Brent Bowman

Question r'e Form 4 sales

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7 posts in this topic

Hello,

I'm working on selling off my NFA collection because the wife and I are only a little over a year away from starting our move from Idaho to Hawaii to start our retirement plan and unfortunately you can't own Machine guns in Hawaii. I haven't been hanging around the NFA boards for awhile and haven't sold any of my guns for awhile so I have half way forgotten the processes and am not up on current terminology. So how are most Form-4 sales transactions conducted these days in terms of payment when the firearm is going out of state? I had an inquiry on one of my guns for sale asking if I was ok with doing a "50/50 transaction"? I wasn't sure what to say because I wasn't sure exactly how the "50/50 transaction worked. So exactly how does a "50/50 transaction" usually work and is it a safe way for everyone involved to handle Form 4 transfers going to an out of state buyer? Any other advice regarding how to best sell my NFA collection would be appreciated.

Thank you,

Brent Bowman

208-484-1583

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Ok Brent, here is the deal. You as the seller hold all of the cards in your hand. You have the gun that someone else want's to spend a whole lot of money to obtain. On top of that, it takes time for the transaction to take place 1-2 months for you to do a form 4 to a dealer or a year or more for a form 4 to another individual if the buyer happens to be in the same state as you are. The buyer has to hope and pray that you are a man of your word for that time. He has to hope that you don't flake out, run off, sell the same gun to multiple people, etc. A 50/50 deal is good for the buyer in that he only risks getting ripped off for half of the purchase price. It is good for you in that you see that he is serious in completing the transaction. Now, folks worry about what if the form 4 gets approved and "I can't get the guy to come up with the other half" and now the ATF thinks the gun is his. Even though the paperwork may now have the "purchasers" name on it, the gun is still yours until you hand it over to him. You can cancel the forms at any time by simply calling the ATF and canceling the transfer. So, you are protected. In this instance, you got paid 50% of the selling price which you get to keep, because that is what you and the buyer agree upon, "you don't have the money within X days of form 4 approval, you loose your deposit" and then get to turn around and sell the gun again. 

I helped broker a deal for one of our customers (an older guy who didn't know much about the internet) on the old Subguns board for an MP40 and that was a 50/50 deal. It went off without a hitch. Everyone was happy.

Hopefully that explains it a little bit.

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Thanks, I appreciate the info. Sounds like a 50/50 deal is probably a pretty reasonable way to go about it, especially on the more expensive guns.

Thanks again,

Brent Bowman

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Brent:

Don't use a 50/50 sale when you dont have to. Get your money up front.  This reduces the potential problem of incomplete payment.  If your buyer cant pay more than 50% down this may be indicative of a problematic financial situation.

In buying and selling over the years and in liquidating estates I have always paid the full price up front or collected the full price up front even with dealers.  Asking for full payment is a good way to weed out questionable buyers. Life is too short to deal with flakey potential buyers. There are plenty of strong buyers out there who are able to send you a cashiers check by overnight mail.  

  Always check out your buyer.  Consider and provide for the possibilty that your buyer won't qualify as a lawful transferee.  This has been an increasing but unusual problem in recent years in my law practice.

 

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50/50 deals were the norm before prices skyrocketed and transfers didn't take 8-12 months.

Speaking from experience; too many things can happen in 8-12 months that may kill the deal; death, divorce, illness, loss of job etc. If a buyer backs out because of any of the aforementioned reasons, it results in a waste of time, and possible conflict with the buyer wanting a refund, on the money you may no longer have.    

Full payment upfront is the only way to sell C3

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I don't do 50/50 deals. I require full payment up front. Like Frank said there are way to many things that can go wrong with the delay at NFA.

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Thanks for the info guys, I appreciate it greatly. It seems like everyone that has inquired about the guns has asked for a 50/50 deal. I definitely see the potential for problems, especially these days.

Thanks again,

Brent Bowman

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