Buyer's Protection When Purchasing a NFA Weapon

[Grease Gunner]

Hi All:

When one purchases a NFA Weapon, the seller will be

retaining possession for as long as 8 months

while the buyer waits for the form 4 to go through.

I am totally not used to long term transactions!

What should the buyer get from the seller?

Are there canned "sales agreements" out there?

I am in the process of buying one thats brokered

and I am supposed to pay 100% now since thats

customary in NFA.The sale is being brokered.

Broker informed me that the seller does not want to

disclose his phone number.

I think thats unusual.

Thoughts?

All comments and suggestions welcomed.

Thanks

Haris

[Sandman1957]

Have you seen the gun. I have not run into this before. Is it a reputable broker? I have always bought directly from the person or dealer who has physical possession of the gun. I have on the other hand, assisted others in purchasing from someone else. In those cases I had access to the gun, took photos myself etc and was able to confirm it was a legitimate gun. I also always got a copy of the Form 4 or whatever it was registered on.

 

Many folks are doing 50 50 now due to the wait times. All depends on the seller.

 

Good luck. If you don't have a good warm fuzzy connection, wait for another gun.

 

Sandman1957

[huggytree]

I have bought one brokered gun (from the largest broker).....if your broker is large and well known i wouldnt have any worries.....i never asked for the actual sellers phone #

 

most sellers want 100%, but ive done a couple of 50/50's.....had one only ask for 10% down and 90% upon the form 3 being done(i paid 50/50 anyways)

 

if you pay in full i think its reasonable to ask for your full gun, minus the Receiver or registered part....this will stop the seller from continuing to shoot your gun (if your worried about it)

 

in the end it comes down to trust...ive bought from GB from gun shops i didnt know, ive bought from 1 broker, ive bought from 1 individual that i setup a escrow account with his local gun shop...form 3 got ok'd, he dropped the gun off to ship and the gun shop paid him...

 

also depends on $$$....if you have a $6k Mac 10 or a $50k Thompson you should procede with different amounts of caution.........i never flew to see any of them...i did mine all on trust and on line photo's....all were exactly as described....ive bought and sold many FA parts and accessories....ive never been cheated once....just be cautious

 

what did you get?

[johnsonlmg41]

The main reason people use brokers is to avoid phone and other correspondence. I don't find that unusual at all. If you bought a house from a realtor would you ask for the sellers phone number? And would you expect to get it? If you are not used to long term transactions this hobby is not for you. The leap of faith here is that you are buying a sort of highly regulated item, of high value, and generally this creates an aura of highly responsible and generally ethical people involved in this hobby. People also use brokers for security reasons and general privacy so you should respect that. Naming the broker will get you better feedback overall. HTH

[Black River Militaria CII]

If you are buying a weapon that was listed on www.subguns.com you can post an inquiry on that sites "Board of Inquiry" asking about the broker's reputation. There has to be a connection to that site to use that page though.

You can post requests for references for a broker on various other MG sites, too.

I broker a lot of MGs and have done it for more than thirty years. i will only broker MGs for those people who have been my customers over a period of time so that I know they are honest, reliable, and knowledgeable about NFA matters. If a seller asks me to broker a weapon for him and I do not know him, I ask for references.

Due diligence must be done about the seller or broker regardless. Seek references until you are satisfied that the person is honest and reliable. If that cnz't be done, move on.

[ppgcowboy]

When I got mine, I asked who the previous owner was and found out he was a respected member here and that was enough to put my mind at ease. But your hand does shake when you write the check non the less.

Edited November 24, 2016 by ppgcowboy

[DZelenka]

The last SMG I purchased was for $100 down and $8,900 upon receipt of stamp. It was from a local individual. I've even had them done with nothing down and pay in full when the stamp comes through. Likewise, I have paid in full or done 50/50 deals. I know a local dealer that will allow you to pay monthly but you have to be paid in full before he will deliver the gun. The most important part is to know who you are dealing with even if you only know him over the internet. Get references. Look at the existing paperwork. Get detailed pictures of the gun. There are members of this board that I wouldn't know from Adam, but I have followed their postings enough to get a good feel for whether I would do business with them. One word of caution, IF THE DEAL DOESN'T FEEL RIGHT WALK AWAY.

 

Dan

[HB of CJ]

Excellent post and thank you everyone. A few major Class 3 dealers I inquired with refused to give me the time of day regarding a potential $10,000 NFA purchase. I desired detailed photos of known potential problem areas within that platform. They were quite rude in my opinion. When I brought to their attention the potential concerns with my purchase, they got angry and told me to go elsewhere. Quite unbelievable.

 

Specifically cracked AR18 bolts and M2 Carbine receiver bridge spec and crack conditions.

 

It is an interesting situation. The few NFA items I have purchased were done years ago when perhaps I did not know any better. They all turned out OK and THAT major advertising NFA CLASS 3 dealer remains today very respectful to me. They have spent the time to answer my specific detailed questions. Is this my experience only or is it something to be expected within the general NFA marketplace TODAY?

 

This NFA dealer also spent some time giving me known histories of the firearms. But .... NO prior owner contact information.

 

Tax questions? If a seller takes half down and the other half upon receipt of the buyers tax stamp, and that process takes 6 months, what happens if the purchase drags through the first of the year? One supposes that half will go on one IRS tax return and the other half on the next years tax return? Perhaps unrelated to the question at hand, but perhaps not either. Yep ... lots of detailed pictures, lots of detailed description.

 

How does an individual selling occasional NFA items develop a good reputation? Difficult.

[Got Uzi]

I have had 100% down, 50-50, broken into three payments, and one where I gave the seller my word of honor to have it paid before the Form 5 transfer into state would be complete (gave me 90 days and I had it paid off in 30) It all depends on what it is and where they are. I'm not a fan of 100% down when it is out of state or can't physically see it. That also being said, you could have it set that you'll pay when the Form 4 is done and ready to mail.

[huggytree]

Tax questions? If a seller takes half down and the other half upon receipt of the buyers tax stamp, and that process takes 6 months, what happens if the purchase drags through the first of the year? One supposes that half will go on one IRS tax return and the other half on the next years tax return? Perhaps unrelated to the question at hand, but perhaps not either. Yep ... lots of detailed pictures, lots of detailed description.

 

How does an individual selling occasional NFA items develop a good reputation? Difficult.

 

what do taxes have to do with buying something 1 year and finishing the purchase another year? where is the section on the 1040 that say ''purchased a NFA item?''

 

you get a reputation by selling things on GB and buying things on GB.....also join a forum and try to meet people.....ive bought and sold things from members of this forum and also Uzi talk pretty frequently......ive sent and received thousands of $$ worth of items from strangers.....had a few ship the item before they even got the $$ from me

 

if its a $6,000 Mac 11 id pay in full

if its a $40,000 M16 id pay 50/50

if its a $60,000 Thompson Id fly to see it and take all the parts home w/ me

Edited November 22, 2016 by huggytree

[tricky9914]

One other thing I always do (unless I am dealing with a well referenced seller), is ask for a photo of the gun, with my name written on a piece of paper, sitting on top of it... Also, a photo of the form, again, with my name written on a piece of paper sitting next to it. That way I know its real. I have done that along with checking references, speaking with the seller on the phone, among other things.

 

The overall advice here is sound: If anything, at all, looks, sounds, or feels uncomfortable - just pass... Another deal will come along.

[dalbert]

Haris,

 

We've spoken and corresponded about this, so I'm familiar with the details, as you have related them to me. I think your deal will go through ok...However, you will probably be nervous the entire time, and rightly so. I certainly would be. This goes back to the certain value of dealing with a very reputable dealer who has the item in stock, in their name, under their full control. It brings peace of mind, and is a considerable factor in an NFA transaction, no matter how much money is involved. It's kind of an insurance policy, so to speak. I'm not going to put down folks who broker NFA items...In some cases, it can be a very useful way to do business for the owner and broker. (Notice that I did not include the buyer in that statement) However, it is a different business model than having the item in inventory, and it has many potential drawbacks, hopefully none of which ever come to pass. Just as an example, look at the differences in photos that you see with brokered items. Are they hiding something, or have they never taken a picture of a gun? Getting additional pictures necessary to make a decision, and be confident in that decision can be an exercise in futility. Other aspects of the transaction can easily go the same way...

 

David Albert

dalbert@sturmgewehr.com

[Normal1959]

When I got mine, I asked who the previous owner was and found out he was a respected member here and that was enough to put my mind at ease. But your had does shake when you write the check non the less.

 

I agree with that and also a good gunbroker rating or ebay helps me.

Eric

[Robert Henley]

There's a number of historical posts related to this thread if you can access them via the search function.

 

1. There's a lot of posts related to using a "buyer-seller agreement" and what it should include (it can get pretty complicated and the more detail the more likely the seller will just sell to someone else if there are other buyers). You shouldn't buy any high value NFA item unless you trust the seller IMO.

 

2. A 50/50 deal or something similiar is better for the buyer because the seller is motivated to complete the transaction and collect the final 50%. There's a number of posts related to this issue too. However, I have had sellers take the position that they want 100% up front. I had one SOT who stated that once BATF approves the transfer the gun legally belongs to the buyer (who the gun was transferred to). To do a 100% up front would require a lot of trust in the seller IMO.

 

3. On the tax issue (I believe the reference was to taxable income) I think what was being referred to was capital gains taxes. You don't hear much about that because more than likely very few people are doing anything. If you buy an asset and sell it you incur short term (less than a year) or long term (more than a year) capital gains taxes if you sell it for more than you paid for it. Of course, income tax evasion can be very, very costly.

 

4. On the broker not wanting to provide the owners contact information that has been addressed above. From the broker's perspective, the buyer could do an "end around" and try and deal directly with the owner which would cut the broker out of his commission. The broker not wanting to give owner contact information would be "the norm" IMO.

 

5. If you pay 100% up front you definitely want to get all the parts of the gun except the registered receiver.

 

The whole process takes a "leap of faith" IMO. However, as pointed out, a reputable dealer can be a big plus especially for those new to the hobby IMO. The more you get into the hobby the more NFA friends you will make which a lot of selling/buying is occurring via this group.

 

Robert

Edited November 24, 2016 by Robert Henley

[DZelenka]

There's a number of historical posts related to this thread if you can access them via the search function.

 

1. There's a lot of posts related to using a "buyer-seller agreement" and what it should include (it can get pretty complicated and the more detail the more likely the seller will just sell to someone else if there are other buyers). You shouldn't buy any high value NFA item unless you trust the seller IMO.

 

2. A 50/50 deal or something similiar is better for the buyer because the seller is motivated to complete the transaction and collect the final 50%. There's a number of posts related to this issue too. However, I have had sellers take the position that they want 100% up front. I had one SOT who stated that once BATF approves the transfer the gun legally belongs to the buyer (who the gun was transferred to). To do a 100% up front would require a lot of trust in the seller IMO.

 

3. On the tax issue (I believe the reference was to taxable income) I think what was being referred to was capital gains taxes. You don't hear much about that because more than likely very few people are doing anything. If you buy an asset and sell it you incur short term (less than a year) or long term (more than a year) capital gains taxes if you sell it for more than you paid for it. Of course, income tax evasion can be very, very costly.

 

4. On the broker not wanting to provide the owners contact information that has been addressed above. From the broker's perspective, the buyer could do an "end around" and try and deal directly with the owner which would cut the broker out of his commission. The broker not wanting to give owner contact information would be "the norm" IMO.

 

5. If you pay 100% up front you definitely want to get all the parts of the gun except the registered receiver.

 

The whole process takes a "leap of faith" IMO. However, as pointed out, a reputable dealer can be a big plus especially for those new to the hobby IMO. The more you get into the hobby the more NFA friends you will make which a lot of selling/buying is occurring via this group.

 

Robert

If you were to request all of the parts except the receiver to be shipped, you double your chance of having a shipping issue. What are your damages if the shipper loses the non-receiver parts of a numbers matching gun? Have fun arguing that with the shipper. The only way I have received the non-registered parts on a gun is when the seller personally delivered them to me. Otherwise, I let them ship me the whole gun when the transfer is approved. Once again, it comes down to trust.

 

Dan

[emmagee1917]

 

There's a number of historical posts related to this thread if you can access them via the search function.

 

1. There's a lot of posts related to using a "buyer-seller agreement" and what it should include (it can get pretty complicated and the more detail the more likely the seller will just sell to someone else if there are other buyers). You shouldn't buy any high value NFA item unless you trust the seller IMO.

 

2. A 50/50 deal or something similiar is better for the buyer because the seller is motivated to complete the transaction and collect the final 50%. There's a number of posts related to this issue too. However, I have had sellers take the position that they want 100% up front. I had one SOT who stated that once BATF approves the transfer the gun legally belongs to the buyer (who the gun was transferred to). To do a 100% up front would require a lot of trust in the seller IMO.

 

3. On the tax issue (I believe the reference was to taxable income) I think what was being referred to was capital gains taxes. You don't hear much about that because more than likely very few people are doing anything. If you buy an asset and sell it you incur short term (less than a year) or long term (more than a year) capital gains taxes if you sell it for more than you paid for it. Of course, income tax evasion can be very, very costly.

 

4. On the broker not wanting to provide the owners contact information that has been addressed above. From the broker's perspective, the buyer could do an "end around" and try and deal directly with the owner which would cut the broker out of his commission. The broker not wanting to give owner contact information would be "the norm" IMO.

 

5. If you pay 100% up front you definitely want to get all the parts of the gun except the registered receiver.

 

The whole process takes a "leap of faith" IMO. However, as pointed out, a reputable dealer can be a big plus especially for those new to the hobby IMO. The more you get into the hobby the more NFA friends you will make which a lot of selling/buying is occurring via this group.

 

Robert

If you were to request all of the parts except the receiver to be shipped, you double your chance of having a shipping issue. What are your damages if the shipper loses the non-receiver parts of a numbers matching gun? Have fun arguing that with the shipper. The only way I have received the non-registered parts on a gun is when the seller personally delivered them to me. Otherwise, I let them ship me the whole gun when the transfer is approved. Once again, it comes down to trust.

 

Dan

 

Insure both shipments for the total value of the gun . It's what I do when the customer wants it done . We do have the bill of sale to support the claim of value .

Chris

[buzz]

How does this "broker" idea work? Haven't heard of it before.

 

 

The problem the buyer has is that this is a seller's market.

 

If you insist on paying 50/50, chances are the seller will just sell the gun to another buyer. '

 

 

The other problem is that unless the sale goes through a dealer or auction house, the buyer must trust the seller to not rip him off.

 

People who make private purchases of expensive jewelry will use an escrow service but we don't have anything like that.