The problem escrow solves
In a direct transfer, one party must move first. A buyer who pays before the transfer has no leverage; a seller who transfers before payment has none either. Escrow ends the standoff by placing a neutral third party between them.
The provider is paid a modest fee for verifying facts rather than for taking sides, which is exactly what a one-off transaction needs.
The sequence, step by step
Terms are agreed in writing. A transaction is opened at the escrow provider. The buyer deposits the funds, which the provider confirms but does not release. The seller then transfers the domain, either by pushing it inside the current registrar or by issuing an authorisation code.
The buyer confirms that registrant control now sits with them. Only then does escrow release payment, and the transaction closes.
Timing and what to check
A push inside the same registrar is usually completed within hours. A transfer between registrars can take up to five days because of registry rules, so agree in advance which method will be used.
Before releasing funds, verify the registrant details, confirm the expiry date and enable privacy if you want the ownership record kept discreet.