How to Use PayPal in Escrow

by Jamie Lisse ; Updated July 27, 2017

Escrow is used as a neutral third party in some financial transactions. With escrow, the buyer pays the third party and the money is not released to the seller until both parties agree that all transaction terms have been met. When you are buying something in escrow, you may be able to use PayPal in the transaction, such as buying a collectible baseball card. In such an instance, money is withdrawn from your PayPal account instead of from your checking account and deposited into the escrow account. Not all escrow services offer PayPal as a payment option, but if your service does, certain restrictions regarding the transaction are usually in place.

Step 1

Ask the other party in your transaction if he is located in the United States. To be able to use PayPal in the transaction, both the seller and the buyer must be in the United States.

Step 2

Agree on a price no greater than $5,000 for the transaction. If the price exceeds $5,000, you usually cannot use PayPal for the transaction.

Step 3

Buy something that must be shipped via a trackable method. PayPal cannot be used in the transaction for items that are not being shipped or that are not trackable, even if they are being shipped.

Step 4

Click on "PayPal" as your payment method on the transaction screen. The money is taken directly from your PayPal account and put into the escrow account for the transaction.

Tips

  • Typically, PayPal cannot be used in the purchase of a vehicle, regardless of the price.

About the Author

Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.