How to make an escrow service

I am thinking of integrating an escrow type service into a domain listing site.
But how would I go about doing it, I would need $5,000+ on hand at all times (and limit domains to be under $5,000) but do I contact paypal, and tell them that I am safe and not to allow chargebacks against me?
Plus with the paypal fees I think it would be a loss.

 

I don't think it's a good idea.. you need more than 5K in cash...
What would you do if 10 people sell there site at the same time.. with each one selling there site 1-2K each...

You need at least 100K to run a business like that...

 

You can charge a fee for people to use the escrow service (% of the amount). The fee has to higher than your paypal fees in order for you to make a profit.

 

Well, I wouldn't send money till I had sent money, I just have to be careful of chargebacks

 

Yes, i understand... just seems like to make a reasonable price then its lower than paypals fees
darn paypal needs to lower their fees

 

What will your site offer that escrow.com, sedo.com, and moniker.com do not (besides lower fees)? How will you obtain a reputation? Have you written a business or marketing plan? Have you considered legal costs? Insurance? Bonding? Accreditation and licensing fees?
from http://www.corp.ca.gov/pub/escrow.htm

 

While it may seem easy as there are so many such firms, the reality is that there are countless restrictions surrounding that industry. Sorry to say but like I would tell any of my clients, unless you have $100k to even consider it, then it's not worth the headache.

 

Besides, you need something else than money to gain credibility.

That could be a serious drawback with some many scams out there.

 

I am not trying to compete with them.
It would be in house for my domain marketplace.
similar to what scriptlance has