Who authorizes the release of funds?

Follow

A common question in Flippa transactions is, who actually controls the release of funds from escrow (or FlippaPay)? The short answer is the Buyer is the one who ultimately authorizes the funds to be released to the Seller (assuming everything goes according to expectations). Let’s break down how this works in both FlippaPay and Escrow.com scenarios, and why it’s set up this way.

Buyer-controlled release of funds

In Flippa’s payment processes, the buyer holds the power to release the money once they are satisfied. This is a fundamental principle of escrow-type services – it protects the buyer from losing money without getting what they purchased. For the seller, it provides assurance that the funds are there and will be paid when they do their part.

FlippaPay

The buyer must actively trigger the release. As detailed earlier, the buyer clicks “Release Funds” and then confirms via email authorization for FlippaPay transactions. Flippa (through its trust account partner) will only release the money after receiving that buyer confirmation. If the buyer doesn’t do anything, the funds remain in the trust account. Flippa’s team cannot and will not release the money on their own without the buyer’s go-ahead (except in some edge-case dispute resolution scenario, which is rare and would involve both parties’ agreement or an intervention).

Escrow.com

Similarly, on Escrow.com the buyer must mark the transaction as accepted/complete for the funds to move. Escrow.com explicitly states that funds are released only when both parties are satisfied – practically meaning the buyer clicked the accept button after their inspection. When the Buyer accepts the goods on Escrow.com, that action triggers Escrow.com to pay the Seller. If the Buyer neither accepts nor raises a dispute, Escrow.com may eventually release funds after the inspection period, as per the agreed terms, to prevent indefinite holding. That’s essentially based on an auto-authorization built into the previously agreed upon Terms and General Escrow Instructions.

What about the Seller or Flippa?

Neither the Seller nor Flippa staff can unilaterally initiate a release in normal circumstances.
Sellers on Flippa do have a button to Request Release and/or they can message the Buyer to remind them, but these actions do not move any money; they merely send a notification to the Buyer. A Seller cannot press a button to get their funds released without Buyer approval.

Flippa’s team oversees the process, but acts as a neutral facilitator. Escrow.com and Flippa will not 'take sides' and push a release of funds without the Buyer’s consent. The payment process with both of our partners is specifically designed so that the Buyer’s confirmation (on Flippa and/or via email) is required – this is the “two keys” approach for security.

Why Buyer authorization?

It might seem like this favors the Buyer (and in a sense, it does give the Buyer control), but it’s standard in escrow and escrow-like transactions. The Buyer is initially trusting the process will complete by sending funds into an escrow or trust account without first receiving assets or goods prior to their payment. Buyers need to rely on the confidence that if the deal does not complete as expected, that they won’t lose the funds sent in their payment. Having the Buyer authorize release of funds ensures that the Seller completes their obligations to the Buyer’s satisfaction. The double confirmation strongly encourages good communication – the Seller will often help the Buyer until the Buyer is happy in order to make sure they’ll release the funds.

For the Seller, this means that you should be proactive in delivering assets and addressing the Buyer’s needs quickly, so the Buyer has no reason to delay releasing your payment. It’s also why verification of the Buyer's identity and other details are important as you want to know the person holding this power is legitimate and able to pay (which is ensured by the initial escrow funding and our KYC checks).

What if the Buyer disappears or refuses unfairly?

This is a fear which we appreciate some Sellers have, “What if I transfer everything and the buyer won’t release funds?” Fortunately, attempted abuses of this kind are very rare. Buyers have no incentive to hold onto funds because they can’t get them back unless there’s a real issue (they can’t redirect the money elsewhere – it’s locked in escrow). If a buyer went silent, Flippa would attempt to contact them. In Escrow.com, if the buyer does nothing beyond the inspection period, Escrow.com will automatically release the funds, which protects the Seller. In FlippaPay’s case, if a buyer went MIA after receiving assets, Flippa would investigate. Flippa’s Terms of Service likely allow them to eventually release funds if a buyer is non-responsive but clearly in possession of the assets, though they’d do so carefully (and possibly involve legal process or arbitration if it was contentious). However, such scenarios are extremely uncommon on Flippa.

Who else might be involved?

If a Broker is part of the deal (e.g. Flippa’s Broker team or an external third-party Broker), they might also monitor the release process. A Broker might prompt the Buyer to release or confirm when certiain conditions are met. On Escrow.com, a broker can be a party to the transaction, but even then, the Buyer’s acceptance of the assets is the key trigger to release funds in escrow.

With FlippaPay, he buyer must authorize Flippa to release the funds for the sale per the email received.

In Escrow.com, funds are released only after the Buyer (purchaser) indicates acceptance.

So, as a Buyer, it is clear that it is your responsibility at the end of the transaction to take that action and release funds to the Seller. As a Seller, be aware that the Buyer has this control by design – focus on making the Buyer comfortable and confident in completing the deal.

If any disputes or issues come up, then the release of funds is paused until concerns or issues have been successfully resolved. Flippa or Escrow.com will continue to hold the funds during a dispute and only release according to the outcome (be it a mutual agreement, return of assets to the Seller for a refund, etc.). Assuming a smooth transaction, the Buyer’s “green light” is what authorizes the release of funds. This mechanism builds trust into the system, aligning with the whole purpose of secured payments like escrow that no one loses out – the Buyer won’t lose money without assets, and the Seller will get paid once they’ve delivered as promised.