.89% for deals between $5,001 and $25,000; and $162.5 + 0.25% for deals over $25,001.

Sedo Domain Transfer Service

Sedo is a popular domain name and website marketplace, especially useful for those looking to buy or sell domain names.

Its domain transfer service puts it as a middleman between the buyer and the seller. Sedo receives the payment from the buyer and the domain name from the seller.

When both ends are confirmed, Sedo transfers the domain to the buyer and the buyer sends the money to the seller.

This service incurs a 3% fee on the domain purchase price, with a minimum of $60.

Afternic

Afternic is another popular domain name marketplace focused on high-value domains. It offers an escrow service to protect both the buyer and the seller.

Afternic holds the agreed amount and only disburses it to the former owner or seller when the buyer has confirmed receipt of the domain. If either party breaks the deal terms, the sale will be canceled and the money given back to the buyer minus the escrow fee.

The drawback here is that Afternic doesn’t charge escrow fees separately. It takes a 20% fee, which includes both sales and escrow commissions on all domains listed on its platform.

Using an Escrow Service

It is necessary to use an escrow service if you are paying a significant amount for a domain name and it helps protect you and the seller. If you need guidance in the domain buying process, including escrow, contact us for help.

We have negotiated over $150 million in domain name sales and have over a decade of experience in domain name buying and transfers.

 

About the author

Joe Uddeme is Director and Principal of NameExperts.com, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Subscribe for More Domain Buying & Selling Advice

Related posts

Currency matrix for blog about the best places to buy and sell domain names.
The Best Places to Buy and Sell Domain Names

Last updated: 10 September, 2025. Got a domain name in your sights? Looking to sell one? Our domain marketplace comparison is just the ticket for anyone looking to buy or sell domain names – as Name Experts director Joe Uddeme explains.   If you’ve found yourself here, you’re probably exploring the world of domain marketplaces or checking out related options. These are online sites where you can buy and sell domain names, and it can be fun typing a name into one of these sites to see if it’s already been taken. What you’ll quickly find is that pretty much every great name is already owned by somebody else (check out our post on what to do when someone else owns the domain name you want). There is a vibrant international market in buying and selling domain names; they’re traded like shares and some go for millions of dollars. Plus, of course, many of the good ones are actually in use. The likes of carrentals.com were never going to be simply ‘parked up’ forever! If you’re looking to buy a premium domain name, a broker specializing in market research, negotiation and transfer services can save you a ton of time and money. But for more everyday transactions – those costing a few thousand dollars or even as little as 20 bucks – a domain marketplace is where you’ll do business. In this blog post, we’ll look at some of the pros and cons of some of the best domain marketplaces, including Flippa and Namepros. Key takeaways Even for a low-value sale or purchase, use a reputable service. When you get into five figures or more, consider using a domain broker. Big names like Sedo and Namecheap are as popular as ever. Check out our FAQ for tips on selling fast, buying expired domains and more.   1. Sedo Sedo is a dedicated domain marketplace (similar to GoDaddy) with millions of users. It has been around for over two decades, making it a trusted marketplace for buying and selling domains. Any domain name owner can sign up for free and list their domain for sale on the website, and prospective buyers can easily contact them through the platform to buy domains. If you need something memorable that you can hang your whole business on, check out Name Experts’ current premium domains for sale. On Sedo, sellers can set a fixed price for their domain, put it up for auction, or indicate that they’re entertaining offers with an unspecified price range. When buyers come to the site, they can search for any keyword and check if anyone has listed a related domain name on the market. If you’re in the market for a premium domain name costing upwards of $10,000, consider seeking out an expert domain name brokerage service. These can help you purchase a domain name at the best price – or sell one without leaving money on the table. Sedo Search Sample: When we typed in ‘bikes’, the first three results were bikes.org, bikes.co, and bikes.biz, which are premium domain names – although they currently get little traffic. Sedo also includes other domain names that are closely related to your search phrase to sell domains. The first two domains in this example have a Make Offer button next to them, while the last has a Buy It Now button for your popular domain. This indicates that the domain sellers of the first two domains put them up for auction, while the third domain’s owner set a fixed price for their marketing strategy. As a buyer, you’re free to search for any specific URL and find related domains listed on Sedo to find the perfect domain. Purchasing from the domain marketplace requires added registration and jumping through a few other hoops, but it’s worth it as Sedo has such a large selection of premium domains available for acquisition. Who it’s best for: serious name-hunters who want access to a vast pool of names. 2. NamePros NamePros is an online community for domain name owners to interact and discuss events related to the industry. In the forum’s early days, users commonly posted they had domain names available for sale and wanted to connect with potential buyers. Observing this, the owner of the forum launched an official domain marketplace section for buying and selling domain names. On NamePros, any registered user can list the domain names they have available in a forum post. To make the domains easy for prospective buyers to find, NamePros has formal categories that users can attach to their posts to find the perfect domain. How much is it worth? Namepros can also share pertinent details of recently sold domains that are similar in nature to your domain search. Domain name valuation is a complex area, so tread carefully! Because it is a forum, NamePros only helps buyers and owners find each other and it’s up to them to negotiate and decide how they’ll handle payments for the domain. This is unlike Sedo, which facilitates payments and domain transfers for its users among other services. When using NamePros to buy a domain you should be more careful about your purchase. Set specific terms with the seller before proceeding on any deal and use a trusted online escrow service (e.g. Escrow.com) to ensure that the payment goes through only after the seller has transferred the domain name to your preferred registrar. You can find a large variety of domain names for sale on NamePros, making it one of the best domain marketplaces in the world. Who it’s best for: industry players and those looking to strike up a relationship with fellow domain traders. It’s by no means the easiest marketplace to use! 3. Flippa Flippa is a marketplace competing with GoDaddy for buying and selling online properties, including websites and domain names. The platform has facilitated millions of dollars in domain name sales since its inception in 2009 and has built a reputation as one of the most trusted domain name marketplaces to find the perfect domain name. The most expensive domain name deal arranged on Flippa was StockPhoto.com, which sold for $250,000. Any domain name owner can sign up on Flippa and list their domains, but it requires a payment of $29 for a base listing and $99 for an enhanced listing. Sellers often pick the second option because it makes their domains more visible to potential buyers looking for a great domain name. As a buyer, you can create a free account on Flippa and find domain names matching your taste. You can then search for a specific keyword and find related domain names listed by domain owners to buy domain names based on cost, features and budget. Easy to use To demonstrate, we searched for “cars”. The first three results were OldCarsForSale.com, acars.com, and fastsportscars.com, listed for $5,000, $100, and $1 respectively. OldCarsForSale.com is a premium domain worth its higher price. It’ll be a very good domain for anyone who wants to sell used cars online without a specific destination. Check out our post on choosing a good brand name for some further thoughts on this. Fastsportscars.com seems like a good generic domain name, but it can easily be mistaken for fastsportcars.com, giving it a disadvantage. It’s likely why it’s listed for a very low price and shows that you can find a good deal on a domain name for personal use. When you’re ready to make an offer or buy a domain on Flippa, the platform handles the entire process for you. They have been around for over a decade and built a reputation on the internet as one of the most trusted domain name marketplaces to find the perfect domain name. Who it’s best for: anyone wanting to sell quickly (choose an enhanced listing for maximum visibility). 4. Namecheap Namecheap is one of the most widely-used domain registrars, serving over 2 million customers and giving GoDaddy a run for its money. It also has a premium domain marketplace as well as business resources and forum support for its customers. Popular domain names Namecheap has an internet marketplace where domain name owners can connect with and manage potential buyers. Only domain names registered on Namecheap can be listed for sale, however, and owners can list their domain names at a fixed amount or put them in auctions. If a seller lists their domain at a fixed price, you can purchase it immediately, just like you would purchase a new domain on Namecheap. Auctions If the seller puts their domain up for auction, you’ll have to participate in a timed bidding process if you want to try and secure it. If you’re the one doing the selling, Namecheap collects a 10% commission on each sale. You must have a Namecheap account to buy domains from its marketplace and after buying any domain it is automatically transferred to your control. The convenient sale process makes Namecheap one of the easiest domain marketplaces to use over other domain marketplaces. Who it’s best for: amateurs and serious pros – Namecheap has something for everyone. 5. Atom.com (formerly Brand Bucket) Each premium domain is carefully reviewed by branding experts to ensure it meets high standards of originality, pronunciation, and memorability when selling domain names. This makes Atom.com a little different in the domain marketplace arena. Names often have five- or even six-figure asking prices. Visual Identity Package Every premium domain listing includes a professionally designed logo for your organization, providing a cohesive domain brand package that helps with your company identity. User-Friendly Search and Navigation Advanced filtering lets you search domains by industry, point, style, length, and other attributes to find the perfect match. Who it’s best for: anyone looking for a brandable premium name. They even mock up logos for available domains to give you a taster for what’s possible.   FAQ About the Domain Name Marketplace   Where can I sell my domain name fast? If you have a good name available and want to raise funds quickly, you can quickly sell it any of these marketplaces. A large platform such as SEDO, GoDaddy, Afternic or Namecheap offer great options for buying domains quickly – and also boast a fast transfer process.   How fast do domain names sell? Domain names take anywhere from hours to days, months, or years depending on the demand for them. The amount the domain is listed for also plays a role in how quickly it will sell. If the price is too high relative to its value, there may be no interest from buyers, especially for a premium domain. If a domain is listed on the wrong marketplace, it may not sell, too. We recommend using a large marketplace like GoDaddy. Check out our post about domain flipping for some extra tips.   Where do I buy expired domain names for sale? Many domain registrars host auctions for expiring domain names, including GoDaddy, Namecheap, and Network Solutions to buy domains. There are also websites specializing in auctioning expired domains, such as ExpiredDomains and DropCatch market services for other domain name sales on non-active domains. Domain brokers can help too. They can also help you buy names that are currently owned by someone else – even those already in use, if the price is right.   How can I build or develop my domain? Select a registrar, choose and pay a hosting company to host the domain, and sign up for a web builder interface to develop the site. WordPress or Wix are popular, though Wix is easiest to use if you have no experience. GoDaddy also offers a turnkey solution for your company’s development to make launching online worry free.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Man and woman in business setting look at a laptop screen. Woman is blonde, man has brown hair and both have glasses
Are You A Domain Buyer? Here’s How It Works

Whether you want to buy names to sell straight away or hold them in your portfolio, there’s a lot to learn if you want to be a big-hitter in the domain buying and selling world. Domain name expert Joe Uddeme shares his top tips for domain buying success.   Both buying and selling domains can be an exciting adventure – and it can even be a profitable endeavor. If you’re trying to get into the domain-buying game, or are simply looking for someone to buy a domain you want to sell, you need a little more information about how it all works. The actual odds of you cashing in big amounts of money from your domain aren’t high (unless you’re sitting on a desirable two- or three-letter domain name that isn’t currently in use). But if you have no idea what you’re doing, you might also be wasting time and money. If you want to make it big, you need a tried and true process to help guide you. This post covers our top tips to help you find a domain buyer or to be a domain buyer – and insert yourself into the domain buying and selling game the right way. Key Takeaways The importance of research when buying and selling domains Understand your audience Promote your domains to attract the right buyer How a domain broker can help Domain Buyer Tips Though the internet isn’t very old in real terms, there are already millions of domains already registered. And yet there’s still an endless amount of combinations available to register. That’s not even including the hundreds of new domain name extensions available (think .net, .club, .ai and so on). Do A Little Research – Get Focused The first thing we recommend is to do a little research before you get started. If you’re looking to buy a domain, start with what you already know. What are you already an expert in? Buying the right domain is much easier when you have a knowledge of the industry so that you choose something that will 1) actually sell, or 2) be a great domain for your business. If you know fishing, for example, you’ll know just the things your fellow marlin hunters will be searching for. Is there a domain name available that fits? Start your domain name search based on keywords related to the things you’re familiar with. If you KNOW it’s going to be valuable, it will be much easier to sell. Check the strength of a keyword with tools like Google Trends or Keyword Planner or similar SEO tools. We highly recommend working with a domain broker who knows the marketplace. They’ll be able to give helpful suggestions and help you avoid costly mistakes. We do NOT recommend targeting a prospective domain buyer based on their potential economic status. Targeting a certain demographic that you don’t know anything about could be an expensive error. You might also be missing specific rules associated with the industry you’re going after. The bottom line is, you won’t make any money if your buyers can’t use the domain you bought. Know Your Audience If you understand your audience, you’ll be able to really generate sales of domains you buy. If you’ve got a great domain, you can hold onto it for years and probably make a decent profit. Maybe you’ve already monetized the domain with an active website and put in some great SEO efforts – things that can help make your domain worth a lot more to a potential domain buyer. These types of well researched domains can end up paying for themselves. Talk to a domain broker. The industry’s big-hitters will have the knowledge you’re looking for and be able to steer you in the right direction for domains that will actually benefit the buyer. Domain Seller Tips Evaluate Your Domain It is so important that you actually have access to domains that would be a valuable asset to domain buyers. Put yourself in the buyer’s shoes. Would the domain name you’re selling actually be beneficial to a business or organization? Similarly, if you’re the one buying, have a domain broker assess the value of the potential domain. Would having this domain make it easier for clients to find you? Will having that particular domain make it easier to rank higher on search engines? Would your profits increase based off of this particular domain name? Don’t buy anything without knowing its true value. Get Your Domains Out There There are many different avenues for getting your domains out to potential domain buyers. Again, we suggest doing a little research. If you’re using a respected source, you’ll have a much better chance of getting your domains sold. The best suggestion we have is to work with a sell-side domain name broker who knows the market. You can also use a distribution network to make sure you’re getting the right domain in front of the right buyer. Maybe you already know who might benefit from the domain name? Start a conversation and convey that you already understand what the domain is capable of achieving. However, if you don’t already have a place to show off your domain, partnering with a domain buying and selling brokerage business will take the pain out of everything and increase your chances of a profitable sale. Choosing the right broker If you’ve purchased one or more premium domain names and want to sell them, why leave anything to chance? Working with a broker who spends every day in the market is the way to go. Not only do they buy and sell millions of dollars worth of domains every year, they also have a network already established. They might have a long list of buyers and sellers lined up before you even set up a meeting. Domain brokers are able to accurately assess the value of potential domains, and also help negotiate on your behalf. They also know all the paperwork and legal processes that come with buying and selling domains, which means that you don’t have to worry about any of it. Look for one with a strong track record, ideally one that can demonstrate experience in high-level transactions. Global experience can be helpful, too, especially if you want to secure the international TLDs for a specific name.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Default alt text
How To Choose a Business Name – An Expert Analysis

To make their first dollar, most businesses have to settle on a name for their organization. Here’s how to choose a business name that will last you well into the future.   Before you’ve hired the accountant, bought the office chair or spent 20 bucks on some gold-plated business cards, you need a name for your business. Get it right, and your business name will be an asset that will: Send out a clear message about your brand Be memorable – for all the right reasons Encourage customer loyalty Grow with you Get it wrong, and you’ll be stuck with a name that could cost thousands or even millions to fix. In this article, we’ll look at the elements of a great business name, the reasons why getting it right is worth so much effort, why buying a domain name for your new brand is essential – and more. There are even links to a few tools you can use that will help you get your business name deliberations off to a strong start. Why take my word for what makes a good business name? Because names have been my bread and butter for almost two decades. I help businesses buy premium domain names when they want to launch a new company or sub-brand. When you oversee domain name transactions that sometimes run into six and seven figures, you get to see first hand just how valuable a great name is. Key takeaways A great business name will be an asset for years to come Matching up your name, logo and brand identity requires serious attention Choose between catchy or quirky Make sure you can secure a domain name so your online customers can find you  

Why Work with Name Experts

Name Experts offers personalized domain brokerage services, assisting clients in buying or selling premium domain names with expert appraisal, negotiation, and complete transaction management while ensuring confidentiality.

Some of our most
successful stealth acquisition and sales

Aid.com

Fit.com

Mine.com

GLD.com

Jeff.com

Fora.com

Nori.com

Secure.com

Guitar.com

F*ck.com

Radian.com

MetaData.com

Prize.com

Link.com

Loop.com

Programs.com

Claim.com

Quince.com

Hook.com

QXO.com

NQ.com

Rest.com

Humani.com

Max.com

Need help buying or selling premium domains?