Who pays the escrow fee

Escrow costs money. Somebody has to carry it, and the moment to decide is while the price is still being discussed, not after both sides believe the deal is closed.

The question looks trivial and is not, because by the time it comes up the parties have already agreed the number they care about. Reopening any part of the commercial terms at that point makes both sides suspicious that more will follow.

The common arrangements

• Split between the parties. The usual default, and the easiest to propose because neither side is being asked to concede anything.
• Carried by the buyer. Common where the buyer requested escrow and the seller was content to deal directly. The cost is treated as the price of the buyer's own protection.
• Carried by the seller. Common where the seller listed on a marketplace that includes escrow in its process, or where the seller wants the deal to close and treats the cost as a concession.
• Absorbed into the price. The parties agree a single figure and one side handles the escrow cost from it. Clean, provided the invoice and the agreement both reflect what was actually decided.

None is more correct than the others. What matters is that it is stated once, before agreement, and not revisited.

Fix it in the offer

The offer should state the price, the payment route and the split of any escrow cost in the same sentence. That converts a later negotiation into a confirmation, and it exposes disagreement while both sides are still willing to move.

An offer that says the price and nothing else invites the seller to accept, then discover a deduction from the payout that was never mentioned. Sellers reasonably treat that as a reduction in price, because that is what it is.

The same discipline applies to the other cost items in a deal: transfer costs, any renewal falling due before handover, and bank charges on an international payment. Each is minor alone, and together they account for a surprising share of deals that pause after acceptance. The clause covering them belongs in the written terms, alongside the items in purchase agreement essentials.

Why it stalls transfers

The escrow platform requires both parties to accept the transaction terms, including the cost allocation, before it can be funded. If the parties disagree at that point, the transaction sits unfunded, the seller starts to doubt the buyer, and the buyer starts to doubt the seller. Nothing about the domain has changed, but the deal now has a dispute in it.

Where a name is close to a renewal date or inside a waiting period, that delay has a real cost, since the transfer window can close while the argument runs. The interaction between timing and locks is set out in registrar locks and waiting periods.

The cost of arguing about the escrow cost is almost always larger than the cost itself.

How the platform handles it

Escrow providers usually allow the party opening the transaction to choose the allocation, and the other party accepts or rejects it as part of accepting the terms. The chosen split is then applied automatically: the buyer funds the transaction including any buyer share, and the seller's payout is net of any seller share.

Because the allocation is set inside the transaction and both sides see it, an allocation different from what was agreed in the negotiation is visible immediately. Read that screen before accepting rather than after funding, since changing it afterwards means cancelling and reopening the transaction. What the provider does and does not verify at each step is covered in how escrow works.

Brokered and marketplace deals

Where a broker or a marketplace is involved, the escrow cost sits alongside whatever commission arrangement applies, and the two are often confused. They are separate charges for separate services, and the agreement should treat them separately. A seller who assumed a single deduction and finds two has the same reaction as a seller who found an unexpected one.

Write it down

One line in the confirmation email is enough: the price, the currency, the payment route, and which side carries the escrow cost. That line ends the discussion permanently and is the document to point at if it restarts.