Buying privately when money still owed on loan.

Romer1 wrote:

mleekamp wrote:
Agree with whats said...we have done this. Bank draft made out to the bank...do the transaction at the bank...go to the DMV. What makes it hard is if the loan is at a bank that is not local, as can happen.

That's the case here, not local. Have bank wire money to lienholder?

In this case on the day of the sale have the seller print off a payoff notice. (notice should have VIN etc to prove correct) Take the trailer, registration, payoff notice to your bank. Call the lender and verify wire instructions. Have your bank send the wire and have the title sent to you. Sign a bill of sale. Take the trailer home.

If you are paying more than the debt get the seller a check for the balance. If you are paying less than the debt the seller needs to present cash for the deficiency so you can wire the full payoff amount.

I sold a motorcycle once and I still owed money on it. First thing we did was let the buyers know that we had a lien on the bike and the nearest bank was two hours away. I came up with the idea of after they agreed to buy the bike and they drove 5 hours to get it. I had a bill of sale already typed up and we went to a notary and had the bill of sale notarized. They gave me the cash, I went to the bank and paid off the lien and had the bank mail the title to the new owners. Everything went smooth and that's the way I would want it done if the bank was closed and I was the buyer.

I sold a car for More than what I owed.
I had the buyer send a check for the entire sale price to the bank.
The bank sent me the title and a check for the over-payment.
I forwarded the title to buyer.
It was easy.

Romer1 wrote:
Whats the best way to handle when owner still owes money on loan?

You'll need a third party handle the money, not the guy that owes on it.

capndan771 wrote:
Our purchase in similar situation went well because the note was held by local bank. Since the bank held the loan we met there with the owner, made out the check to the bank and the owner. The bank and the owner co-signed, cancelled the lien on the title, and then the bank notarized the title. We took the title to DMV and transferred ownership and owned the RV. No matter how you do it, having bank AND owner on your check assures that owner doesn't cash the check without clearing the lien against the RV.

That's what we did once. Took care of any chance the old owner didn't clear the title.

If it was me, I'd have the owner pay off the loan first and get a clean title, otherwise I'd walk. Reread TusconJim's post, how much grief are you willing to go through? Because the possibilities are endless.

mleekamp wrote:
Agree with whats said...we have done this. Bank draft made out to the bank...do the transaction at the bank...go to the DMV. What makes it hard is if the loan is at a bank that is not local, as can happen.

That's the case here, not local. Have bank wire money to lienholder?

Oh this brings up some unpleasant memories for me, and I was the seller.. We had an old TT with a small balance on it. We sold it through a private party ad, and we were very clear with the prospective buyer that we needed to pay off the loan before the title could be switched. He made out a check to the bank for the balance owed, and a check to us for the balance. Together, we mailed the check to the bank. Then I waited on the title, and waited, and waited. The new owner was getting rightfully upset when 30 days had gone by and the he still didn't have the title.

I started calling the bank two weeks after the transaction. They said it takes a while to process. I kept hounding them. After about 45 days, they said they'd mailed out the title two weeks after we mailed the payment to them.

The title never came and after 60 days, I had to contact the DMV in California for a duplicate title. It was finally sent to us and of course, it still showed the bank as the lien holder. Since the bank was in Colorado, I took the duplicate title and drove from California to Colorado so I could go to the bank and get the title transferred and notarized.

While I was in Colorado, I called the DW to check in. She told me that lo and behold, the original title had come in the mail while I was on my trip! It had been postmarked almost two months earlier, and the envelop was extensively damaged. It looks like the long delay was due to the post office.

While I was gone, DW contacted the incredulous new owners, gave them the title, and showed them the envelope with the post mark. They were apologetic for getting angry, but we certainly understood their position.

To make a long story short, deal locally, and conduct the business at the bank or lien holder instead of relying on mail to do your transaction.

Agree with whats said...we have done this. Bank draft made out to the bank...do the transaction at the bank...go to the DMV. What makes it hard is if the loan is at a bank that is not local, as can happen.

Romer1 wrote:
Whats the best way to handle when owner still owes money on loan?

Your check should be payable to the lien holder, and meet at their place of business!!

If the sale price is less than the balance owed, be sure the current owner has the funds to pay off the difference.

You want verification of Title!! Then make sure all is done correctly to get the title transferred.

This is much easier if you are not financing.