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How Much Does an Escrow Service Cost?

Risk management

How Much Does an Escrow Service Cost?

by | Risk management

Ben Constanty

CEO, Smartlink

Disrupting online payments with smart contracts.

Escrow, the only time you have likely heard that word is when purchasing your home. However, the term escrow and the services escrow offers are used quite frequently in business.

Put simply, an escrow agent is a third-party that holds money during a transaction between two (or more) parties. When you purchase a home, the escrow holds your money with the agreement that the seller takes the home off the market.

Escrow agents play a pivotal role in the financial world by ensuring transactions are securely processed. It eliminates the variable of not being paid or paid on time.

🔎 Key takeaways

  • Escrow is a financial tool whereby a transaction (money or asset) between a buyer and a seller is secured by the escrow service
  • Escrow takes the form of an enforceable legal agreement between two parties (or more)
  • The escrow service only releases the funds when all the contractual conditions are fulfilled by both parties

When to use an escrow service?

When to use an escrow service?

The proper time to find an escrow agent is when there is a transaction that either party may not be able to financially fulfill.

A contract is made and then the money is moved through the escrow. It is beneficial because it eliminates a large risk.

For example, if the buyer intends to make a purchase, but the money is never sent to the escrow account, the seller does not have to remove the listed item.

On the other hand, if the seller removes the product from the market, they know their money is safe because it is in escrow.

Freelancing is another beneficiary of escrow services. When there is a large project, having money sit in escrow ensures it is disbursed according to the project timeline.

How much does an escrow service cost?

How much does escrow services cost?

When looking for an escrow service you are likely to run into a couple of standard fees.

The first being an initial cost of doing business, or a flat fee. This is standard and nothing too complex. If you are unsure of who to use or do not have a preference, then find one with a lower flat fee.

The second fee you are likely to incur is dependent upon your dollar amount.

For example, if you need to have $10,000 in escrow you may be charged $5 per $1,000 held in escrow.

Another form this fee can take is a percentage. Some escrow companies will have different levels of service.

If you need nothing more than the escrow account, it can be inexpensive.

However, if you are dealing with higher dollar amounts and need a higher level of service, you will simply pay a higher percentage.

Smartlink, the future of escrow

If you are in the market for an escrow company, Smartlink is likely to be a great fit for you.

With cheaper and quicker options, Smartlink is geared towards 21st century transactions.

Traditional Contract VS smart contract

Founded in 2020, the goal is to protect and facilitate global digital cash transactions between parties.

Located in Toronto, with offices in Paris and Estonia, Smartlink understands business.

Whether you are a large business or a freelancer taking on a large project, the services of Smartlink can give you peace of mind knowing you’ll receive your hard-earned money.

With up to 50% cheaper than competitors due to blockchain and smart contract technology, it is worth looking at making Smartlink a trusted business partner.

Ben Constanty

CEO, Smartlink

Disrupting online
payments with smart contracts.

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