# What does domain escrow cost on a $10,000, $100,000 and $1 million sale? On an illustrative schedule, domain escrow costs $250 on a $10,000 sale, $1,800 on $100,000 and $12,000 on $1 million. Buyer, seller or both pay it. --- Domain escrow costs a percentage of the sale price that falls as the price rises: on the illustrative fee schedule used in this article, $250 on a $10,000 sale (2.5%), $1,800 on a $100,000 sale (1.8%) and $12,000 on a $1 million sale (1.2%). Who pays is not fixed by any rule. The buyer, the seller or both pay the fee, according to what the two of them agree before the transaction is opened, and the three usual choices are buyer pays, seller pays, or split 50/50. Those three figures come from a schedule built for this article, so that every calculation below can be followed line by line. It has the shape of the schedules that online escrow services publish, but it is not the price list of any provider, and the fee on your own sale is the one your chosen service quotes. Rates, minimums and surcharges differ from one service to the next and change over time. The fee is also only one line of the settlement. A wire charge, a currency conversion, a broker's commission or a marketplace commission, and tax all sit around it, and on a large sale several of them weigh more than the escrow fee itself. The sections below take each of them in turn, on the same three prices.
6.25%what a $50 minimum fee represents on an $800 name, against a 3% headline rate
$1,250flat fee on any price from $50,000.01 to $69,444, where the tier minimum applies
$8,439.65cost of a 1% currency spread on the proceeds of the $1 million sale, more than the seller's $6,000 half of the escrow fee

Worked examples on the illustrative fee schedule and assumptions set out in this article, not any provider's rates.

## How is a domain escrow fee structured? A domain escrow fee is a percentage of the sale price, set by price bands whose rate falls as the price rises, with a minimum fee in each band. Around that core, a service may add a surcharge for the payment method, charges for the wires it receives and sends, and a higher rate for optional services such as a concierge transfer or a holding period. Five elements are worth reading on any fee page before you agree a price. - **The rate by band.** The percentage applies to the whole sale price, not band by band the way income tax works. A sale that lands in the third band pays the third band's rate on every dollar. - **The minimum fee.** Each band carries a floor. In the lowest band the floor protects the service on very small sales. In the higher bands it stops the fee from dropping when a price crosses into a cheaper band. - **The payment method.** A wire is the standard way to fund a domain escrow. Cards and wallet payments, where they are offered, cost more and are capped at small amounts. - **The service level.** A standard transaction has the seller move the name to the buyer directly. A concierge or holding service puts the escrow service itself in the chain of custody of the name, and is priced accordingly. - **The currency.** The transaction is opened in one currency. Anyone whose bank account is in another currency pays for a conversion somewhere, usually at their own bank. Here is the illustrative schedule used for every calculation in this article. | Sale price | Illustrative standard rate | Minimum fee | | --- | --- | --- | | Up to $5,000 | 3.0% | $50 | | $5,000.01–$50,000 | 2.5% | $150 | | $50,000.01–$250,000 | 1.8% | $1,250 | | $250,000.01–$1,000,000 | 1.2% | $4,500 | | $1,000,000.01 and above | 0.9% | $12,000 | For comparison with a real price list: the published fee page of a large online escrow service lists, for a standard transaction, 2.4% on prices from $5,000.01 to $50,000, 1.9% from $50,000.01 to $200,000 and 1.2% from $500,000.01 to $1,000,000, each band with its own minimum. Applied to the three prices of this article, those published rates give $240, $1,900 and $12,000. The illustrative schedule is deliberately close to that order of magnitude, and deliberately not identical: read the current fee page of the service you use, or run its fee calculator, before you put a number in a contract. ## What does escrow cost on a $10,000, a $100,000 and a $1 million domain sale? On the illustrative schedule, a standard domain escrow costs $250 on a $10,000 sale, $1,800 on a $100,000 sale and $12,000 on a $1 million sale. The fee is 48 times larger on the largest sale than on the smallest, for a price that is 100 times larger, which is what a falling percentage means in practice. The calculation is one multiplication per sale. A $10,000 price sits in the second band, so the fee is 2.5% of $10,000, or $250. A $100,000 price sits in the third band: 1.8% of $100,000 is $1,800. A $1 million price is the top of the fourth band: 1.2% of $1,000,000 is $12,000. In each case the result is above the band's minimum, so the minimum plays no part. A concierge transaction, in which the service receives the name into its own registrar account and then passes it to the buyer, is commonly priced at a multiple of the standard rate. The large online escrow service mentioned above publishes concierge rates that are exactly double its standard rates in every band. Taking double as the illustrative assumption, the concierge fee is $500 on the $10,000 sale, $3,600 on the $100,000 sale and $24,000 on the $1 million sale. The chart shows both service levels as a share of the price.
Escrow fee as a share of the sale pricePercent of price, illustrative schedule, concierge assumed at double the standard rate
ConciergeStandard
$10,000 5.0% 2.5% $100,000 3.6% 1.8% $1,000,000 2.4% 1.2%

Escrow fee only. Wire charges, currency conversion, commissions and tax are not included. Illustrative rates, not a provider's price list.

The share of the price halves between the smallest and the largest sale, but the dollar amount is what the two sides negotiate over. Nobody argues long about who carries $250. At $12,000, the fee split is a real term of the deal, and it belongs in the negotiation at the same time as the price, not after the handshake. ## When does the minimum fee change the answer? The minimum fee changes the answer on very small sales and on prices just above the bottom of a band, where the fee stops following the percentage and becomes a flat amount. In both cases the real cost is higher than the headline rate suggests. Take an $800 name on the illustrative schedule. The headline rate of 3.0% gives $24, which is under the $50 minimum, so the fee is $50, or 6.25% of the price. The minimum applies to every sale below $1,666.67 in that band, the price at which 3.0% reaches $50. For a seller who moves many low-priced names, this is the number that decides whether escrow is used on each sale or kept for the ones that justify it. The minimums of the higher bands work differently. They are set at the fee of the top of the band below, so that crossing a threshold never makes the fee fall. A $50,000 sale pays 2.5%, or $1,250. Without a floor, a $52,000 sale would pay 1.8%, or $936: a higher price and a lower fee. The $1,250 minimum of the third band removes that step. The effect is a flat fee of $1,250 on every price from $50,000.01 up to $69,444, the point where 1.8% catches up with the floor. On a $52,000 sale the effective rate is therefore about 2.40%, not 1.8%. The same thing happens at each threshold of the illustrative schedule: the fee is flat at $150 up to $6,000, flat at $4,500 from $250,000.01 to $375,000, and flat at $12,000 from $1,000,000.01 to about $1,333,333. A $1.2 million sale costs exactly the same escrow fee as a $1 million sale. If your price sits just above a threshold, compute the fee from the minimum, not from the percentage. ## What do the payment method, a concierge transfer and a holding period add? A card payment, a concierge transfer and a holding period each add a cost on top of the standard fee: a card adds a percentage of the amount paid, a concierge transfer multiplies the rate, and a holding period adds a monthly charge for as long as the name is held. A plain wire with a direct transfer adds none of them. **Card and wallet payments.** A card payment can be disputed by the cardholder for months after it is made, and the card networks charge for processing it. An escrow service that accepts cards passes that cost on and limits its exposure. The large online escrow service cited earlier publishes a processing fee of 3.05% on card and wallet payments, added to the escrow fee, and offers those methods only on transactions up to $5,000. On the illustrative schedule, with a 3% card surcharge assumed, a $3,000 name costs $90 of escrow fee plus $90 of card surcharge: $180, or 6.0% of the price. Above the first band, expect a wire to be the only option, which is also why the three sales of this article are all funded by wire. **Wire charges.** The same service's fee page lists $25 added when the buyer's wire comes from outside the United States on a US dollar transaction, and a disbursement charge for the outgoing wire to the seller: $10 inside the United States, $20 outside. These are small and fixed, and they are separate from what the buyer's and the seller's own banks charge to send and receive a wire. On a $10,000 sale they are worth a line in the agreement. On a $1 million sale they are rounding. **Concierge transfer.** In a standard transaction the seller moves the name to an account the buyer controls, and the buyer confirms receipt. In a concierge transaction the escrow service takes the name first and delivers it to the buyer itself, which suits a buyer who is not at ease with registrar accounts and authorisation codes, or two parties who each want a neutral hand on the name during the handover. At the doubled rate assumed here, concierge adds $250, $1,800 and $12,000 to the three sales. On a seven-figure name, that extra $12,000 is a decision in itself: it buys custody of the name by a neutral party during the days of the transfer. **Holding period.** When the price is paid in instalments, the service can hold the name until the last payment. The published terms of the same large service set the holding charge as a small monthly percentage of the name's value with a monthly minimum of $100 for a lease that ends in a purchase, over a term of three months to five years, and the ordinary escrow fee applies as well. Its own example is a $10,000 name held for 12 months: $1,200 of holding fees. On that sale the holding service costs several times the escrow fee, so the question of who pays it deserves its own sentence in the contract. ## Who pays the domain escrow fee: the buyer, the seller, or both? The party who pays the domain escrow fee is whoever the sale agreement names, and when the two sides have equal weight in the negotiation the usual outcome is a 50/50 split. No law or industry rule assigns the fee to one side. Escrow services ask for the choice when the transaction is created and collect the fee accordingly. The mechanics are the same everywhere. When the buyer pays, the fee is added to the amount the buyer sends. When the seller pays, the fee is deducted from the amount the seller receives. When it is split, half is added on one side and half deducted on the other. The table gives the result on the three sales, with the standard illustrative fee. | Sale price and fee split | Buyer sends | Seller receives | | --- | --- | --- | | $10,000, buyer pays | $10,250 | $10,000 | | $10,000, seller pays | $10,000 | $9,750 | | $10,000, split 50/50 | $10,125 | $9,875 | | $100,000, buyer pays | $101,800 | $100,000 | | $100,000, seller pays | $100,000 | $98,200 | | $100,000, split 50/50 | $100,900 | $99,100 | | $1,000,000, buyer pays | $1,012,000 | $1,000,000 | | $1,000,000, seller pays | $1,000,000 | $988,000 | | $1,000,000, split 50/50 | $1,006,000 | $994,000 | Three patterns come up in practice, and each has a logic. The buyer pays when the buyer asked for escrow or approached the seller. A seller who was not looking to sell, and who receives an offer for a name in use, is in a position to say that the price is net: the quoted figure is what must arrive. Marketplace and broker listings that state a "net to seller" price work the same way. The seller pays when the seller wants the simplest possible offer for the buyer. A quoted price with nothing added is easier for a corporate buyer to get approved, because the purchase order shows one figure. Sellers who run outbound sales often absorb the fee for that reason and build it into the asking price. The split is the default between two parties who both want the protection. Each gets something from the escrow, so each carries half. On the $1 million sale that means $6,000 a side. A fourth arrangement exists when a broker is involved: the fee can be charged against the broker's commission. It is rare, and it is a commercial concession by the broker, not a default. One point saves arguments: the fee split and the price are the same negotiation. A buyer who offers $100,000 with the seller paying the fee is offering $98,200. A seller who counters at $100,000 net is asking the buyer for $101,800. Put both figures on the table, the amount sent and the amount received, and the discussion is about one number. ## What else comes out of the price besides the escrow fee? Besides the escrow fee, a domain sale carries wire charges, a currency conversion spread if either party's account is in another currency, a broker's or a marketplace's commission if one was involved, and tax on the seller's proceeds. On most brokered sales the commission is by far the largest of these, and on a cross-border sale the currency spread can exceed the seller's share of the escrow fee. **Wire charges.** Each bank on the route may charge: the buyer's bank to send, the escrow service to disburse, the seller's bank to receive, and sometimes an intermediary bank in between on an international wire. They are fixed amounts in the tens of dollars. **Currency conversion.** If the transaction is in US dollars and the seller banks in another currency, the seller's bank converts the incoming wire at its own rate, which includes a spread over the market rate. The spread is a percentage, so it grows with the sale. It appears on no invoice, which is why it is the cost most often left out of a seller's estimate. The same applies in reverse to a buyer who funds a dollar transaction from an account in another currency. **Broker commission.** A broker who found the buyer or negotiated the sale is paid a percentage of the price under the brokerage agreement. The commission is normally computed on the gross sale price, before the escrow fee, and many escrow services can pay the broker directly out of the transaction, so that the commission never passes through the seller's account. **Marketplace commission.** A name sold through a marketplace's own checkout pays that marketplace's commission, which generally covers the handling of the payment and the transfer. In that case there is usually no separate escrow fee, and the commission replaces both the broker line and the escrow line. If the marketplace only introduced the buyer and the parties then close through a separate escrow service, both costs can apply: read the marketplace's terms on off-platform closings before agreeing to that. **Tax.** The proceeds are income or a capital gain for the seller under the rules of the seller's country, and a sales tax, VAT or GST may apply to the price, to the escrow fee or to the commission depending on where each party is established. These rules vary by country and by the seller's status as an individual or a business, and none of them is computed here. What matters for the agreement is one sentence saying whether the price includes or excludes any applicable tax. ## What does the seller net on each of the three sales? On the assumptions below, the seller of a brokered, cross-border sale nets $8,256.60 on the $10,000 sale, $83,224.35 on the $100,000 sale and $835,525.35 on the $1 million sale, before tax. That is between 82.57% and 83.55% of the price, and the escrow fee accounts for the smallest part of the gap after the wire charges. The assumptions, all illustrative: the escrow fee is split 50/50 on the standard schedule; a broker is paid 15% of the gross price out of the escrow; the outgoing wire costs $20 and the seller's bank charges $15 to receive it, $35 in all; and the seller's bank converts the dollars arriving into the seller's home currency with a spread of 1% over the market rate. Tax is left out because it depends entirely on the seller's country and status. | Line | $10,000 sale | $100,000 sale | $1,000,000 sale | | --- | --- | --- | --- | | Sale price | $10,000.00 | $100,000.00 | $1,000,000.00 | | Seller's half of the escrow fee | −$125.00 | −$900.00 | −$6,000.00 | | Broker commission, 15% | −$1,500.00 | −$15,000.00 | −$150,000.00 | | Wire charges, both ends | −$35.00 | −$35.00 | −$35.00 | | Amount arriving at the seller's bank | $8,340.00 | $84,065.00 | $843,965.00 | | Currency spread, 1% | −$83.40 | −$840.65 | −$8,439.65 | | **Seller nets, before tax** | **$8,256.60** | **$83,224.35** | **$835,525.35** | | **Share of the price** | **82.57%** | **83.22%** | **83.55%** | Read down the $1 million column. The commission is 25 times the seller's half of the escrow fee. The currency spread, which nobody negotiated, costs $2,439.65 more than that half. The escrow fee is the line the parties tend to discuss longest, because it is the one printed in front of them, and it is the third largest cost on the page. Two practical consequences follow. A seller who is paid in a foreign currency gains more by arranging the conversion in advance, with a currency specialist or at a negotiated bank rate, than by winning the argument over the fee split: moving the spread from 1% to 0.5% on this sale is worth about $4,220, against $6,000 for shifting the entire fee to the buyer. And a seller with no broker and a same-currency buyer keeps a very different share: with only the half fee and the $35 of wire charges, the $1 million sale nets $993,965. ## How do you write the escrow fee split into the sale agreement? The escrow fee split is written into the sale agreement as a short clause that names the service, the service level, who pays which share of the fee, and who bears each surcharge, with the amount the buyer must send and the amount the seller must receive stated in figures. A clause that says only "the parties will use escrow" leaves every one of those points open. The clause should settle the following. - **The service and the service level.** Name the escrow company by its legal name and say whether the transaction is standard or concierge. If the parties choose concierge, say who pays the difference over the standard fee: it is often the party who asked for it. - **The split, in words and in figures.** For example: the escrow fee is shared equally between buyer and seller; on a price of $100,000 the buyer sends $100,900 and the seller receives $99,100, before bank charges. The figures remove any doubt about what "split" means. - **The base.** State that the fee is computed on the purchase price. If the price changes before closing, the fee is recomputed on the new price under the same split. - **Payment method.** Say that the buyer funds by wire. If a card or wallet payment is allowed, say that the party who chooses it bears its surcharge. - **Bank charges.** The simplest rule is that each party bears the charges of its own bank and the escrow service's disbursement charge follows the fee split. State it, because on an international wire an intermediary bank may deduct an amount in transit. - **Currency.** Name the currency of the transaction and say that each party bears the cost of converting to or from its own currency. - **Commission.** If a broker is paid out of the escrow, state the rate, the base (the gross price) and that the escrow service disburses it directly. Say whether the commission is affected by the fee split: by default it is not. - **Tax.** State whether the price is inclusive or exclusive of any sales tax, VAT or GST, and that each party is responsible for its own income or gains tax. - **Cancellation.** Ask the service what it retains if the transaction is cancelled after funding or the name is rejected during the inspection period, and write down who bears that amount. A common position is that the party whose default caused the cancellation carries it. - **Deadlines.** Give the number of days the buyer has to fund, the seller has to transfer once funding is confirmed, and the buyer has to inspect and accept. The order of operations matters as much as the wording, because the split chosen on the escrow service's screen must match the contract.
From agreed price to matching escrow instructionsWorked on the $100,000 sale, fee split 50/50 on the illustrative schedule
  1. Get the fee quotedAsk the escrow service for the total fee on the exact transaction: price, currency, wire funding, standard service, country of each party. Here the quote is $1,800.
  2. Agree the two figuresTranslate the split into what the buyer sends and what the seller receives: $100,900 and $99,100. Agree these two amounts, not only the word "split".
  3. Write the clausePut the service, the service level, the split, both figures, the rule on bank charges, the currency and the deadlines in the sale agreement, and have both parties sign it.
  4. Open the transaction to matchWhoever creates the transaction selects the same fee split and the same inspection period as the contract. The other party checks the terms on screen before accepting them.
  5. Check the closing statementAt disbursement, compare the amount received with the contract figure. A difference of a few tens of dollars is a bank charge; anything larger is a term that was entered differently from what was signed.
When a broker manages the transaction, the broker normally opens it and enters the split. The seller and the buyer should still each read the terms presented by the escrow service before accepting, because those terms, once accepted by both, are the instructions the service follows. ## What does the escrow fee buy the buyer and the seller? The escrow fee buys a neutral party, licensed where the law requires it, that holds the buyer's money until the name has changed hands, and releases it to the seller only then. Each side is relieved of the risk it could not otherwise remove: the buyer does not pay for a name that never arrives, and the seller does not transfer a name against a payment that never clears. For the buyer, the fee covers the holding of the purchase money apart from the seller until the transfer is complete, an inspection period during which the buyer confirms that the name is in an account the buyer controls, and a defined route for getting the money back if the seller does not deliver. For a company, it also produces the paper trail a finance team expects: an identified counterparty, a regulated recipient for the wire, and a closing statement. For the seller, the fee covers confirmation that the funds are received and cleared before any transfer starts. That confirmation is what lets a seller release a valuable name to a stranger in another country without waiting weeks to be sure the payment will stand. The seller also gets a payout from a known sender, which is easier to explain to a bank than a large wire from an unknown foreign company, and a record of the sale for the accounts. For a broker, the service pays the commission out of the transaction at the same time as the seller, on the instructions both parties accepted. Behind the screen, the fee pays for work that is easy to overlook: verifying the identity of the parties, screening the transaction under the anti-money-laundering rules that apply to the service, keeping client money in dedicated accounts under the terms of its licence, staffing the handling of each step, and carrying the responsibility if something goes wrong while the money is in its hands. On a $1 million name, $12,000 pays a regulated firm to carry that responsibility for the days the sale takes. Set against the price of the asset, and against what either party would stand to lose in a sale that failed halfway, the fee is a modest part of the cost of the deal. The fee does not buy everything. An escrow service confirms that the name moved and the money moved. It does not check whether the name infringes a trademark, whether the seller's title is disputed, or whether the price is fair. Those remain the work of the buyer, the broker and, on a large sale, a lawyer. ## How is the money divided when several people share the proceeds? When several people share the proceeds of a domain sale, the division is a separate question from the escrow, and it is best agreed in writing before the buyer pays. An escrow service disburses to the parties named in its transaction, typically the seller and a broker; a co-owner, a finder or a second broker is then paid by the seller afterwards, with a second set of wires, bank charges and conversions. That second round has its own cost and its own risk. Each onward payment carries bank charges, and on a cross-border payment another currency spread. Each one also depends on the seller doing it, at the right amount, after the money has landed. The agreement between co-owners should therefore state the shares on the gross price, say which costs are deducted before the division (the escrow fee, the commission, the bank charges) and which are borne by one party alone, and give a deadline for the onward payments. Shaka addresses that division, and only that. It is a payment router, not an escrow service: it never holds the funds and does not wait on a transfer. Each party's share is agreed, and can be signed by each recipient, before the client pays; the client pays once, every party is paid at the same moment, and the payment is final. A deal has at most 20 recipients. Where the parties want a neutral holder between payment and transfer, that is the role of an escrow service, and the two do different jobs. Whatever the tool, the arithmetic of this article applies to every share. A co-owner entitled to 30% of the $100,000 sale is entitled to 30% of a number that someone has to define: $100,000 gross, $99,100 after half the escrow fee, or $84,065 after the commission and the wire charges as well. The difference between the first and the last of those bases is $4,780.50 for that co-owner. Define the base in the same document that defines the share.