3 Reasons to Use Third Party Escrow Service When Selling With Brokers
Domain brokers are an important part of the domain industry, and there are many fantastic brokers whose dealmaking skills bring revenue to domain owners. When using a broker or brokerage service though, I recommend using a third party escrow service such as Escrow.com, Afternic’s escrow service, or Sedo’s escrow to be an intermediary, and I’ll share a few reasons why this might be a wise idea.
Keep brokers honest
I’ve heard stories about brokers allegedly taking money off the top when closing deals on behalf of domain sellers. For instance, if I told a broker I want $50,000 for ElliotsBlog.com and a broker tells me he has a $40,000 offer, if he’s in the middle of the deal, he might actually have sold it for $50k and pocketed the remainder. If you work with a third party, the sales price will be transparent.
Ensure swift payment
After I transfer a name to a buyer or to a broker, I expect to be paid ASAP. There would be no reason for the broker to keep the buyer’s funds any longer than it takes to set up a wire transfer online (or get to the bank to do it in person) once the domain name is transferred to the buyer. With a third party escrow service, once the domain name is in the buyer’s possession, your funds are released.
Licensed, insured, and bonded
Generally speaking, US-based escrow services are licensed by state regulators, insured, and bonded. You don’t have to worry about them running off with your money and your domain name. When dealing with an unprofessional broker, you may give up the domain name and not receive the funds and you don’t have much leverage, especially if they aren’t based in the same jurisdiction as you (and litigation is probably very expensive).
I don’t see why a domain broker would have an issue using a third party escrow service to facilitate a domain sale. If they are concerned about their commission payment, you can ask them to have the buyer pay that directly and take it out of your payment.
Using an escrow service makes for a cleaner transaction and can ensure fairness for all parties.
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