The bank should have a Third Party Release of Lien form. Buyer and Seller sign it. When the loan is paid off, the bank will send the title and documents directly to the Buyer's address.
This is what we did when we sold our TT with a lien on it. Then after our loan was paid and clear, we called the bank and closed out the loan account. We sold for more money than the loan was...so the bank sent the check to us, the Seller. The Buyer does not need to know what you owe, just pay the agreed upon sales price.
Also, we drafted a Bill of Sale and had any DMV forms to notify DMV we sold the vehicle. Both Buyer and Seller signed those.
