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I have approached a domain owner about purchasing their domain. We have agreed on a price, what is the safest/best way to send them payment and ensure I receive the domain?

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There are some website that offer "escrow" services:

Selling/buying a domain is safe that way.

You can also do a down-payment (lets say 50%), the owner transfers the domain, and you pay the other 50%. The latter is more about trust.

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    Escrow.com is the only online escrow service to trust. I've used them a few times more than 5 years ago and had no problems with getting paid from them. Sedo.com or GoDaddy are also good for domain transfers. – Anagio Aug 19 '12 at 5:04

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