Escrow.com is good. You might want to have another 3rd party do it such as sedo.com. They take a fee from the seller but I think that might be better for a domain transaction. Sedo holds onto the money until the owner transfers the domain to sedo. Then they release the money to the seller and then they let you transfer the domain to you.

Look at sedo for more info. They are mainly a domain marketplace, but if perhaps you can do a private sale just between the two of you?