International seller?

[rachaelg]

I'm currently in negotiations with an international seller on a small-ish contract. I think I've read that these transactions can take longer to close, which I am fine with, but what else should I know about purchasing from someone overseas? It seems like they aren't super willing to negotiate on price per point because of FIRPTA tax. Is this something that we might be able to get around by me paying their desired price per point but negotiating them paying closing fees?

 

[ocdb8r1]

On your first question - keep in mind it may take even longer than normal for an international seller right now. With everything in lock-down, it can be very hard to get the required notarizations to conclude the sale (where work from home orders are still in effect, most US embassy's are closed so you can't use them for a US style notarization and most foreign notarizations are more complicated and require additional documentation to evidence validity in the US).

As to your second question, I call BS! 1) FIRPTA only withholds 15% of the gain on a sale and not the total sale price...and while I know it is fully possible the seller is realizing a gain, I don't see how this is any reason not to be negotiable; and 2) I am surprised that DVC qualifies for FIRPTA treatment as it is only a RTU timeshare...I would have thought this would make FIRPTA not applicable. Regardless, I see this as a (non) negotiation tactic.

 

[DougEMG]

On your first question - keep in mind it may take even longer than normal for an international seller right now. With everything in lock-down, it can be very hard to get the required notarizations to conclude the sale (where work from home orders are still in effect, most US embassy's are closed so you can't use them for a US style notarization and most foreign notarizations are more complicated and require additional documentation to evidence validity in the US).

As to your second question, I call BS! 1) FIRPTA only withholds 15% of the gain on a sale and not the total sale price...and while I know it is fully possible the seller is realizing a gain, I don't see how this is any reason not to be negotiable; and 2) I am surprised that DVC qualifies for FIRPTA treatment as it is only a RTU timeshare...I would have thought this would make FIRPTA not applicable. Regardless, I see this as a (non) negotiation tactic.

There is a 15% withholding on the entire sale price unless you have submitted the proper documentation showing you have a ITIN and what the original purchase price was. Last time I did it the accountant charged me $500+ to do all the paper work.

 

[rachaelg]

On your first question - keep in mind it may take even longer than normal for an international seller right now. With everything in lock-down, it can be very hard to get the required notarizations to conclude the sale (where work from home orders are still in effect, most US embassy's are closed so you can't use them for a US style notarization and most foreign notarizations are more complicated and require additional documentation to evidence validity in the US).

As to your second question, I call BS! 1) FIRPTA only withholds 15% of the gain on a sale and not the total sale price...and while I know it is fully possible the seller is realizing a gain, I don't see how this is any reason not to be negotiable; and 2) I am surprised that DVC qualifies for FIRPTA treatment as it is only a RTU timeshare...I would have thought this would make FIRPTA not applicable. Regardless, I see this as a (non) negotiation tactic.

Thank you for this, we are really in no rush at all as we already have a trip planned and booked for January, so the soonest we would be looking to use any points would likely be at least a year from now, if not longer.

Your thoughts about FIRPTA align with what I was thinking. Its my understanding that 15% is withheld and then returned to the seller if there is no gain. So, I'm not quite sure I understand how it would impact them in a significant way...we'll see what they decide.

 

[rachaelg]

There is a 15% withholding on the entire sale price unless you have submitted the proper documentation showing you have a ITIN and what the original purchase price was. Last time I did it the accountant charged me $500+ to do all the paper work.

Ah! That makes a bit more sense. If they are anticipating paying $500+ to an accountant, I can see how they would not want to come down very far in price. We'll see how it shakes out. If it's not the right contract and seller for me, that's fine...I'm not in a big rush.

 

[DougEMG]

As an international owner dealing with the US taxes when selling DVC is a huge pain in the butt. Tried doing the paper work myself once and it was a nightmare.

 

[a742246]

I'm currently in negotiations with an international seller on a small-ish contract. I think I've read that these transactions can take longer to close, which I am fine with, but what else should I know about purchasing from someone overseas? It seems like they aren't super willing to negotiate on price per point because of FIRPTA tax. Is this something that we might be able to get around by me paying their desired price per point but negotiating them paying closing fees?

Just make sure your title closing company fills out all the proper paperwork. Otherwise the IRS will come looking for you. It happened to me, but the closing company made it right. But if they didn't??????

 

[fixerupper]

I just closed on my contract with a Canadian seller. It took them almost two weeks to get the paperwork back, which I overnighted. There is also an additional form you have to fill out as the buyer, but it is quick and nothing needs to be notarized on the buyer's end.

I got them down $15pp but the contract was way over priced, and I still paid more than I probably should have. I think they also had another contract listed, so that may have played a part. The negotiations were concluded at the beginning of March, so just as things were starting to change - before I realized the impact it could have.

 

[Bearval]

I just closed on my contract with a Canadian seller. It took them almost two weeks to get the paperwork back, which I overnighted. There is also an additional form you have to fill out as the buyer, but it is quick and nothing needs to be notarized on the buyer's end.

I got them down $15pp but the contract was way over priced, and I still paid more than I probably should have. I think they also had another contract listed, so that may have played a part. The negotiations were concluded at the beginning of March, so just as things were starting to change - before I realized the impact it could have.

I purchased from an international seller and the list price at the time was close to $10.00 per point less than all the other similar contracts.

 

[poofyo101]

I returned my escrow and closing docs over a month ago now for an international contract. Still no signs of them returning it due to the corona shut down.

 

[TiggsTail]

UK owner here. In answer to your first question, notarisation of documents shouldn’t be a problem. Guidance was issued in May to enable notary publics to carry out their function remotely i.e. video conferencing if other social distancing measures couldn’t be achieved. Our local notary is seeing clients in his office car park and carrying out notarisation in that way.
We sold one of our contracts to a US buyer last year and did have to pay a tax agent about $500 to deal with the FIRPTA reclaim. Our DVC agent also withheld the FIRPTA amount when accounting to us for the sale proceeds.

 

[Minniesgal]

Ah! That makes a bit more sense. If they are anticipating paying $500+ to an accountant, I can see how they would not want to come down very far in price. We'll see how it shakes out. If it's not the right contract and seller for me, that's fine...I'm not in a big rush.

I am an international seller and when I sold i set myself a floor price below which I simply wouldn't sell. My criteria was that i wasted to get back the amount I paid for my DVC after paying the agents fees and the 15% withholding. At my time of sale prices had increased enough for me to do this. In fact if i had wanted to hold out I might have been able to get another $10 per point based on what others were advertised for.

They may have a similar floor price in mind