The problem escrow solves
In a private domain sale, whoever moves first carries all the risk. Pay before the transfer and the seller can simply keep the money; transfer before payment and the buyer can keep the name. Neither party has recourse worth using, because the sums are usually too small to litigate across borders. An escrow service holds the funds while the transfer happens, so neither side has to trust the other.
How the process runs
One party opens a transaction and both agree the terms — the domain, the price, who pays the fee, and the timeframe. The buyer deposits funds, and the service confirms receipt to the seller. The seller then unlocks the domain and initiates the transfer, or pushes it to the buyer's account at the same registrar. The buyer confirms the name has arrived and is under their control. The service releases the funds, minus its fee.
What it costs and who pays
Fees are typically a small percentage that decreases as the transaction size rises, with a minimum charge on small deals — which means escrow is proportionally expensive on a $200 name and negligible on a $50,000 one. Convention is to split the fee, but it is negotiable and often absorbed by whichever side is keener. On low-value names, using a marketplace that includes escrow in its commission is usually cheaper than a standalone service.
Check the transfer lock before you deposit
This is the most common avoidable delay. A domain cannot be transferred between registrars within sixty days of registration, or within sixty days of a change to the registrant details. If the seller recently acquired the name or updated their contact information, the transfer will be refused and the escrow will sit open. Ask the seller to confirm the domain is unlocked and outside any lock period before funds are deposited.
Push versus transfer
If both parties hold accounts at the same registrar, an internal push moves the name in minutes and avoids the transfer lock entirely — it is faster and less error-prone, and worth arranging where possible. A registrar-to-registrar transfer requires an authorisation code and typically takes up to five days, during which the name is in transit. Neither is risky under escrow, but the timelines differ materially and buyers should know which one they agreed to.
Do not confirm until it is genuinely yours
The second failure point is releasing funds too early. Confirm the domain appears in your own registrar account, that you can change its nameservers, and that the registrant details are yours. A domain that has been pushed but not fully reassigned can look present while remaining under the seller's control. Once escrow releases, your protection is gone, so verify properly rather than politely.
When to skip escrow
Two cases. Where the sale runs through a marketplace that already holds funds and manages the transfer, adding a separate escrow duplicates the protection and the cost. And where the transaction is small enough that the minimum fee is a meaningful share of the price — though in that situation the honest answer is usually to buy through a marketplace rather than to accept the risk unprotected.
- Escrow exists because both sides of a private domain deal have to go first.
- Confirm the domain is outside its 60-day transfer lock before depositing.
- An internal push at the same registrar is faster and avoids the lock.
- Verify the name is in your account and under your control before releasing funds.
Namecheap runs a domain marketplace alongside the registrar, so you can list a domain for sale, park it for ad revenue, or grab the next one cheaply.
Browse Namecheap