The Escrow Process for Site Flips

If you are going to make money buying and selling websites you need to be familiar with the Escrow process. Escrow helps protect both the buyer and the seller from being scammed during a site flip. I would never be comfortable selling a site for a lot of money without the services of Escrow.com to ease my mind.

It’s too easy to get away with fraudulent transactions during the sale of website if you don’t have a 3rd party such as Escrow to help protect both sides. Nothing can guarantee you won’t get scammed out of your money or site but Escrow does greatly reduce the risk. It’s probably not worth using for a small site flip transaction but when you start getting into thousands of dollars it is more than worth it.

A lot of site flippers don’t use them because they don’t know how it all works. I know I was nervous the first time I used them but honestly it’s not difficult at all.

Here is the (very easy) Escrow process so you know what it is ahead of time and you can put your fears to rest…

1) Seller or Buyer initiates the transaction

This basically just gets the ball rolling. You set the terms of the sale and other information about it. Either party can initiate it but as the seller I always like to do it. That way it’s just one more thing I am in control of to help prevent a fraudulent buyer from getting away with anything. I don’t really think it matters either way, but it does make me feel better if I am the one initiating the transaction. If you are flipping websites the choice is yours but I recommend being the one to initiate the Escrow process just in case.

2) Buyer and Seller Agree to Terms

Both parties agree to terms of the transaction set in step one above. This includes a description of the merchandise, sale price, number of days for the Buyers inspection, any shipping information, and so on.

3) Buyer Sends Payment to Escrow.com

The Buyer submits the payment by check, money order, wire transfer, credit card or Paypal. Escrow verifies the payment to ensure its validity and either approves or denies it. If they approve it then you move on to the next step.

4) Seller Transfers Domain and Site to Buyer

Upon payment verification, the seller transfers the domain name to the buyer. Escrow verifies that the domain name is transferred to the buyer then notifies both parties of the next step.

5) Buyer Receives Domain and Site

The buyer has a set number of days for inspecting the website and is given the option to accept it or reject it if they find the seller misleading them or whatever. The number of days for inspection is set in the terms of the transaction when it is initiated. Usually it’s set at around 3-5 days. If the buyer accepts it then you are pretty much done.

6) Escrow Pays Seller

Escrow.com pays the Seller by check, ACH or wire transfer and the transaction is complete.

As you can see, it’s fairly simple and straightforward. Also, I have pasted the exact Escrow history of a recent site flip I did below so you can see exactly how it went and how long it took.

* Apr 30 – 7:40PM PDT
Seller initiates the transaction

* Apr 30 – 7:46PM PDT
Both parties have accepted the offer, awaiting buyer payment.

* May 1 – 5:29AM PDT
Buyer selected option to pay by wire transfer, Escrow.com waiting for payment to arrive.

* May 1 – 9:44AM PDT
Escrow.com approves payment.

* May 1 – 2:13PM PDT
Seller submitted transfer for domain.

* May 2 – 5:12AM PDT
Buyer received merchandise. Inspection period starts.

* May 2 – 5:12AM PDT
Buyer accepts merchandise, transaction complete.

* May 4 – 8:33AM PDT
Funds disbursed. Final closing statements sent to both parties.

That’s it. The process took five days from start to finish and there were no problems. This was for a very well-established and highly profitable website so using this service definitely helped me sleep at night, even though I was still nervous until the money was safely in my bank account.

Using the Escrow service isn’t free because they do take a percentage of the sale but it can be more than worth it to save you from losing a lot more money, or a site you worked very hard on, to a scam artist. As I said above, if you’re only dealing with a fairly small site flipping transaction that you wouldn’t necessarily be crushed over if you got scammed then it might not be worth the time or the fee of using Escrow. But when you start getting into the thousands of dollars range, you really should use them!

No related posts.

Tags: buying and selling websites, escrow, flipping websites, site flip, Site Flipping

Category: Blog Flipping, Make Money Online, Website Flipping