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Ask HN: Selling intangible goods (website) using Escrow, is it safe?

3 points by dawson 17y ago

I'm about to sell a website on Flippa and the buyer wants to use Escrow. I have no experience with this payment service, can anyone advise if it's safe to use for intangible/digital goods?

aitoehigie 17y ago
its most probably a scammer
- andyjdavis 17y ago
  Can you elaborate on why you say that? Just so we can all learn something :)
  - cperciva 17y ago
    There have been a lot of scams involving using an "escrow" service which is really just the scammer in disguise.
dangrossman 17y ago
Escrow, along with a good contract, is a great way to transfer a website. The buyer has to send the money to the escrow service. You know that they have the money to buy your site, and that it's been transferred to the escrow service, before you have to turn over the website. You transfer the domain to the buyer, then they allow the escrow service to transfer the funds to you. The reason this protects you is that if the buyer tries to back out, the escrow service still has the money. You can provide proof that you transferred the website and they can release the funds to you. The reason this protects the buyer is that you don't get access to his money until you've transferred the website to him.
- dawson 17y ago
  So, I transfer the domain name first and request the money from Escrow, then on receipt of the money I then transfer the website? I understand how I can proove the transfer of the domain name, but the actual website inc. source code and assets, this is the grey area for me.
  - regularfry 17y ago
    I would have thought that you would transfer everything once you know the money's in escrow. There's no point not to; the client shouldn't tell the escrow agent to release the funds until they have received everything, otherwise (from their point of view) you could hold them to ransom for the rest, or scarper with the money without delivering on the contract.
    - dawson 17y ago
      I guess I'm just nervous about transferring the domain and website to the buyer (who now has everything), whilst I still have (nothing) to wait for them to confirm to Escrow that the transaction was successful/as agreed, and then on Escrow to moderate, and release the funds. Would seem to me like I'm last in line, and if the buyer managed to find 'some' disagreement and is 'somehow' able to cancel the transaction process, then I could loose/have damage to the website's assets and have the difficulty in recovering the domain... maybe I'm just being nonsensical.
      - regularfry 17y ago
        Not having dealt with Escrow.com specifically in the past, I can't say how it would work, but the principle is that this bit is wrong: > to the buyer (who now has everything) The buyer doesn't have everything, because they've already paid. They've just paid the escrow service, not you. Escrow.com have an arbitration arrangement, so I don't think there's too much at stake. That being said, Escrow.com is very much tailored to physical goods, so I don't know how well they'd deal with what is effectively a copyright issue.
        dawson 17y ago
        Well, at this point they have everything as far as I'm concerned, as they have ownership of the domain and the WHOIS details of said domain are assigned to them, and they also have all my source-code and assets and FTP access to the site. Where as, at this point, I still have nothing and am waiting on Escrow to approve that the transaction has been completed. If you see my point? Which makes me worried that it might be possible at this point for the buyer to refute the transaction, Escrow to then cancel the payment and I'm now stuck without a domain or at worst, I get the domain back but someone else has a) my source code and b) the ability to do anything they wish during their access to the FTP until it's removed. I probably just don't understand Escrow and how it works.
- cperciva 17y ago
  the escrow service still has the money. You can provide proof that you transferred the website and they can release the funds to you. Providing that it's a real escrow service, yes. But be careful, since "fake escrow service" is a common scam.
  - dawson 17y ago
    Escrow.com, I assume their service is okay?
    - andyjdavis 17y ago
      Is anyone able to provide the names/urls of a few reputable escrow services? We should direct people to known companies rather than setting people the near impossible task of assessing whether or not an escrow service suggested by the other side is legitimate.

3 points by dawson 17y ago

I'm about to sell a website on Flippa and the buyer wants to use Escrow. I have no experience with this payment service, can anyone advise if it's safe to use for intangible/digital goods?

aitoehigie 17y ago

its most probably a scammer

andyjdavis 17y ago
Can you elaborate on why you say that? Just so we can all learn something :)
- cperciva 17y ago
  There have been a lot of scams involving using an "escrow" service which is really just the scammer in disguise.

dangrossman 17y ago

Escrow, along with a good contract, is a great way to transfer a website. The buyer has to send the money to the escrow service. You know that they have the money to buy your site, and that it's been transferred to the escrow service, before you have to turn over the website. You transfer the domain to the buyer, then they allow the escrow service to transfer the funds to you. The reason this protects you is that if the buyer tries to back out, the escrow service still has the money. You can provide proof that you transferred the website and they can release the funds to you. The reason this protects the buyer is that you don't get access to his money until you've transferred the website to him.

dawson 17y ago
So, I transfer the domain name first and request the money from Escrow, then on receipt of the money I then transfer the website? I understand how I can proove the transfer of the domain name, but the actual website inc. source code and assets, this is the grey area for me.
- regularfry 17y ago
  I would have thought that you would transfer everything once you know the money's in escrow. There's no point not to; the client shouldn't tell the escrow agent to release the funds until they have received everything, otherwise (from their point of view) you could hold them to ransom for the rest, or scarper with the money without delivering on the contract.
  - dawson 17y ago
    I guess I'm just nervous about transferring the domain and website to the buyer (who now has everything), whilst I still have (nothing) to wait for them to confirm to Escrow that the transaction was successful/as agreed, and then on Escrow to moderate, and release the funds. Would seem to me like I'm last in line, and if the buyer managed to find 'some' disagreement and is 'somehow' able to cancel the transaction process, then I could loose/have damage to the website's assets and have the difficulty in recovering the domain... maybe I'm just being nonsensical.
    - regularfry 17y ago
      Not having dealt with Escrow.com specifically in the past, I can't say how it would work, but the principle is that this bit is wrong: > to the buyer (who now has everything) The buyer doesn't have everything, because they've already paid. They've just paid the escrow service, not you. Escrow.com have an arbitration arrangement, so I don't think there's too much at stake. That being said, Escrow.com is very much tailored to physical goods, so I don't know how well they'd deal with what is effectively a copyright issue.
      - dawson 17y ago
        Well, at this point they have everything as far as I'm concerned, as they have ownership of the domain and the WHOIS details of said domain are assigned to them, and they also have all my source-code and assets and FTP access to the site. Where as, at this point, I still have nothing and am waiting on Escrow to approve that the transaction has been completed. If you see my point? Which makes me worried that it might be possible at this point for the buyer to refute the transaction, Escrow to then cancel the payment and I'm now stuck without a domain or at worst, I get the domain back but someone else has a) my source code and b) the ability to do anything they wish during their access to the FTP until it's removed. I probably just don't understand Escrow and how it works.
cperciva 17y ago
the escrow service still has the money. You can provide proof that you transferred the website and they can release the funds to you. Providing that it's a real escrow service, yes. But be careful, since "fake escrow service" is a common scam.
- dawson 17y ago
  Escrow.com, I assume their service is okay?
  - andyjdavis 17y ago
    Is anyone able to provide the names/urls of a few reputable escrow services? We should direct people to known companies rather than setting people the near impossible task of assessing whether or not an escrow service suggested by the other side is legitimate.