When buying an online business there is no doubt that you want to be as safe as possible ensuring you are getting what you are paying for.
This is what Escrow does, it helps protect you from potential scammers trying to sell you a business in which is not what they say it is.
How Escrow actually works is kind of like the middleman between the deal, the mediator should you wish. Where when you, meaning the seller and yourself come to an agreement for the price of the sale and the contract of sale (the terms and conditions of the sale and everything that comes along with the business). You use an Escrow service to hold the funds whilst all the website data, content and everything that comes along with the sale is either being sent, handed over or transferred to you.
To break this down, when you put in an offer and everything has been accepted what you as the buyer needs to do is pay for the business into an Escrow account. I have used www.escrow.com before and if you are using a website broker, generally they will act as the Escrow service which I have used before also.
So once the funds are in the actual Escrow account and both parties (yourself and the seller) can confirm that. All the websites data and the businesses content is delivered to the new owner, being you.
After all the websites data and accounts are in your name or control being the new owner (according to what you and the seller agreed upon). You as the buyer will release the funds to the seller and this is the safest method for buying an online business, which works well for all parties involved.
The reason you want to ensure you do this is to protect yourself from paying for something that has not been delivered to you in the contract for sale. For example, if you didn’t use this method and you paid even half the amount for the business towards the seller first and they transferred you a domain name with a half broken or crappy looking website that wasn’t earning you money. You have just been scammed and sent your hard earned cash to a dodgy/fake seller.
Instead this method protects you, by having the funds first in the Escrow account where you can take ownership of the business and ensure all the agreements and terms have been met and you are comfortable with what you have paid for. Then you can release the funds allowing the seller to claim the money, which is rightfully theirs from the sale.
Better to always be safe rather than sorry right.
I hope you found this post super informative, if you did please feel free to share it. If at all you have further questions, please simply comment below or contact me directly where I can quickly answer them or possibly put out a FaceBook Live or post dedicated to it.
