Buying or Selling a Domain? Here's How to Avoid Getting Scammed
Someone sends you a great offer on a domain you've been sitting on for years. Or you find the perfect name for your new business, agree on a price, and send payment — and then the seller goes quiet. Domain sales are unusually exposed to scams because the product is just a change of a few database records, with no shipping, no physical proof, and historically weak buyer protection.
What Are the Most Common Domain Sale Scams?
The seller does not actually own the domain. They found it listed somewhere, or it belongs to someone else entirely, and they're hoping to collect payment before anyone notices the transfer never happens.
Payment first, transfer later. A seller collects money through a fast, hard-to-reverse method — wire transfer, cryptocurrency, gift cards — then delays indefinitely or disappears once paid.
Buyer chargebacks after taking control. Less common but real: a buyer pays through a reversible method, gets the domain transferred, then disputes the charge with their bank once they already have what they wanted.
Fake counter-offer phishing emails. Scammers monitor domain marketplaces and send lookalike emails posing as a competing buyer or the platform itself, trying to get you to click a link and enter account credentials.
How Much Does Escrow Actually Cost?
Fees typically scale with the transaction size rather than being a flat rate — commonly somewhere around 1-3% of the sale price, with a small minimum fee for very low-value deals and a lower percentage for large ones. Whoever benefits more from the added protection, or whoever's more risk-averse in the negotiation, commonly ends up covering the fee, though splitting it between buyer and seller is just as standard. Either way, treat the fee as the cost of the deal actually closing rather than an avoidable expense — it's cheap compared to what a failed transfer or a stolen payment costs.
How Do You Buy or Sell a Domain Safely?
- Use a licensed escrow service for any transaction that isn't a large, well-known marketplace's built-in checkout. The escrow company holds the buyer's funds and only releases them once the domain transfer is confirmed complete on both ends.
- Verify ownership before paying anything. Run the domain through a WHOIS lookup and compare it against what the seller claims. If privacy protection is hiding the registrant, ask the seller to prove control by temporarily changing a DNS record you can independently verify.
- Never move payment outside the platform or escrow flow, no matter what incentive is offered. A request to skip the fee and pay directly is close to a universal scam signal in domain sales.
- Confirm the transfer authorization code has actually been generated and sent before releasing any funds from escrow — this is the actual mechanism that moves a domain between registrars, not just a message saying it's yours now.
- Wait for the domain to show up under your own registrar account, not just a confirmation message, before considering the deal closed.
- If buying through an [auction or marketplace](/blog/domain-auction-how-it-works), stick to platforms with built-in buyer protection rather than deals that move to direct contact outside the platform.
What Red Flags Should You Watch For?
Urgency, requests to communicate only outside the platform, sellers who cannot produce any proof of ownership when asked directly, and prices dramatically below what a domain's actual valuation would suggest are all reasons to slow down, not speed up. Legitimate sellers on reputable marketplaces expect these questions and answer them without pushback — hesitation or deflection is itself useful information.
The domain investing world runs almost entirely on trust between strangers, which is exactly why the professionals in it lean so heavily on escrow as a default, not an optional extra.
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