From now on, buyer pays convenience charge on Escrow.com, not seller!

[Arpit131]

"It’s a bit frustrating to expect to pay $162 on a $5,000 deal only to find out the buyer used a credit card and the fee increased to over $300.

Based on customer feedback,Escrow.com has made a change to the way it charges customers who use a credit card. Instead of having the seller pay the extra fee for credit card purchases (or having the seller pay half on a split fee transaction), the buyer will now need to pay this “convenience fee” for being able to use a credit card for the purchase. This makes sense because using a credit card may make it more convenient for the buyer, and the buyer should have to pay for that added convenience rather than having the seller pay for something that isn’t his choice."

Complete article on Domain Investing

Convenient for sellers now when they go for transaction to Escrow.com!

 

[Ms Domainer]

It's a legal issue.

In the U.S., vendors are not allowed to tack extra CC fees on the price -- the seller must assume this fee. I'm surprised that Escrow.com just discovered this reality.

The only way around this: place a higher price on the product, thus, building in this fee.

 

[equity78]

It's a legal issue.

In the U.S., vendors are not allowed to tack extra CC fees on the price -- the seller must assume this fee. I'm surprised that Escrow.com just discovered this reality.

The only way around this: place a higher price on the product, thus, building in this fee.

Jennifer it looks like they are doing the opposite of what you said, the buyer is now paying it not the seller.

 

[Ms Domainer]

Jennifer it looks like they are doing the opposite of what you said, the buyer is now paying it not the seller.

I read it incorrectly.

But Escrow really needs to check the legality of hitting the buyer with cc costs -- unless the law has changed.

Escrow may find itself in deep doo doo.

 

[cocaseco]

The rules have changed. While you used to be unable to do that, I believe most (if not all) merchant agreements allow it, within specific guidelines like posting by POS etc.

 

[johname]

The convenience fee just the difference between Standard Service and Premier Service ? So what has changed?

Anyways, Always have the 'buyer pays escrow' box clicked. Quote to the buyer the higher credit card amount.

 

[Name Trader]

I agree that when selling I always ask the buyer to pay the escrow fees. But the problem is complicated when you are the buyer. It's also not only this Convenience Fee, but also the ingoing Bank Fees. If you agree to share the escrow fees, you also are sharing the ingoing Bank Fees. when each person should clearly be paying their own Bank Fees. Buyer should pay the ingoing fees and seller should pay the outgoing fees. It's not so much money, but it has always complicated (for me at least) how much I should be paying. I'm told they will be fixing this soon. Hopefully it was included with this update.

 

[cocaseco]

I agree that when selling I always ask the buyer to pay the escrow fees. But the problem is complicated when you are the buyer. It's also not only this Convenience Fee, but also the ingoing Bank Fees. If you agree to share the escrow fees, you also are sharing the ingoing Bank Fees. when each person should clearly be paying their own Bank Fees. Buyer should pay the ingoing fees and seller should pay the outgoing fees. It's not so much money, but it has always complicated (for me at least) how much I should be paying. I'm told they will be fixing this soon. Hopefully it was included with this update.

I don't think it is all that clear. I always approach brokerage fees as negotiable. If the buyer is paying top dollar and didn't push much, I'll pay their fees. Especially if i think there may be other business down the road. On the other hand if the buyer was a peen, then I wont pay any of the fees and am willing to let him walk. Brokerage fees are a great little add on to sway the negotiations once you are close. It has very high perceived value to the buyer, more so than the actual cost IMO. For wire fees, part of my contract says that wires are to be done without expense to me. This of course doesn't include the charge my bank charges me. There are lots of middlemen in the wire transfer process and if they all add on a fee, it gets expensive. But with it called out in the contract, I just add them on unless something different was negotiated.

 

[Name Trader]

@cocaseco - But up until now, once you agree to pay any of the Escrow Fees at Escrow.com, they lump in the $25 ingoing Bank Charge on international payments to the Escrow Fee. You are charged whatever of this incoming wire transfer fee you have agreed to as the buyer. Have you never noticed this? Which means as an overseas buyer, if you agree to share the Escrow Fee, you pay $25/2 = $12.50 of the incoming payment. They add it to the price they ask you to pay. The buyer/seller should be paying their own bank charges. You should be paying the full $25. It complicates the issue for buyer/seller. Why should the seller be paying half of my Bank Charges, when they have to pay their own $40 (if an overseas seller) as well?

 

[NameFit]

Buyer pays all the 3rd party fees – that had been my standard over years and not likely to change. When buyer has option to make choices, they chose the best/cheapest option. For smaller amounts, escrow.com comes cheaper than other companies like sedo.

Not sure what the convenience fees is (unless they have gone up), I have noticed that it was always cheaper for the buyer to pay through credit card compared to wire or paypal.

 

[Name Trader]

@NameFit - How do you enforce that? Escrow.com will always charge any outgoing Bank Fees to the seller?

 

[NameFit]

@stub - When you set up the escrow transaction - buyer pays all the fees. Do you mean when escrow.com pays you? you select ACH. There is $10 one time fee for any new bank account - which I probably paid about 10/12 years ago.

 

[Name Trader]

@NameFit -You have the fortunate position of being in US with a US Bank Account. I didn't realise the ACH fee was only a 1 time payment though. Lucky you It's a lot different if you are an overseas buyer/seller

 

[NameFit]

@stub - I understand. There is lot of potential in many countries and lot of smart people, but the lack of facilities limits them in realizing their potential. Every country has different rules on how the money is handled. Some countries like Bangladesh, Paypal is not accepted, in India - people cannot 'keep' the money in Paypal - it just acts as conduit to a bank. Financial systems are backbones of any economy because that is what drives the growth and innovation.

Sorry not to divert the topic from the Escrow.com discussion topic.

 

[Name Trader]

@NameFit - It's still relevant. Now if Escrow.com would pay us by PayPal, I'd be a happy customer

 

[cocaseco]

@cocaseco - But up until now, once you agree to pay any of the Escrow Fees at Escrow.com, they lump in the $25 ingoing Bank Charge on international payments to the Escrow Fee. You are charged whatever of this incoming wire transfer fee you have agreed to as the buyer. Have you never noticed this? Which means as an overseas buyer, if you agree to share the Escrow Fee, you pay $25/2 = $12.50 of the incoming payment. They add it to the price they ask you to pay. The buyer/seller should be paying their own bank charges. You should be paying the full $25. It complicates the issue for buyer/seller. Why should the seller be paying half of my Bank Charges, when they have to pay their own $40 (if an overseas seller) as well?

Yes I know this, but it doesn't change anything. They are all brokerage fees and just like sales commissions, they are all rolled up in COGS. The more I can get the buyer to pay, the less I have to pay. There is no such thing as "I Should Pay" in my vocabulary, its whatever I negotiated to close the sale.Why wouldn't you get them to pay everything if you could? Of course most buyers wont do that, but some do. Those that won't, that's where it comes into the negotiation. Frankly we are talking immaterial amounts here compared to the sales. I'm not going to quivel over splitting a $25 fee if that's what it takes to get a $5000 deal done.

 

[Name Trader]

@cocaseco - A Bank Charge is not an Escrow Fee. If you negotiate to split the Escrow Fee, you are almost certainly not negotiating to split the Bank Charges. To me, it's being fair, and not lumping the seller with charges which haven't been negotiated. Or are you saying that when you negotiate with the seller you specifically agree to split the Escrow Fee plus any other charges, like your remitting Bank Charges from Escrow.com? As a seller, I can understand you can bear these charges on a $5k sale. But I've been talking about as the buyer, and being fair to the seller with what has been negotiated. Again, is it fair to charge the seller for half of your remitting bank charges without it being discussed or negotiated? The buyer and seller should be responsible for their own Bank Charges, imho.

 

[cocaseco]

I'm not sure how else to say this. All charges are negotiable. The more I have to pay, the worse the deal. So if I can get the buyer to agree to pay ALL fees, I'm golden. Look, if we are using Escrow that is a decision they made, I certainly didn't ( for the most part). I said the price of this domain is $XXXX. If you pay me cash today I can transfer tonight. But if you fill safer with escrow I'm happy to accommodate, but you will have to pay $XXX in fees. I don't break down what they are at that point as it doesn't matter. If they say OK, which they will often do because they want escrow protection then great, I net more $. if they ask me to split or otherwise share the expenses of escrow, we negotiate. This will sound much worse than i intend it, but its not my job to be fair. My job is to reach as a businessman is to reach into their pocket and grab as much money as I can, as long as I'm not doing anything illegal of course. They are adults, they can look out for themselves like big boys and girls.

 

[Name Trader]

My whole point is usually when you are negotiating about sharing costs, you are negotiating about Escrow Fees. Not Bank Charges. And remember I'm speaking as the buyer, not the seller. If you want to agree about the Escrow Fees, Escrow.com add in the buyers wire bank charge into the Escrow Fee before they split the cost 50/50, even when this has not been discussed. If they do this, they should also add in the seller's Bank Fee of $40 as well. Which they don't. It's better for the buyer to pay their Intermediate Bank Fee ($25 for a wire transfer) and the seller to pay their Wire Transfer Fee ($40 in case of foreign seller). Bank Charges quoted assume foreign buyer and seller. Escrow.com should not be sharing expenses which have not been agreed.

It seems to me you are continuing to talk as the seller, not the buyer. As the seller, you will be charged an additional $12.50 wire transfer charge, like it or not, if you agree to split the Escrow Fees. Nothing you can do about it. That's the way Escrow calculates the sharing of the Escrow Fees. As you have said, this is not a biggie on a $5k sale. But it's not right.

Escrow.com should totally separate any Bank Fees from the purchase price. Leaving a clean purchase price. And charge the respective buyer/seller bank charges appropriately.

 

[Mauli Fry]

Thank you for all the feedback on bank fees. Moving forward in the next few weeks, we will be releasing a change to designate the buyer’s intermediary fee to only the buyer, not included in the escrow fee, and communicate the fee more clearly. When international payments from our buyers are received by us, the intermediary bank fee is almost always charged and this is why we must charge the $25. The charge may be as high as $40, but when this is the case we do cover the difference. We appreciate all the feedback and are listening so we look forward to announcing the update soon.