Selling a domain name can be a quick and easy task, or it can be a long drawn out process.  Either way as a seller you want to take steps to ensure that you are not going to get scammed.

The first thing you want to do is try to verify the identity of the buyer.  This is important in two ways.  The first is that how much you can sell a domain name for may change significantly depending on the buyer.  If the buyer is a large corporation you may be able to get substantially more for your domain.  But more importantly you want to ensure that you are dealing with an honest buyer and not a scammer.

Next is determining how to receive payment.  There are many ways to get paid for your domain including cash, money order, check, wire transfer, or online payment services.  It is strongly recommended that if you choose an online service you use one that is friendly to domain sellers.  I have found that the most friendly to sellers is MoneyBookers.  MoneyBookers has policies that make it very difficult for a buyer to issue a charge back on the purchase.  This is becoming a very common way for scammers to avoid paying for a domain through other online services such as PayPal. 

MoneyBookers policy is that a buyer must fully fund the account prior to the sale.  This means that they cannot directly purchase a domain via their credit card, making it very hard, if not impossible to start a chargeback on the transaction.

The safest way for both parties is to use Escrow for the transaction.  Escrow functions as a middle man, holding the funds until both parties verify that the transaction has completed successfully.  The buyer sends the money to the escrow service who holds the money.  The seller then transfers the domain and when the escrow service verifies that the domain has been transferred they release the funds to the seller.  MoneyBookers has an escrow service that is very affordable, charging only 1% for the transaction.  Additionally they charge the buyer 2% up front as a deposit to ensure his swift actions in completing the transaction.  Once the transaction is complete the 2% is refunded.

Escrow.com is a commonly known escrow service that provides the same function as MoneyBookers.  However Escrow.com charges a higher fee and does not guarantee against chargebacks.

Finally you have the transaction itself.  If you choose to use a funding source that does not provide escrow you will want to ensure that the funds clear your account prior to initiating any transfer.  You should be aware that PayPal is not a safe way to receive payment and that paypal has a history of protecting the buyer while providing no safeguards for a domain seller.  When funds have been cleared you should initiate the transfer of the domain to the buyer.  Make sure to get an email from the buyer stating that they have received the domain for your protection.

It is recommended that you keep copies of all emails regarding the sale of a domain in the event that there is a dispute over ownership of the domain.

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