I think I found a good deal locally on a Machine Gun I’ve been looking for.

Not new to the NFA game, lots of SBR’s and Silencers but never purchased anything from an individual.

What’s the best way to protect yourself (the buyer) in these transactions?

Seller looking for all the funds upfront.  Anyone seen some form of standard contract I can use that would be legally enforceable?

Tried bunch of different google searches and came up empty.

Thanks in advance for any suggestions.

You can use an escrow service

See if an ffl will act as a broker and hold the MG and ensure the paperwork is completed.

Ask for a reference or two. Draw up a BOS with whatever terms you want and go with seller to have it notorized. Use a certified bank check (instead of cash) so there is a paper trail of payment. Remove and take home all accessories and use your own gun lock through magwell for piece of mind while it sits in his safe.

So glad I joined this forum.  It never ceases to amaze me in regards to knowledge and willingness to help out fellow gun guys and gals.  GD , well that's different there.  When I move to Tennessee I may have an NFA question.  At least I know where to ask it without getting blasted by some snarky bastard.

I’ve only bought one machine gun. It was an in-state private transfer that was arranged on the EE here actually. In my case the seller took a 10% deposit and held onto the gun and my deposit until the transfer was approved. Once the form 4 came back I went to his house to pick the gun up along with a certified check.

I was comfortable with the arrangement. The seller had a history of good transactions here and if he had vanished with my money I was only out the deposit.

At the same time if I had ghosted or flaked on the sale he could have canceled the transfer and would have still had my deposit.

be careful, I see MGs for sale on armslist and similar websites all the time and almost all are a scam.

Keep in mind there are dealers who will pay 80% of market value or better up front so why would anyone bother selling to an individual for say 50% of marlet value, it just doesn't make sense. To good to be true is often the case.

I would never pay up front unless I had seen the MG and the Form 4 in person. I would need a very nice write up, such as a bill of sale and would want to be the one submitting the Form 4. Get a copy of their drivers license and dig a little, check out their facebook account, see if they own their property. People with no digital trail, no family close by, and that rent can easily up and move (intentionally or unintentionally) with out notice. Now all of the sudden you are trying to track down someone who moved across the country and no longer lives at the address or in the state for which the Form 4 was approved.

Its one thing to get scammed out of a couple hundred bucks, but we are talking tens of thousands of dollars, I woulnt just hand that kind of money over without putting a lot of effort into making sure the deal is legit.

Personally Ive always bought my MGs from dealers and will happily pay the 10-20% markup for the peace of mind knowing I will get my MG in the end. They go up in value so quickly, the small premium is offset by their appreciation in value. I buy my MGs with the intention that I will keep forever and pass on to my son, so paying a extra grand or two doesn't make much of a difference in the big picture.

I purchased a Colt 614 from a guy in state back in 2004 or so. But he was known by my local FFL/SOT. We did have a contract. I paid in full. And were I selling I would either expect to be paid in full or have a provision in the contract that if the buyer could not produce the balance within 30 days of the approved transfer, they would forfeit the money paid and the gun and the transfer would be voided.

As others have posted, you must meet the individual in person, inspect the item before you buy.

If you do not know the individual, have the seller transfer the gun to a local FFL/SOT. And consider using an attorney for escrow. Individual to dealer F4 is getting approved very quickly. Once it’s at a trust worthy dealer, you’ll be in the clear.

I have bought a decent number of machinegun from individuals over the years.

Ultimately, my advice is to never buy a machinegun from an individual where you don't meet the seller in person and are able to inspect the gun and paperwork.

I usually start with a phone call.

Lets chat about the gun (and or machineguns in general) and does he seem like somebody who would own a transferable machinegun, whats is his name, where does he live, does he seem normal, why is he selling the gun, when did he get it, who did he buy it from, does he have anybody he could provide as a reference (i.e. his normal NFA dealer who he buys his suppressors, etc. from that will vouch for him), etc.

If that all goes well do some research on the seller.  Is the seller a guy who is married, has lived in the same house for years, has a stable local job history, etc. with verifiable ties to the community....or....is the seller somebody who has little to no verifiable background, is in between jobs, just moved to the area and rents a trailer, etc.   Today almost everyone has some traceability online through local property tax rolls, linkedin profiles, social media, etc.

If the guy seems normal, stable, the story he told you over the phone checks out  to the best of your ability, than go meet them in person.   Inspect the gun and the paperwork.  Does the story he told you over the phone match up.    Look for any inconsistencies and/or does something not seem right.

Red flags to me are wanting to be paid in cash, won't show you the gun,  doesn't have the original paperwork (only a copy), the paperwork doesn't match the gun or doesn't match the owner and his physical address (or one of his historical addresses), won't sign a basic sales contract, etc.

Most scammers won't bother to go through all of this effort and will abandon the interaction long before you ever get to the in person meeting stage.   If somebody won't talk to you on the phone and or meet you in person when you are trying to purchase a 5 digit pricetag item from them than my advice is to just walk away.

I have only had one machinegun deal go south over the past 20 years and looking back I had a bunch of reservations about the seller but really wanted to the gun as they didn't come up for sale often.  Ultimately I was able to get it all resolved and got the gun but not without a lot of problems , delays, and anguish.

I recently passed on  a really good deal on an FAL because it just didnt seem right after the phone call with the seller.   I think the guy was legitimate but there were paperwork concerns, he was hard to understand, story seemed off, etc.  The next step was a plane ride and hotel stay and it just wasn't worth my time to take the next step so walked away.

If you want a standard sales contract email me and I will be happy to send you a template I have used.

Honestly, it's one of the reasons i paid a little extra and bought mine from reuben.

OP here...thanks for all the replies.  Very helpful.

Guy is willing to meet FtF and let me inspect the gun and the current Form 4.  So that is a plus.

jbntex - e-mail inbound re: your offer,

Excellent advice, as always.

Funny, I’d rather take my chances dealing with a guy I’ve never met on here (which I have — great member, fine transaction) or UT (which I have) than deal with him (on the phone). Hard pass.

An extra $200 but would be worth it. Will also add time to the transaction.

If doing a FTF, are you paying 50/50? 100% upfront? Who's gun is it while waiting; can he still shoot it?  How much can he shoot it?

I sold one in state FTF a while back. We did a 50/50, I suggested he bring a trigger guard lock and let him lock it up. At the 50% payment, I considered it sold/his and wouldn't shoot it anymore.  With transfers taking up to a year, think abt how you want this handled; especially if you are paying 50% or 100% upfront...

In a local AZ sale....the seller actually pulled the guts out of the gun and gave them all to me.
He kept the registered part, in this case the tube.
This of course was after inspecting the gun and test firing it.

I also like the idea of a trigger lock that only you have the key for.

like buying a used car, the seller is more important than the car...   take all the parts except the registered one at time of sale.

after getting screwed by a dealer who also screwed over a dozen other people selling cans that couldn't be delivered with documentation provided to ATF via forms and realizing nobody in LE cares, not sure I would ever do another machine gun transfer, maybe not even with a dealer given that a lot can happen in the time required to approve a form.

I suppose one advantage to buying from an in state person or dealer, for that matter, is that you are more likely to be able to take them to court, even if it's just the small claims court in their locale, if they fail to conform in some way on the transaction.  Having been taken by several out of state dealers for amounts in the $500-$1000 range, it would have been nice to be able to at least get a judgment against them.

Best of luck, and enjoy your machine gun.

MHO, YMMV, etc.

The internet is a blessing and a curse for many things.

When it comes to purchasing MGs it means you have access to hundreds of MGs for sale at any given moment, even hard to find MGs can be located within a short period of time. Where as before you were limited to just the people within maybe 50-100 miles of where you lived and what limited selection they may or may not have for sale at any given time, all passed on by word of mouth.  But it also means we don't know the people we are buying from which makes it easier for scammers to infiltrate the MG community. They can also steal photos we post and use them in ads and the internet has driven up the price of MGs making it a desirable target.

Actually, before there was the internet, there was Machine Gun News and, of course, the J. Curtis Earl Catalog to give us something to dream about owning when we got old enough to buy guns.

this,

If I can not BS with you on the phone for an hour. You can not have my money.

the BSers have gotten better, not necessarily a fool proof tactic...  most of the thiefs will have spent all the money if u ever get a judgement.  plus, hiring a lawyer to recoup $10k is a money losing proposition.  Esp. when the person you are taking to court is a deadbeat.

One sale I got into was with a guy who had the guns, but in his late fathers name. His dad died something like 15 years before I bought one. Should have been transferred out of the estate back then.

I filled out the paperwork and he had a stack of wills and estate stuff to send in with my Form 4s.

He said he’d transferred a bunch of guns that way and it worked before.

Of course mine was the one that didn’t, being disapproved after 15 months.

I got my money back (75% at first, the rest maybe 6 months later). He’d spent some during the transfer process.

Lesson: make sure the firearm is actually in the seller’s name and in his possession.

This sale turned me off to any further Class 3 buys.

I always pay all money up front and that’s it.

I always just talk on the phone.  If they are good and into the hobby big time, you can tell fast.

But that’s me.

Machineguns are a sellers market.

Buyers who want to use an escrow service will be passed on. No one i know who owns a machinegun would use this. Theyd all pass snd have another buyer who will pay 100% up front.

Buyers who want a dealer to hold the gun have no idea whats involved with transfers. You want the buyer to transfer the gun to a dealer, before the buyer does that hes going to make you pay 100%. Its going to cost you 2x 200 dollar stamps and 2x wait periods. So you might as well skip the dealer as your going to pay him anyway (the seller).

If a seller wants to protect themselves. Go see the individual first. Go see the gun, see his form 4. If you know he actually has the goods make the deal. People who own legal machineguns are some of the most law abiding people. It amazes me that someone who wants to pay the money for a form 4 machinegun doesn't want to buy a plane ticket or the drive to inspect the mg before making a deal.

A formed 4 machinegun will not leave the owners possession until the atf approved the new form 4. This is going to cost you a 200 dollar stamp and all the money upfront.  Everyone has to go thru this wait and process. The 1st one is the roughest... everyone after that is easier. Just chill out and be patient.

Problem with that idea is Reuben is " allot " extra!

I'm a lawyer but I'm not YOUR lawyer. I'm also not a contracts lawyer, I'm a criminal lawyer.

So take this as what it is: generalized internet musings from a person interested in the conversation, NOT legal advice.

YOU NEED A WRITTEN CONTRACT.

Pay an attorney $200 to draft you one. You will NOT be sorry. (Hint: keep the contract, and reuse the shell for your next sale! See, I'm not just about getting lawyers paid.)

Almost every state (maybe even all of them) have laws about enforceability of contracts. If the item being sold is over $500 and the contract isn't evidenced by a writing, it's unenforceable. Read that again, slowly. If you don't have a WRITTEN contract with all of the terms in it, you aren't going to be able to enforce it in court. Period.

With that said, from a pure contract law standpoint...

The biggest thing beyond hammering out the specific terms is that you want to build in RISK PROTECTION.

If the gun is going to be stored in the owner's possession while awaiting the transfer to come through, you need to address who assumes the risk while the Form 4 is pending. This isn't as simple as it sounds, and it's definitely not guaranteed to be the seller.

Big companies do this all the time with various products being sold; once something is sold and is being held at the warehouse for the convenience of the buyer (often another big company), there have been millions of dollars spent in litigation determining who owes when the warehouse burns down before the pickup.

If the guy is storing the weapon for you until the Form 4 comes back, and his house burns down or is burglarized or he becomes a convicted felon or his wife files for divorce and the assets of their marriage get frozen during that litigation, or... or... or... there's a million scenarios as to how YOUR machine gun may get lost, stolen, destroyed, or otherwise tied up. A LOT can happen in 6-12 months. Hammer these contingencies out in the contract.

Also, if you're the SELLER, you need to consider some of the same contingencies: What happens if the buyer can't come up with the rest of the money? What if he dies in a car crash? What if he gets a domestic assault charge in the interim and can't take possession? Do you keep the deposit, do you determine a set liquidated damage amount to get for your trouble, plus keep the gun? Does he still owe you the full amount? Does his estate owe it to you? Who do you transfer the gun to if his estate DOES pay? You can see where this can get complicated.

These types of disputes come up REGULARLY and people pay a TON of money litigating them. A $20K firearm probably isn't worth the money to litigate over. That's all the more reason to have it hammered out in a contract so you can resolve the issue without going to court. Point to the provisions if there's a dispute, and settle it before going to court. Court is EXPENSIVE. Civil court is PROHIBITIVELY EXPENSIVE because of all the extra steps: motions to dismiss, various other motions, evidentiary hearings, discovery, expert witness fees, and trial expenses. So spend your money up front and get a lawyer to draft you a solid contract. It can stem off a lot of disputes and a lot of litigation if/when a problem arises.

Lastly, and this is again a generalized contract issue, you want an integration clause and severability clause in the contract. Integration clause says that this particular writing addresses ALL of the terms of the contract, and excludes any prior verbal or written agreements. It also says that modification cannot occur unless agreed upon by both parties in writing. It's a protection to keep someone from showing up with some chicken scratch on a napkin and say it was part of the deal (happens often enough that there's a standard clause to protect against). Severability clause says that if one provision of the contract is determined to be unlawful or unenforceable, the rest of the contract stands as if it were erased. Otherwise, if one part is determined to be unlawful, the entire contract may get thrown out.

Bottom line: with purchases this big, you need to protect your financial interests. The best way to make sure that these interests are protected is to have an competent attorney draft you a written memorialization of the contract. You're dropping tens of thousands on a machine gun, don't cheap out and ignore the simple protections that a well-drafted written contract can provide.

Sir...if you have been taken by several out of state dealers for hundreds of dollars please do post their names & businesses here so the rest of us don't get screwed too!

It is very easy to write that a buyer should seek out an attorney to produce a contract for the sale of a MG.  First, you have to find one that knows anything about the NFA to write it up and then hope that it is enforceable in the other state.  As to getting a plane ticket to go visit your potential buy that is cost prohibitive to most of us.  We save & save for our new toy and now have to add plane tickets, rental car, hotel fees, etc. There are many people in this game that can easily take these trips across the US to view these guns but the rest of us can't.  Also, as stated before allot can happen before the gun is transferred to the buyers home state. BIG leap of faith to fork over tens of thousands to a stranger who you talked to on the phone and he or she put some photos on an auction site or forum.  I agree most are legit but what if you met the thief.  
I recently was considering a couple of gun purchases on an auction site.  One auction was there for weeks and the seller never answered not one of my inquiries.  I sent at least two.  I did not bid that auction.  Another showed up on a forum and GunBroker and after several back & forths and after the seller offered references and I accepted he removed the gun from the auction abruptly and emailed me a cock & bull story about removing the gun from sale.  The big time MG dealers have good reputations but charge dearly for their guns.

It's easy to say it, because its the right answer.

The OP asked how to protect himself. That's simple: get someone who knows the law to help him write an enforceable contract.

You can also add provisions including which state's law will be controlling and in which state the parties must dispute the matter. These are all things possible that an attorney can do.

If you want to protect your interests on a purchase that costs tens of thousands of dollars, do it right.

How about if buying in-state and waiting on the transfer, we just put the gun in a case, seller’s lock on the case, and the buyer takes possession.

ATF even suggests that in some instances. I don’t see why it would not also be acceptable in this instance as well.

From ATF’s NFA FAQ:

...the firearm could be left or stored... at the house of a friend or relative in a locked room or container to which only the registered owner has a key. The friend or relative should be supplied with a copy of the registration forms and a letter from the owner authorizing storage of the firearm at that location.

Buying in-state is fine " if " you can find the toy you want.

I was going to buy in state, a seller having the item in question on a trust they could add me to or an LLC they could sell me is even better than a Form 3 dealer transfer from my perspective -- I'd be added to the trust or LLC and take possession on payment while submitting the Form 4 to transfer to my own entity.

Most of my NFA items are on one LLC, but for my MG I set up a unique LLC just for that item that I could simply sell to a buyer if the time came to sell.

This seems like a post that should be stickied at the top of the MG page here.

Yes, you should have something in writing. I did an in-state MG purchase and paid 100% up front. The seller and I agreed to use an SOT/FFL/02 to hold the gun until the transfer was approved. I paid him for his time and it made me feel a little more at ease.