I'll sell this to you on ONE condition........

[buyatari]

I've just been offered something that I've wanted for a long time.

 

However, it comes with a few conditions including that if I ever sell it that the current seller has right of first refusal at the current selling price.

 

He is asking 5 figures so it isn't cheap. Has anyone here ever been offered anything under conditions like this? Has anyone here ever gone ahead with such a sale?

[SquareChaos]

If you're buying for investment it seems like you'd want to pass. If you just want to own it, then why not?

 

One thing I'd add... if you agree, get them to factor in inflation on the buy back.

[mister_not_so_nice]

I've sold something under those conditions.

 

Another collector and I were in a stalemate trying to put a book back together. I had the DPS (not really making headway on putting a book together) and he had the rest of the book except two pages. So, eventually I relented and sold him the DPS. I'd rather see the book complete than have the DPS. But I told him I would like the chance to buy the pages if he ever decided to part with them. Eventually he offered them back to me and, thankfully, I was in a position to purchase them from him.

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

[SquareChaos]

I've sold something under those conditions.

 

Another collector and I were in a stalemate trying to put a book back together. I had the DPS (not really making headway on putting a book together) and he had the rest of the book except two pages. So, eventually I relented and sold him the DPS. I'd rather see the book complete than have the DPS. But I told him I would like the chance to buy the pages if he ever decided to part with them. Eventually he offered them back to me and, thankfully, I was in a position to purchase them from him.

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

No brainer if it's as you read it. I don't see much of a dilemma if that's the bargain though.

[malvin]

I've sold items under those conditions too, basically to friends at below market value, so the catch was that for re-sale I get to buy it back. I've also made it more complicated where the buy-back was indexed to an artists sketch prices.

 

They were al for a few hundred though, not 5 figures.

 

Malvin

[buyatari]

If you're buying for investment it seems like you'd want to pass. If you just want to own it, then why not?

 

One thing I'd add... if you agree, get them to factor in inflation on the buy back.

 

No I'm not buying it with the intention of selling or as an investment. The idea of such a condition hanging over my heads does bother me. It makes me feel as if it isn't really mine.

[buyatari]

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

It means that if I buy it today for X dollars if I do sell it back to him in say 20 years it will be for X dollars. No appreciation.

 

[Bronty]

Pass. Wait til he wants to sell it for real. Right now the longer you hold onto it the worse the deal is for you.

 

Maybe a compromise would be for the term to expire after 5 or 10 years. Indefinitely is not right because it penalizes you for holding onto the item.

[fsumavila]

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

It means that if I buy it today for X dollars if I do sell it back to him in say 20 years it will be for X dollars. No appreciation.

That sounds like a very one-sided deal in the seller's favor. I would pass on having that condition hang over the purchase. Even if you don't plan on ever selling it, why paint yourself into a corner that forces you to miss out on a potentially big profit IF something ever comes up?

 

[comix4fun]

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

It means that if I buy it today for X dollars if I do sell it back to him in say 20 years it will be for X dollars. No appreciation.

 

 

So he's either forcing you to keep it if it's someday worth a million OR he's forcing you to give him an interest free open ended no end date loan secured against the artwork.

 

That's not a right of first refusal btw. Right of first refusal includes matching an offer not rescinding the original deal.

[mister_not_so_nice]

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

It means that if I buy it today for X dollars if I do sell it back to him in say 20 years it will be for X dollars. No appreciation.

That sounds like a very one-sided deal in the seller's favor. I would pass on having that condition hang over the purchase. Even if you don't plan on ever selling it, why paint yourself into a corner that forces you to miss out on a potentially big profit IF something ever comes up?

 

Agreed, I'd pass.

[porcupine48]

sounds like free storage...

[comix4fun]

sounds like free storage...

 

 

 

It sounds like "Regret Insurance"

 

He sells it and never has to see it resell at auction for what he sold it for times X.

 

He sells it and it's worthy a bazillion dollars someday and the new owner is silly enough to agree to this term he gets the piece back at the "Way Back Machine" price.

 

Either way...NO REGRETS!

 

Brilliant! Nothing anyone should ever agree to do, but BRILLIANT!!

[porcupine48]

for him....

[comix4fun]

well, yeah.

[Claudio]

The idea of such a condition hanging over my heads does bother me. It makes me feel as if it isn't really mine.

That is exactly how I would feel.

[thehumantorch]

 

When you say the seller "has right of first refusal at the current selling price" does that mean he can buy it back for what he is selling it to you for? Or for the current price at the time you decide to sell? If the former than that doesn't seem like a good deal for you. For example, you buy the piece today for $XXXXX and hold it for 8 years. In that time the price has gone up several thousand dollars or more. You decide to sell, but have to offer it to the previous owner. He says he'll take it back. then puts it to auction the next month and reaps the gain.

 

If he gets first refusal at whatever the current FMV is at the time you want to let the piece go, I think that is only fair.

 

It means that if I buy it today for X dollars if I do sell it back to him in say 20 years it will be for X dollars. No appreciation.

 

Pass unless he's old and you're likely to outlive him

[delekkerste]

I've just been offered something that I've wanted for a long time.

 

However, it comes with a few conditions including that if I ever sell it that the current seller has right of first refusal at the current selling price.

 

And people thought the BWS TAR was bad...

 

 

No I'm not buying it with the intention of selling or as an investment. The idea of such a condition hanging over my heads does bother me. It makes me feel as if it isn't really mine.

 

You're effectively long the art and short a call option against it with a strike price at your purchase price. So, you're effectively short a put option on the art, which is not the same as ownership. So, you're right - it isn't really yours in this scenario. I'd pass on it.

[Ironmandrd]

A ridiculous arrangement. Pass.

 

Or make it a right of first refusal at the price you determine you would be willing it sell it at whenever you sell it in the future or whenever you receive an offer on it that you would otherwise take.

[rotembk]

Gene, it's funny seeing you synthetically recreate what is simply a right of rescission. I wonder if there's an engineer in the house who'd like to use their own professional vocabulary to describe this arrangement.

 

And as the others said, the advice one of the parties here should listen to is: