Domain Name Escrow
What is a domain?
If the Internet is a web of highways running through cyberspace, your domain is where you live or work and your domain name is the address of your home or business on the net. Every time you email someone or look up a website, you are using a domain name. Each domain and each domain name is unique. While more than one person can “live” on one website, that website is the exclusive property of it’s owner, just like your house is your exclusive property, although title may be shared with a spouse or the bank.
Domain names are common language addresses corresponding to your domain, consisting of a string of words separated by a dot (.) and usually containing some word that represents you or your business and indicates the type of information someone might find there.
When you walk into a shop with a large donut or bagel sign outside and pictures of coffee cups in the window, you expect to find a coffee shop. Domain names work the same way. You don’t hang a bagel sign over a garage, for instance, or a tow truck sign over a flower store. In this sense, domain names are also your advertising sign and may include the name of your business.
This makes domains and domain names valuable. You don’t want someone else stealing your domain or your domain name. Remember the old saying: Location, location, location? You want to protect that domain and its name the way you would protect the most marketable corner lot when putting up your business or the way you would protect the name or logo you use in your business.
What is an escrow service?
When you are ready to buy that corner lot and put up a business, you usually meet with a lawyer or financial representative to help you with the transaction. That individual, known as a “third party,” will hold onto the money you are using to buy the property until the deed is safely in your hands. This helps to prevent fraud. The lawyer or financial representative is said to hold the money in trust or in escrow, in a specially labeled account just for that purpose.
A domain escrow service works much the same way. The third party agent, in this case Greenberg & Lieberman, put the funds to purchase a domain into a special account, holding them in escrow until the seller of the domain transfers the authorization code to the domain to Greenberg & Lieberman and the code is verified, completing the sale. This way, you, the purchaser, know you are getting what you paid for, and the seller knows he or she is getting paid.
How do I use a domain escrow service?
Using a domain escrow service is easy.
First, the seller or buyer of the domain contacts a domain escrow agent, such as Greenberg & Lieberman, to set up an account.
Second, the parties review the terms for the purchase of the domain and come to an agreement.
Third, the purchaser gives the funds to the third party agent for safe keeping until the transaction is complete. Similarly, the seller provides the agent with the authorization code to permit access to the domain, much like someone who is selling a house gives the keys to the house to the real estate agent..
Fourth, once everyone is happy with the product and purchase price, the third party agent transfers the funds to the seller and the “keys” to the buyer, closing the cyber real estate transaction.
Why should the seller or buyer of a domain use an escrow service?
Purchasing real estate is always risky. Purchasing anything on the Internet is even more so. How do you know the person to whom you are talking owns the domain or can deliver the product? How do you protect yourself against fraud, misrepresentation or identity theft? A third party escrow agent can reduce the chances of you being ripped off. Greenberg & Lieberman can check the domain to make sure it’s what the purchaser ordered and, if not, can make sure the seller owns the domain and that the domain and it’s name are not subject to liens, copyrights or trademark violations.