An escrow is an amount retained by an escrow provider for a certain period of time. This is done through an escrow account managed by a so-called escrow agent, a neutral third party. Only if an agreement between buyer and seller is fulfilled, the money in the seller's account is paid out by the escrow agent. Most domain name sales these days see the use of such a construction.
Buyers and sellers contacted through the Tappaya platform have the option of carrying out the transaction themselves, or using Tappaya's escrow service for this purpose. When opting for our escrow service, we as an independent escrow provider will set up the transaction process as follows, to ensure a secure transaction:
Step 1. The deal is confirmed to us including contacts on buyer's side and seller's side.
Step 2. We ask the seller to provide us with the authorisation code(s) of the relevant domain(s) and to send us the corresponding invoice for the buyer.
Step 3. We then submit the payment request to the buyer and move the relevant domain name(s) to our own management.
Step 4. Once the domain is under Tappaya's management, we inform the buyer that the domain is in escrow and the invoice can now be paid to the seller.
Step 5. Now the seller needs to confirm receipt of payment. Once this is done and we have received confirmation of this, we release the authorisation code to the buyer. The buyer is requested to move the domain within 5 working days and put it in his own name.
With the completion of step 5, the transaction is complete.
The cost of the escrow service is shared between buyer and seller. If the purchase was made via Tappaya, both parties pay €99 (excluding VAT) for the secure processing of transactions up to €10,000. For transactions above this amount, both the buyer and the seller each pay 1% of the total transaction amount. If the purchase was not made via Tappaya, we charge 5% to the party using the escrow service, with a minimum of 299 for local transactions.