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Hello,

I'm looking for some advice here. I've never sold a used car, and now have a buyer for my car. I owe money on it and the price we agreed on is just shy of what I owe.

The buyer is in a real hurry as she is driving a rental. I just want to make sure I cover myself from any problems. I plan to go with her to her lender and pick up a certified check. I then have to send it to my lender alongwith a little extra to pay off the loan.

When should I sign the car over to her? Is it ok to do it after I get the check? My lender says I should wait to receive the title from them in 5 business days. The buyer basically wants me to sign a bill of sale and be done. But I am on the hook with my lender till the loan is paid off.

Thanks in advance...
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You can't really "be done with it" until you get the title from your lender and it's sent to the State for processing out of your name into hers. If she wants to take possession and get it on the road sooner, be sure she provides you written proof of insurance (a Certificate of Insurance) from her insurer naming you as an additional insured until the title to the car is definitely out of your name.
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As long as you are paid in certified funds from a bank, and the car is properly insured, i think you're ok. you've certainly found a cooperative buyer.
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When I recently sold a car with exactly the circumstances you just mentioned I:

Called my lender and asked for what was remaining on the loan and the payoff amount. Since the buyer was in hurry and I had the cash, I forwaded a check directly to the lender and picked the title up from them with a statement that the entire loan was paid. Each state does things a little differently......so make sure to check what your state requires.

With the title and statement that the loan was paid, I signed all the paperwork and left it with my GF. The GF part was because I was going out of the country. In my absense, she received the check from the buyer (certified) and handed the buyer my paperwork.....one copy for me and one for her (you can have them fill out duplicates if you do not have a Xerox).

When I got home I cashed the check and all was good.

If you do not have the cash to pay off the lender in advance, the buyer needs to send a check to the lender to remove the lien. Do not sign over anything until this has been done since the bank will hold you responsible for the balance....not the buyer. You can also call the lender and ask how they usually arrange the payoff.

Keep a close eye on the certified check you receive. Checks are easy to copy and change. Calling the bank that issued the check to confirm it's legit is a good idea (make sure the buyer knows you will do this......this will scare away scam artists).

Easy process as long as everyone is on the up and up.
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Forgot to mention, once she received all the paperwork she drove to the DMV and registered the car. She drove off that day.

Another option is to drive to the buyers home and sign over everything and leave the car in the buyers hands. Make sure you remove all your plates, insurance and registration info from the car.
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Make sure you remove all your plates, insurance and registration info from the car.

Insurance and registration - definitely.

Plates seem to be a state-by-state thing. In California (my state) the plates stay with the car.

--Peter
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Thank you all for the helpful responses. The buyer has indeed gotten insurance with me listed on it. She has given me her bank's number to verify the certified check.

I have one more question: She'd like me to sign the bill of sale today, before I have received the title from my lender. I think that is not right. I think I can give the car to her, take the check but wait to sign the bill of sale.

Thoughts?

Thanks in advance.
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I have one more question: She'd like me to sign the bill of sale today, before I have received the title from my lender. I think that is not right. I think I can give the car to her, take the check but wait to sign the bill of sale.

Without the bill of sale you still own the car. While the car may be insured etc, what will happen if someone decides to sue for something is anyone's guess.

Personally, I would not let her take possession of the vehicle until everything is complete. Too many things could happen that could create all kinds of problems later on.

Another reason not to let her take possession is that she will no longer be in as big a hurry to get everything complete. You could find yourself waiting to complete the bill of sale 1 month from now.

Better safe then sorry.




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I have one more question: She'd like me to sign the bill of sale today, before I have received the title from my lender. I think that is not right. I think I can give the car to her, take the check but wait to sign the bill of sale.

Thoughts?

Thanks in advance.



If you take her money, you should give her a Bill of Sale. There is no reason not to give her a Bill of Sale - It details what she is paying the money for. I'd ask her to sign the Bill of Sale, to the extent that she is taking possession and ownership of the car, detailing the Year Make Model, mileage and VIN, on a specified date and time and have the signatures on the Bill of Sale witnessed... Then, if something comes up, you have documentation what transpired when.

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I think I can give the car to her, take the check but wait to sign the bill of sale.

I would NEVER give someone that much money without at least receiving a Bill of Sale. It's not an unreasonable request, at all.
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I'd ask her to sign the Bill of Sale, to the extent that she is taking possession and ownership of the car, detailing the Year Make Model, mileage and VIN, on a specified date and time and have the signatures on the Bill of Sale witnessed...

Be sure to check on both emission and mileage responsibilities that you, as the seller, might have in your state.

rad
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What I did recently when I sold my Corbin Sparrow long distance (me in CA, buyer in FL) was:

We agreed on all the terms, and I sent a "sample bill of sale" with all the terms and everything spelled out except "payment received". Then he wired me the money and when I received and transferred it into another account I gave him an actual bill of sale saying "payment received".

In your case though, there's no harm in giving a bill of sale once you have the check... if the check is no good the sale is invalid and so it's not like the buyer can hold onto your car legally if they give you a counterfeit check.

The real concern though is physical possesion of the car. If you are worried about the money getting to you, it would be reasonable to not allow the buyer to take delivery of the vehicle until the check clears.

At any rate, you can and should notify the DMV as soon as the transfer occurs.
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sign the bill of sale-she has all her ducks in a row, she is properly insured andshe has paid you in full for the car. in any case, a bill of sale is just an agreement to deliver specified goods for a specified price. she just wants something in writing saying that in exchange for the check, you are promising at some time in the future to deliver clear title to her. she is the one trusting you, not the other way around. without a signed bill of sale, you could theoretically cash her check and then use your extra key to take the car out of her driveway and then you'd have possession and legal title and she'd have nothing but her word against yours that there ever was a contract for sale.

here is what you want your bill of sale to say.

joe agrees to sell, and beth agrees to buy, a 2001 toyota echo for xxx. sale is as is as shown, with no warranty of any kind express or implied, except any from the manufacturer which might exist. joe has received xx dollars in payment, and promised to deliver clear title, with title guaranteed not to be branded as salvage, rebuilt, junk, or any similar defect, promptly after received from bank of big bucks. seller warrants title to have no liens or encumbrances other than bank of big bucks, and seller acknowledges his responsibility to have that lien removed in exchange for the consideration provided by beth. (consideration means the certified check she has given you) should the funds provided by beth be determined to be unavailable for any reason whatsoever by the bank of big bucks, this d eal is null and void and the goods will be returned forthwith or be subject to immediate recovery without notice by joe. (that means if her certified check bounces, which i dont see happening, you can grab the car)

it really sounds like your buyer knows what she is doing. ive been in the business of closing car deals for seven years-the whole thing sounds on the up and up to me.

hope this helps

dean
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Personally, I would not let her take possession of the vehicle until everything is complete. Too many things could happen that could create all kinds of problems later on.

what could happen? seriously, what could happen that would injure the seller? he has been paid in full with certified funds, the car is insured, he has a signed bill of sale, all he is waiting to do is deliver title. i'm not an attorney. state laws vary. maybe in some state there is a risk to the seller. please enlighten me as to where his risk is? i guess in a litigation happy country where people are comfortable lying when it benefits them, there is a risk.... maybe that's what you are worried about.

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A simple power of attorney will allow the buyer or their agent to sign the title in the seller's space when received. This will save another meeting between the two of you. I agree with others. When you receive funds, you should give a bill of sale AND transfer the vehicle. Dealers use POA all the time when taking a trade where the customer doesn't have the title. I bet your DMV even has some FAQ with a sample POA on their website...if not, check some other states at the link to the left.
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Personally, I would not let her take possession of the vehicle until everything is complete. Too many things could happen that could create all kinds of problems later on.

what could happen?


The only thing I can think of would be the possibility of an uninsured or under-insured accident - But, he says she has insurance with him named as Additional Insured - Owner/Contract of Sale - Seller... and/or perhaps her lingering in getting the title and registration transferred from his name to hers, once she gets the title. If liability during recording of the transition of ownership, or damage to the car on which there is a lien in his name, is a concern, keep coverage on the car until sure that the paperwork transferring ownership is on its way to the State (probably about $2/day, give or take) and send a letter to the DMV with a copy of the Bill of Sale and release of title asking them to cancel the plates as the vehicle has been sold, when the title is endorsed and tendered to the buyer... Actually, since it sounds like the buyer's bank will have a lien on the car, her bank will probably be more anxious to see that the title is transferred with their lien properly recorded than the seller.

Dunno what else might could happen. People buy and sell cars every day. Maybe Twit could add a list of recommended To Do's/Don'ts to the side-banner.

Bob
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