If you’ve ever bought something expensive over the Internet, you’ve probably heard of Escrow.com. Escrow.com is but one of the numerous escrow services available which ensures that both the buyer and the seller are happy with the final outcome at the end of an online transaction. Because Escrow.com is currently the most popular escrow service, it will be the covered exclusively in this post — this doesn’t mean there aren’t other good escrow services out there, however Escrow.com is a safe bet for online purchases of almost any kind. Most escrow services operate in a relatively similar fashion, so once you understand how to use Escrow.com, you should have a pretty good idea of how to use other escrow services as well. Be careful of fake escrow companies and always remember that just because an escrow service is being used does not mean you should let your guard down. While using an escrow service significantly reduces the risk of you getting scammed, it does not eliminate the possibility for digital goods or counterfeit goods (unless you detect it during your inspection period and make this known to Escrow.com).

Beginning an escrow transaction involves first creating an escrow account — in this case, one at Escrow.com. Once that’s done, log into your Escrow.com account, indicating which type of escrow transaction you’d like to begin.  Follow the instructions carefully laid out on the screen for your escrow transaction. You’ll need to enter a name for the escrow  transaction, along with the total price to be paid. Before proceeding, discuss with the other party who will be responsible for the escrow fees. Regardless of whether you’re using Escrow.com or another online payment processor, labeling your escrow transaction as precisely as possible will help your prove your case in the event a dispute arises. Prior to agreeing to the Escrow.com transaction, be sure you’re comfortable with the Terms associated with the escrow transaction. If unsatisfied with the default Escrow.com contract, consider drafting up your own contract for use. This will of course need to be agreed upon by both parties.

Once you’ve agreed to the terms of the escrow transaction, an email from Escrow.com will be sent to the other party letting them know that an escrow transaction has been setup through Escrow.com. They’ll be asked to login to their Escrow.com account or create one at this time and agree to the terms of the Escrow.com transaction.

Once the terms of the escrow transaction have been agreed to by both parties, the buyer will be prompted to pay for the purchase. This is generally done by credit card, Paypal (requires both the buyer and seller to be from the United States) or wire transfer. The buyer can also choose to submit payment by check or money order drawn upon a U.S. bank, however this will result in an approximately 2 weeks delay – a 10 business day hold plus transit time.

Once payment is received by Escrow.com and confirmed “good funds”, Escrow.com will ask the seller to deliver the goods to the buyer. Depending on whether it is a tangible or intangible good, Escrow.com may require that you transfer the goods to Escrow.com who will then transfer it to the buyer. In the event of the sale of an intangible good (domain name, ebook, software, etc), make sure you’re transferring the goods to the address which matches exactly the Escrow.com account information listed for the buyer. Once you’ve transferred the goods to the buyer, login to your Escrow.com account and indicate that you’ve done this, following instructions given to confirm that this has been done.

Escrow.com will now start the Inspection Period, during which time the buyer will need to verify that he has complete control of the goods and possibly that they are genuine. Regardless of whether you’re using Escrow.com or another online payment processor, be sure to do your homework as you always should when buying and selling goods online to people you don’t know. Research the person you’ll be doing business with (eg. do a search to see what appears to be their real name, social network or forum username, email address, etc) and consider contacting both them and people they’ve done business with in the past if you’re able to find that information.

Before the end of the Inspection Period or once completely satisfied, the buyer must login to his Escrow.com account and either accept or reject the goods involved in the escrow transaction. Should the buyer do neither, Escrow.com will begin a second Inspection Period – at least that’s been my personal experience when this has happened to me, however there’s no documentation on the Escrow.com website about what happens under such a scenario. Provided you can prove the transfer of ownership has taken place, Escrow.com will eventually release the funds should the buyer remain unresponsive and your able to prove you delivered the goods.

With  domain transactions, some buyers have attempted to manipulate the fact that Escrow.com is not a true  escrow service by  modifying the whois information to make it look as if the  transfer never took place, despite having received the domains. Take a screenshot (Print Screen) of the whois immediately upon transfer of the domainss and keep all emails from the buyer, Escrow.com, and your registrar regarding the status of all domains involved in the  escrow transaction until it’s been completed and you’ve received payment. DomainTools offers a  History service which documents historical whois changes and may help you prove your case.

If the buyer rejected the goods during the Inspection Period, he’ll have to return them to the seller. As knowledgeable as the staff at Escrow.com are, nobody watches out more for you than yourself –make sure the Escrow.com staff are kept up to date on the status of things and ensure they don’t refund the buyer prior to you receiving your goods back.

Upon the buyer accepting the goods, Escrow.com will review the escrow transaction and send payment to the seller via the payment method chosen. You may phone Escrow.com at any time prior to the conclusion of any Escrow.com transaction should you change your mind and prefer to be paid via a different payment method.

Escrow.com allows both buyers and sellers to begin escrow transactions. Escrow transactions involving a large number of goods can be done through Escrow.com by faxing them a list of the goods to be included in the escrow transaction. Escrow.com does not cover goods which were fraudulently obtained and sold through their escrow service — if you choose to keep the goods once the Inspection period has ended, Escrow.com’s role in the escrow transaction has been completed.

Note: Fake escrow companies outnumber real ones. A seller might pretend he’s trying to safely conduct business, however he might be trying to scam you through a bogus escrow company. If for whatever reason you can’t use Escrow.com, do some research to make sure the seller is recommending a reliable escrow company. I’ve never heard of there being problems with Escrow.com however.

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