Selling an RV with a lien

[PIlots123]

Hello everyone. I am in the process of selling my Class A. Kids are in their mid to late teens and we are still a few years from retirement so the RV is sitting most of the time unless we can all get our schedules coordinated. Time to let someone else enjoy the lifestyle as much as we have.

My question relates to the logistics of payments. I did searches on the forum and learned a lot but still have questions so I appreciate everyone’s patience.

The RV has a lien at a local credit union but the selling price that I hope to get should cover the loan amount. Paying off the loan ahead of the sale to get a clear title is not an option. The folks at the bank tell me that if the seller wires the money to the credit union, or pays for the RV in cash, they can release the lien and provide a clean title on the same day. They indicated that if the buyer pays with a cashier’s check (or uses any means other than wire/cash) it would take 10 days until the funds are released at which point they lien would come off the motorhome.

If I’m the buyer, neither of these options thrill me. I’d be hesitant to wire money to a stranger’s bank for obvious reasons. Nor would I want to wait 10 days to take possession of an RV that I paid good money for. As the seller, I obviously want to make sure that I got paid before turning over the keys and signing over the title.

So how do people do this? I must be missing something because individuals buy and sell RV’s all of the time. Thanks in advance for your help and guidance.

[valhalla360]

PIlots123 wrote:
Let’s say we agree on a price and shake hands on the deal. Sounds like I provide the buyer with my bank info and loan # and he has his bank send the money to my bank?

First...make the deal in WRITTING. There are standard sales agreements you can download online or even a short written statement with price and as-is condition is better than a verbal contract.

Do the transfer at the bank and get confirmation from the bank that the money is in your account and the bank has no recourse to take the money back if there is an issue with the transfer the next day.

If the buyer chooses a method of payment that takes a few days to clear, so be it. You don't want to find out after they drove away that the check didn't clear. If that's a deal breaker, you probably saved yourself a lot of hassle.

As far as the lien amount...it's irrelevant. All they need is proof from the bank that the lien has been cleared. Now if you are upside down and can't pay off the excess at the time of sale...now you have a problem.

[way2roll]

Don't make this more complicated than it is. This happens thousands of times a day every day. People buying and selling cars/property with liens. Talk to your bank that holds the lien, tell them you are selling and they will tell you how to handle. Bank to bank transactions are very common and easy and if the buyer is getting a loan his bank will then hold the lien. This is really very simple. Your buyer does not need to know what you owe, just agree on a price, tell your bank that's what you are selling for, anything in excess of the amount to release the lien will be funded to you. Easy cheesy. The bank will handle all the paperwork, settlement sheet, transfer of funds, lien release, title exchange, etc. Just check the figures.

[T18skyguy]

Don't know if you've found a buyer yet, but beware anybody who wants to buy sight unseen, or gives you a long complicated story. Also, don't let them send a "friend" to make the purchase. Before they come I tell them I'm going to ask to see their I.D.. If they balk then game over.

[twodownzero]

When I bought my toy hauler, there was still a lien on the title certificate. The seller provided me a notarized lien release from the bank at the time cash was exchanged. I took the title certificate and that lien release to the MVD office here in New Mexico and I had no problem leaving with a clear title (having paid cash for the unit). In fact, the MVD tech almost forgot to ask for it. I provided it to her and I think she actually gave it back to me at the end of the transaction.

My rig was only a few thousand dollars, and the people lived in a $400k house, so I wasn't worried about them committing a felony for a few grand. The notarized lien release was years old, because they'd paid off the loan and not sought a title certificate without the lien.

If I were a seller and was trying to sell an encumbered piece of property, I'd be more concerned about what the buyer might think. The seller really has no obligation to clear the lien; the lien is the concern of the purchaser who takes afterward. That said, if we're talking about a lot of money, most people would use an escrow service or be concerned unless they could get a clear title certificate when cash is exchanged, and I wouldn't blame them one bit.

In the commercial world this probably wouldn't be a big deal because these things are done in the ordinary course of business all the time. In the face to face transaction world, I wouldn't be willing to risk more than I could afford to lose (as a buyer) to deal with this situation.

I suspect that there are gazillions of stolen and encumbered trailers out there since it's pretty rare for a cop to run a VIN on a trailer or even run the plates for that matter. I'm not encouraging committing crimes or anything, but I definitely worry that if my trailer was ever stolen, I'd never see it again. Fortunately I have insurance. A motor vehicle is a lot different, though; the police are running plates all the time, even if they don't pull your car over.

[soren]

On a related note, I would keep in mind that a lot of potential buyers will have dealt with at least a few folks in your position that have liens, owe more that what the unit is REALLY worth, and have wasted the potential buyer's time. I got to the point, while buying my last two used class A rigs, that I would cut to the chase real fast when talking to a private owner. I knew what a fair price range was, and that most will start out asking for more than that amount. Within the first couple minutes of talking to a seller, I would ask how flexible they are on their asking price? I lost track of how many folks were ask crazy amounts, sometimes well above dealer asking prices, and answered, "well, I really can't negotiate, that figure is my loan balance".

There are many sellers that don't seem to comprehend that what they owe on a rig has less than zero to do with what it's worth, and they are either going to have to ride it out until they are right side up enough to sell it, or pony up the cash to get themselves out of the hole they are in. Not suggesting the seller is in this situation at all, but if you shop long enough for used motorhomes, you tend to cringe when a private seller says, "well, there is a lien, but it's no problem" For a lot of sellers it's actually a huge problem.

[oldmattb]

I bought an RV with a lien. Seller disclosed the lien when we started talking seriously. I had no problem with that.

We met at the seller's bank. I had a check issued by my bank. He had the remaining balance. His bank had the title. His bank got the money, seller got the debt released. I left with a notarized title.

No problems at all. I suspect that any questions about the validity of the check were answered to the seller's bank's satisfaction before we walked out.

Matt B

[twodownzero]

time2roll wrote:

Chum lee wrote:
There is an element of risk here, but . . . . . the potential buyer should independently confirm the outstanding loan balance with your finance company, then negotiate the difference between the sales price and the loan payoff amount with you.

The amount of the debt is none of the buyers business. No need for the seller to share this information when negotiating price.

A lien is a transfer of a portion of one's property interest. The debt is not the buyer's business, but the value of the lien definitely is. Those are usually the same number.

[Lwiddis]

Banks and credit unions trust each other. They do this everyday.

[imgoin4it]

Just go to bank and tell them what you want. Or your credit union where it is financed. They probably will set up an escrow account where the account will hold your title until they get the money from buyer. When money is in the escrow account count they will release the lean and send title to new owner. Works very well. Buyer and seller are both protected. Think this is basically how it’s done when every one is saying do a bank to bank transfer

[Chum_lee]

time2roll wrote:

Chum lee wrote:
There is an element of risk here, but . . . . . the potential buyer should independently confirm the outstanding loan balance with your finance company, then negotiate the difference between the sales price and the loan payoff amount with you.

The amount of the debt is none of the buyers business. No need for the seller to share this information when negotiating price.

It might be the buyers business, . . . . hopefully not. I know, I know, it's an outside chance, but, if I was buying a used MH with a lien on it (any vehicle really) it WOULD be. What if the seller is upside down in the vehicle? (owes more than it's worth which is a high probability with a used MH) I wouldn't want to buy any vehicle (without prior knowledge) where I could potentially assume some of the debt of someone else. IMO, knowing what the current owner owes his bank (and confirming that's the only loan/lien on the vehicle) reduces the risk when you consider the overall cost of the purchase. IMO, there are just many flaky sellers as there are buyers. Do some research on title loan fraud.

Banks do these types of transactions all the time and the laws vary from state to state. What if the buyer is acting as their own out of state agent and there is no bank on the cash buyers part? Buyer beware!

Chum lee

[time2roll]

Chum lee wrote:
There is an element of risk here, but . . . . . the potential buyer should independently confirm the outstanding loan balance with your finance company, then negotiate the difference between the sales price and the loan payoff amount with you.

The amount of the debt is none of the buyers business. No need for the seller to share this information when negotiating price.

[midnightsadie]

its done all the time .deal with the bank they do it every day.

[lots2seeinmyrv]

Make sure you get all the documents you need from Motor Vehicles Department too.

We had to have a Notarized Bill of Sale that our DMV provided. Also, we had to turn in our license plates. In our case, we got a refund from DMV on our remaining time we had on our plates.

All paperwork was signed by the Buyer and Seller in the bank with a Notary.

The bank made one copy each of all documents for both parties.

The Buyer does NOT need to know your loan balance, it is none of their business.

Agree upon the sale price and they provide the funds, period.

As long as the loan is paid off, the bank does not care. If you owe more than agreed upon price, you pay off the balance.

If you get MORE money than you owe on the Coach...the bank will give you a refund when it all settles, the Title is issued, and the Buyer does not need to know this.

If you get more money, simply call the bank to close out the loan account and they will issue you a refund check.

[Chum_lee]

There is an element of risk here, but . . . . . the potential buyer should independently confirm the outstanding loan balance with your finance company, then negotiate the difference between the sales price and the loan payoff amount with you. (the registered owner) The buyer meets your bank representative and confirms independently with them ALL the conditions of sale and title transfer. The buyer pays you (to your satisfaction) the difference between the sales price and the loan balance (your equity) and takes the signed over registration, (seller releases interest in vehicle) a signed, dated bill of sale, (written by you) the vehicle, and YOU to the bank where the buyer pays off the loan to the banks satisfaction. The bank releases the lien. YOU must accompany the buyer (in the vehicle) to the bank and make sure they pay the loan off prior to letting them drive away in the vehicle. (VERY IMPORTANT) Do not let the vehicle go (for any reason) until YOU have confirmed with the bank that the loan is paid in full to the banks satisfaction. (not yours) IMO, that will minimize (not eliminate) the chances of getting burned. This is NOT the time to listen to ANY fast talking wheeler dealer. If you feel uncomfortable for any reason, . . . STOP, and wait until you feel comfortable! In this type of transaction, time is your friend and the enemy of the potential scammer. Use your time wisely.


Chum lee