Buying from an international seller?

[Moonspinner]

I'd do it for a great deal, but wouldn't deal with it for an ordinary deal....

15% under normal seems like a good baseline...

This exactly because you have to go in accepting that you might have to fork over 15% of the sales price a year after you buy the contract. We’ve purchased from an international seller and wouldn’t do it again. We were not told until we got the paperwork which annoyed us. The entire situation was very stressful and that kind of stress is not worth it for us personally. We are just risk adverse.

 

[IsDVCForMe?]

This exactly because you have to go in accepting that you might have to fork over 15% of the sales price a year after you buy the contract. We’ve purchased from an international seller and wouldn’t do it again. We were not told until we got the paperwork which annoyed us. The entire situation was very stressful and that kind of stress is not worth it for us personally. We are just risk adverse.

Going through it now and not too stressed. Just going to make sure we get documentation that the 15% is being withheld and submitted to the IRS.

 

[VGCgroupie]

This exactly because you have to go in accepting that you might have to fork over 15% of the sales price a year after you buy the contract. We’ve purchased from an international seller and wouldn’t do it again. We were not told until we got the paperwork which annoyed us. The entire situation was very stressful and that kind of stress is not worth it for us personally. We are just risk adverse.

Exactly so while I get frustration for international sellers, the market treats them differently for a legitimate reason. Buyer is taking a risk not the seller.

 

[Moonspinner]

Going through it now and not too stressed. Just going to make sure we get documentation that the 15% is being withheld and submitted to the IRS.

Exactly so while I get frustration for international sellers, the market treats them differently for a legitimate reason. Buyer is taking a risk not the seller.

Yes, so if the stress doesn’t bother you, it could be a good chance for a deal. One thing is to make sure your title company is one of the “good” ones. I realize @IsDVCForMe? Is already in the process, but that is the only advice I have for future buyers going ahead with an international purchase.

 

[geargrinder]

Couple years ago buying from an international seller was the only sure way to get through ROFER. They were taking most everything except active sales and Grand Cal.

When I bought from an international seller, it reduced the stress. Actually, had to pay slightly above going market just to have the security of a contract that wasn't going to be taken in ROFR.



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[IsDVCForMe?]

Couple years ago buying from an international seller was the only sure way to get through ROFER. They were taking most everything except active sales and Grand Cal.

When I bought from an international seller, it reduced the stress. Actually, had to pay slightly above going market just to have the security of a contract that wasn't going to be taken in ROFR.



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At this point, I’m more scared of wiring the money to the title company rather than the FIRPTA stuff lol.

 

[VGCgroupie]

At this point, I’m more scared of wiring the money to the title company rather than the FIRPTA stuff lol.

Wiring money is always nerve wracking.

 

[walt34]

This exactly because you have to go in accepting that you might have to fork over 15% of the sales price a year after you buy the contract.

How so? You as the buyer will already be withholding 15% of the agreed purchase price (or the closing/title company will do it for you). Why would you bid another 15% below market price? You can, of course, do so, but might be losing out on a good deal. It's of course up to you what you feel comfortable with.

 

[juliebee]

Wiring money is always nerve wracking.

I went into my bank and made them do it instead of me doing it at home. It gave me peace that if they did it wrong there would hopefully be some recourse. Luckily everything was fine!

 

[Cfabar1]

How so? You as the buyer will already be withholding 15% of the agreed purchase price (or the closing/title company will do it for you). Why would you bid another 15% below market price? You can, of course, do so, but might be losing out on a good deal. It's of course up to you what you feel comfortable with.

To me it isn't worth the risk... and just because an international seller is listing, doesn't mean it is a good deal...

I'm not even saying it has to be 15% off of a Disboards ROFR price, but it better be on the lower side of average/typical prices at the very least... I'd hate to pay board sponsor prices - which tend to be high to begin with - and then find out I owe 15% on top of that....

 

[Moonspinner]

How so? You as the buyer will already be withholding 15% of the agreed purchase price (or the closing/title company will do it for you). Why would you bid another 15% below market price? You can, of course, do so, but might be losing out on a good deal. It's of course up to you what you feel comfortable with.

There is nothing in the contract that guarantees that the seller will pay the tax. My husband was livid about that contract. He got the title company to scratch out all kinds of stuff in the contract but he couldn’t get them to add a guarantee that we wouldn’t be on the hook for the 15%. In the end I had to convince him to just sign. The government ultimately comes after the buyer because they can and because it’s easy for them to do so. If all goes well=no issue at all. But that’s not what a contract is for. A contract is for when things do not go as planned.

 

[juliebee]

Yikes, reading all this has to give international buyers pause. If they ever want/need to sell, it sounds like they can take a larger financial loss than those sellers in the US.

 

[walt34]

There is nothing in the contract that guarantees that the seller will pay the tax. My husband was livid about that contract. He got the title company to scratch out all kinds of stuff in the contract but he couldn’t get them to add a guarantee that we wouldn’t be on the hook for the 15%. In the end I had to convince him to just sign. The government ultimately comes after the buyer because they can and because it’s easy for them to do so. If all goes well=no issue at all. But that’s not what a contract is for. A contract is for when things do not go as planned.

It's the buyer's responsibility to withhold 15% and send it to the IRS and the title company typically handles this for the buyer. It's not up to the foreign seller to pay or not pay the tax. The seller can then claim it back.
You'd only be on the hook as the buyer if the title company messes this up.

 

[walt34]

I'm not even saying it has to be 15% off of a Disboards ROFR price, but it better be on the lower side of average/typical prices at the very least... I'd hate to pay board sponsor prices - which tend to be high to begin with - and then find out I owe 15% on top of that....

Well, you wouldn't, unless the title company messes this up. And there are lots of other ways the title company can mess up any transaction, so you have to trust them to a degree anyway.
The confusion comes up because the IRS doesn't collect FIRPTA from the seller or the title company but from the buyer. If everything goes as it should, the title company withholds the 15% and sends it to the IRS (or holds it in escrow until they receive a withholding certificate).

Although you haven't written this, the general tone of the discussion here makes it seem as if the buyer is liable for a tax that the seller has neglected to pay. But this isn't the case. It's the buyer's responsibility to withhold 15% from an international seller in the first place and the title company typically does it for him.

What you and others are suggesting is to reduce the offer price because you don't want to be exposed to the risk of having to deal with the IRS (which is only a problem if the title company doesn't handle this correctly). This is, of course, your prerogative, but in many cases you will probably be outbid by someone who trusts the process.

 

[IsDVCForMe?]

Well, you wouldn't, unless the title company messes this up. And there are lots of other ways the title company can mess up any transaction, so you have to trust them to a degree anyway.
The confusion comes up because the IRS doesn't collect FIRPTA from the seller or the title company but from the buyer. If everything goes as it should, the title company withholds the 15% and sends it to the IRS (or holds it in escrow until they receive a withholding certificate).

Although you haven't written this, the general tone of the discussion here makes it seem as if the buyer is liable for a tax that the seller has neglected to pay. But this isn't the case. It's the buyer's responsibility to withhold 15% from an international seller in the first place and the title company typically does it for him.

What you and others are suggesting is to reduce the offer price because you don't want to be exposed to the risk of having to deal with the IRS (which is only a problem if the title company doesn't handle this correctly). This is, of course, your prerogative, but in many cases you will probably be outbid by someone who trusts the process.

Outbid by someone who doesn’t understand it’s an international seller*

 

[walt34]

Outbid by someone who doesn’t understand it’s an international seller*

Outbid by someone who understands that the 15% are withheld from the money the seller gets - not paid extra by the buyer.

 

[IsDVCForMe?]

Outbid by someone who understands that the 15% are withheld from the money the seller gets - not paid extra by the buyer.

The seller picks the broker and title company, correct?

 

[walt34]

The seller picks the broker and title company, correct?

The seller decides who they want to list with (broker). For timeshare in Florida, the buyer often chooses the title company, even if some brokers have their preferred company. If the buyer doesn't trust the title company, they should certainly address that.

 

[IsDVCForMe?]

The seller decides who they want to list with (broker). For timeshare in Florida, the buyer often chooses the title company, even if some brokers have their preferred company. If the buyer doesn't trust the title company, they should certainly address that.

I have no complaints at this point but I did not have the option to choose the title company. Again, both broker and title company have been very quick, responsive, and helped clarify things. Wouldn’t certainly have no problem recommending either.

With that said, the IRS is going after the buyer not the seller in this scenario if something does go wrong at the end of the day. It’s a hard for both parties.