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.

Morgan Linton

Morgan Linton