Domain escrow: how the money and the name change hands safely

A domain sale is an awkward trade. The buyer holds money the seller cannot see. The seller holds an asset the buyer cannot inspect beyond a WHOIS record. Neither party wants to move first, and for good reason: once money leaves a bank account or a domain leaves a registrar account, getting it back is slow, expensive, or impossible.

Escrow solves this by inserting a licensed third party who holds the funds while the name moves, and only pays out once the buyer confirms control. Nobody goes first. That is the whole idea, and it is why almost every domain sale above a few hundred pounds runs through one.

The sequence, step by step

A typical escrowed domain sale runs like this:

• Terms agreed. Price, currency, who pays the escrow fee, whether the name transfers to a new registrar or stays put, and any extras (social handles, logo files, existing traffic redirects).
• Escrow opened. One party starts the transaction; both parties verify identity. Expect ID checks and, for larger sums, source-of-funds questions. This is regulatory, not optional.
• Buyer funds the escrow. Card, bank transfer or wire, depending on size. The money sits with the escrow agent. The seller can see that it has arrived but cannot touch it.
• Seller releases the domain. Either by unlocking it and issuing an authorisation code, or by pushing it to an account the buyer controls at the same registrar.
• Buyer confirms. The buyer logs in, sees the domain in their own account, and confirms receipt. There is usually an inspection window of a few days.
• Funds released. The escrow agent pays the seller, minus fees.

On Names.com, transfers on marketplace sales run through escrow by default, so neither side is asked to pay or transfer first. Sellers pay a 15% commission on a completed sale only. Buyers pay no marketplace fee.

How the name actually moves

There are two mechanisms, and the difference matters for timing.

Registrar push (same registrar)

If buyer and seller both hold accounts at the same registrar, the seller can push the domain internally. This is the fast path: often minutes, occasionally an hour or two. No authorisation code, no 60-day waiting periods, no risk of a transfer request timing out. If you are buying a name held at a registrar you can easily open an account with, ask for a push. It removes most of what goes wrong.

Registrar-to-registrar transfer

If the buyer wants the name at their own registrar, the seller unlocks the domain, disables any transfer protection, and provides the EPP or authorisation code. The buyer initiates the transfer at the gaining registrar. The losing registrar then has up to five days to release it, though many release faster if the seller approves it manually.

Two rules trip people up. First, ICANN imposes a 60-day transfer lock after a change of registrant on most gTLDs, and after a previous inter-registrar transfer. If the seller recently bought the name or updated the owner details, it cannot leave the registrar for 60 days. This is not obstruction; it is policy. The workaround is a same-registrar push, which the lock does not block. Second, expiring domains complicate everything. If the name is within 30 days of expiry, ask the seller to renew before the sale. A renewal adds a year and removes the deadline pressure.

What escrow costs and who pays

Standalone escrow services typically charge somewhere in the region of 0.5% to 3% of the transaction value, with the percentage falling as the deal size rises and a minimum fee of roughly £10 to £25 on small transactions. Wire transfers may add a fixed bank charge at either end. Card payments usually carry a higher rate than bank transfer, because the escrow agent is absorbing chargeback risk.

Convention in the domain trade is that the buyer pays the escrow fee, or the two sides split it. It is negotiable and it is small relative to the purchase price, so it is rarely worth arguing about. What is worth checking: whether the quoted price includes the fee, and which currency the escrow account settles in. A 2% swing in the exchange rate on a five-figure name costs more than the escrow itself.

On a marketplace transaction, escrow handling is generally folded into the platform's process rather than billed separately. If you are buying a category killer domain name at a five- or six-figure price, confirm in writing what the buyer's total outlay is before funding.

Instalments, leases and holding structures

Not every deal settles in one payment. Two structures are common, and they change how escrow works.

Instalment purchase. The buyer pays over 12 to 60 months and takes ownership at the end. During the term the domain sits in a controlled account — either the escrow agent's or the marketplace's — with the buyer holding delegated control of the nameservers. That means you can point the domain at your site and start building on day one, while the registrant record only changes hands after the final payment. Miss payments and you lose access, typically after a defined cure period, along with what you have already paid. Read that clause specifically.

Lease. You pay monthly for use of the name with no ownership transfer, sometimes with a purchase option at a fixed price. This suits testing a brand before committing capital. It also means your entire domain, and every backlink pointing at it, depends on a contract you do not own. If you go this route with a keyword domain on monthly payments, negotiate the buyout price up front rather than leaving it to a later renegotiation when you have more to lose.

Where deals go wrong, and how to prevent it

• The seller cannot be verified. Escrow agents run KYC on both sides. A seller who stalls on identity checks is the single loudest warning sign in the process.
• The registrant is not the person selling. Ask for proof of control before funding: a temporary DNS TXT record at a string you specify is quick, free and conclusive.
• Off-platform payment requests. Any suggestion to move to direct bank transfer, a payment app, or crypto "to save the fee" should end the conversation. This is the most common domain fraud pattern there is.
• Transfer locks nobody checked. Confirm the domain's status codes before agreeing timelines. clientTransferProhibited is normal and removable; a 60-day registrar lock is not.
• Silence during the inspection window. Buyers sometimes forget to confirm receipt. Most escrow agents auto-release after the window closes, which is fine if the domain arrived and a problem if it did not. Confirm actively.
• Extras that were promised verbally. Social handles, trademarks and email archives are not part of a domain transfer unless the escrow instructions say so. Write them into the terms as release conditions.

A short pre-funding checklist

• WHOIS or registrar record matches the seller's verified identity.
• Expiry date is more than 60 days out, or the seller has renewed.
• You know whether it is a push or a transfer, and the expected timeline.
• The escrow instructions name every asset in the deal, not just the domain.
• You have checked the name for trademark conflicts in your sector — escrow protects the transaction, not your right to use the brand.
• Total cost, including fees and currency conversion, is agreed in writing.

If a name is still at the shortlisting stage rather than the negotiation stage, sort out availability and alternatives before you get near an escrow form. A keyword domain finder will tell you quickly whether the name you want is for sale, already registered and dormant, or genuinely open. Escrow is the last mile of a domain purchase. It should be the least dramatic part.