Buying a domain name with Escrow

Using Escrow to buy a domain name is the preferred solution for securing the purchase and sale of domain names.

Escrow? The name has a bad ring to it for French speakers. How many times have we sensed a moment of doubt on the part of domain name buyers when we tell them: “ Don’t worry, the 10,000 euros are secured on Escrow.com “. With each new account manager at our bank, it’s the same moment of panic when we have to confirm the transfer to Escrow.

So, no. Escrow is not a company of crooks. On the contrary! Escrow is a trusted escrow service. In the event of a domain name buy-back, it retains the funds for the buy-back amount and only releases them to the seller once a specified condition has been met.

In this case, the transfer and change of ownership of the domain name sold is often involved.

In this article, we’ll show you what it’s like to use the services of Escrow, a company based in San Francisco, USA.

Escrow domain name redemption process

Here’s how a domain name buyback transaction works at Escrow.

  1. Create an account at www.ESCROW.com.

Both parties (buyer and seller) create a free account with Escrow. Most corporate domain name registrars, such as Solidnames, already have an account with Escrow.

  1. The buyer (or his representative, in particular Solidnames) creates a transaction on Escrow.com for the purchase and transfer of the domain name to be purchased.

In this step, you are reminded of the domain name, whether it is being sold with or without content, the transaction amount and currency, the maximum inspection period, and the seller’s e-mail address.

When creating the Escrow transaction, you must also specify who pays the Escrow.com fees. As a general rule, the buyer pays all Escrow fees. However, each party may pay 50% of the Escrow fees. More rarely, the seller may pay the Escrow fees. Fees vary according to the amount of the transaction, see below.

  1. The seller accepts the terms and conditions of the Escrow.com transaction.

Sending transaction money to Escrow

  1. The buyer finances the transaction on Escrow.com.

In order to pay Escrow, the buyer or his representative such as Solidnames will pay the escrow platform. This can be done via a PayPal account or bank transfer.

Most registrars, such as Solidnames, use bank transfers as a means of payment. Escrow takes an average of 24 hours to pay for a domain name in euros. Escrow has a bank account in the UK, enabling them to receive funds quickly.

When the domain name is purchased in dollars, the transfer is made to Escrow’s American bank. As a result, the time between the issuing of the transfer by a European bank and its receipt by Escrow is longer. It takes between 3 and 5 working days.

  1. Escrow.com confirms to both parties that the funds have been received and secured, and asks the seller to transfer the domain name to the buyer.
  2. The seller unlocks the status of the domain name (“UNLOCK”) and often sends the authorization code (“AUTHCODE” ) to the buyer by e-mail.

Transfer of domain name purchased on Escrow

  1. Using the “AUTHCODE”, the buyer initiates the transfer to the registrar of his choice.

In the special case where both parties use the same registrar, there can be a simple account-to-account transfer to the same registrar.

  1. Transferring a domain name takes between 5 and 8 days, depending on the Internet extension. It takes five days for generic extensions like .COM. For .FR, the transfer takes eight days.

Many registrars allow outgoing domain name transfers to be accepted in advance. However, some major registrars do not. This is particularly true of OVH.

  1. Once the domain name transfer is complete, the buyer confirms that he/she has control of the domain name. On Escrow.com, he/she will “accept the merchandise” and “accept the transfer of the domain name”. By validating these two steps, the buyer authorizes the release of funds secured at Escrow.com to the seller’s account.
  2. Completed. The transaction is finalized. The buyer must remember to update the domain name holder. For security reasons, Solidnames recommends re-locking the domain name and changing the authorization code.

The domain name expiration date is one year longer than the previous expiration date.

How much does Escrow charge for buying a domain name?

Escrow is widely used by domain name professionals because of its low fees.

Escrow fees are often paid by the buyer. They are 3.25% for redemptions under $5,000. For domain name purchases between $5,000 and $25,000, the Escrow fee is 0.26% of the amount over $5,000, plus $162.50. Finally, Escrow fees for purchases over $25,000 are 0.89%, see illustration below.

Escrow fees Domain name

Escrow fees for domain name redemption

A free Escrow fee calculator is available here.

While Escrow is recommended for securing the purchase of a domain name, there are other solutions. In fact, the role of third-party escrow agent is fulfilled by the main platforms for buying and selling domain names. Afternic and Dan (both part of the GoDaddy group) or Sedo include this escrow service as a specialized platform for the secondary domain name market.

Finally, a domain name purchase/sale contract is also possible between the transferor and the transferee.

Finally, there is the special case of NFT domain names such as .ETH. Transactions for these decentralized domain names operate differently.