We have found a used car that we want to buy. The sellers are upside- down; they owe a bit more than they are getting for the car. They need our money to pay off the loan so we cannot get a clear title at the same time that we give them money.
We plan to give them a cashiers check made payable to their lender. They are going to get a Bill of Sale from the DMV and have their signatures notarized. (I don't know anything about such a thing as a Bill of Sale being available from the DMV but they seem pretty sure that it is available.) They will let us take delivery of the vehicle when we give them the check, and say that they will Fed-Ex the check to the lender and should have the title for us in about 10 days.
This is a tricky situation but I'm sure that others have dealt with it. We have been inside the sellers' home, have met their kids, and feel comfortable dealing with them. Is there any advice you folks can offer?
They can't get a bill of sale for the car until the lender releases it, assuming the lender holds the car as security on the loan. I'd contact the lender directlly and get instructions from them. You aren't buying the car from the current 'owners' you're buying it from the lender. Could be everything is fine, but deals like this don't always work out the way the parties intend. I'd be very careful. What happens if your check somehow gets lost in transit to the lender? Just my thoughts, I hope everything works out for you. Not getting the title in your name would turn out to be a real nightmare, even though you have the car in your hands.
To be safe you should transact the entire deal at the lender's office, that way you can get the released title immediately. Otherwise, the way you've outlined it above your are still exposed to the danger of not receiving clear title to the vehicle, especially if they happen to owe more to the lender than you are paying for the car.
Or, another method would be for you to hire an attorney for the hour or two it will take to shepherd this deal safely to conclusion.
I did something like this once. They too couldn't pay off the loan, they ssid, until they had my money.
I went over, signed a short contract for sale identifying the car by DIN and saying it would be free of all liens and encumbrances, and gave them a little more than 5000 in cash, got a receipt for the money. AIUI, none of this works if they skip town or have no money to pay me back. Perhaps they rent their house. A lot of houses are sold to the first resident, but when he leaves, he keeps the house as an investment and rents it.
They had said that one of them would go to the bank the next morning and pay off the loan.
And they did that, and the next day included in the papers iirc was something that showed the car had been paid off.
I guess I didn't pick up the car until the second evening, because I have no friends willing to take off from work just for something like this.
I too had been in their home, which it seemed they owned, and I too trusted them. AT the same time that I thought the man I dealt with was lying.
He had a teenage sun and a divorcing prgnant daughter, who had left her husband and was living at home again. So there were four of them with 5 cars iirc. He said they all wanted to drive the one he was selling me, because it was a convertible, and by selling it he would solve that problem. That's got to be the stupidest story I ever heard. If they all liked driving it, work out a system and sell one of the other cars. He must have been lying.
He said his 17 year old son had bought the car he was selling, which was about 7 years old, 6 months earlier, but now had bought a brand new car. Their house was nice, but I'm sure it had a mortgage and what kind of parents let a 17 y.o. buy a brand new car. Plus the new one wasn't a convertible, so it seemes to me, he loses his turn at driving the convertible they did have. That part seems almost like a lie too.
Nonetheless, I bought the car and spent NO money on repairs in the first 10 or 20,000 miles, which was more than 2 years in my case. There was nothing wrong with the car, even though it was 7 years old. (all my cars are 7 years old when I buy them and only one had anything seriously wrong with it, which I should have noticed if I had been paying attention, but I still would have bought the car for the same price.)
I like the idea of calling the lender and asking, if there is any problem with the sale. Ask how much is owed? Why not get a contract, and mail the check yourself, or together. Or go there. Be apologetic, but say your father insisted that you do it that way. You can be 60 years old and still have to do what your father or mother says on certain things. Money is usually the father.
Where is that necessary? Not in Maryland. Is that the normal mthod in our state, What state is that?????. Here the seller signs something, I forget what, either the back of the registration or a form, and doesn't have to notarize anythying, and the buyer gets the car registered on what he signs.
When people offer more than is necessary, it makes me suspicious. Maybe they don't mean a bill of sale. Maybe they mean possession of the Registration or Title. Do you live in a Title state. NOt every state has titles for cars.
How do you know the car is worth buying? Cases on the people's court all the time where the car looks nice and runs well for 2 miles, but has loads of problems. I never get a mechanic to check the car out, because I a) think I can tell a good car from a bad car like a mechanic can, almost and b) I'm playing the odds and haven't had a lemon yet (5 cars in 35 years).
Is this a model that is hard to find? Why this car?
Look at the DMV webstite. Or better yet call them.
If they said that, don't let them change their minds. Although the car won't be of much use. I got caught driving my new car on my old plates, but he let me go because it was the day after the sale, but 10 days of driving with no registration is looking for trouble. STill, take the car.
Like I say, they borrowed their money from a bank five miles away. Didn't take no 10 days, took an hour or less. If I could have gotten a ride, I could have gotten the car at 11 in the morning.
How much money do they owe on the car?
If you are inclined to email me for some reason, remove NOPSAM :-)
Valley Girl wrote in news:1192160903.972678.148570 @y27g2000pre.googlegroups.com:
I guess it depends on the laws in your area.
I bought a car years ago where the seller admitted to me he still owed money on it. I went to our provincial government's Liens Office (no Internet back then) and got a printout of all the registered liens on the vehicle. There was only the one the seller told me about.
I then called the bank branch that had registered the lien and asked how much it would take to discharge the lien. The lady wouldn't tell me of course, so I just threw out "what if" numbers until she said "yes".
I then made out a check for that amount to the bank (NOT the SELLER), and gave that to the seller. We concluded the transaction and I later changed the ownership over. No problem.
It would possibly have been better if I had driven the check over to the bank myself to make sure they got it, but distance and time were factors.
Sure you can. Just go to wherever the title is being held (make an appointment, of course), hand them the cashier's check, and they will hand you the title.
I did exactly that when I paid off my very first new car back in 1995.
I wouldn't do it any other way than what I outlined above.
We encountered a situation not unlike that when buying a car for my daughter to take to college. The solution was to check the title document and confirm the loan and proposed payoff with the lender. A sales agreement was written and a cashiers check payable to the credit union for payment of the loan was given the seller. We took posession of the car. It all went smoothly. Given that loan-to-value is upside down you might want to close this deal at the lenders office. You hand the lender a cashiers check for the purchase price and the seller hands the lender a check for the shortfall and you get the title with proper endorsement.
If the lender owns the car, then why does the registration bills come to me? Why isn't the "owner" responsible for paying them? :)
Just to be nitpicky, the lender does NOT own the vehicle until/unless the buyer defaults on the loan. Until then, the borrower does, in fact, own the car. His name is printed on the title, even though it's sitting in a file folder in the lender's office.
How about this approach? THEY give YOU a certified check made payable to their lender, the keys to the car, the car, and a signed statement authorizing transfer of the car to you. You cash the certified check and wait a sufficient period of time for it to come back to you as forged or stolen if it is. (I think this is a minimum of 60 days, and 7 years is probably sufficient as long as no foreign banks are involved). YOU take the cash from their check, plus your check, to the lender. You get back a title (I think that's what is being called a "bill of sale").
Now, if these terms are acceptable to the sellers, they are probably not scammers, but they are fools, as YOU could be the scammer.
This sort of thing is done all the time with house sales using an escrow agent. I think you could use their lender as an intermediary. If you hand over the check, you walk out with ownership of the car. Settle for nothing less.
I thought a "bill of sale" was something created by the seller as documentation of the deal, laying out what was sold, price, date, terms of the deal, etc. It acts as a receipt for the buyer, and in the case of cars, it may be required by the state to determine the amount of sales tax due, a necessary part of transferring a title that the state will insist on. In the case of cars and houses, it doesn't do the transfer of the title or deed by itself.
snipped-for-privacy@burditt.org (Gordon Burditt) said in rec.autos.driving:
Precisely.
And that's exactly what this transaction needs: a TRUSTED THIRD PARTY who can hold all the goodies until all the various pieces of the deal come together while preventing either side from ripping the other off.
Surely there are people out there who will act as an escrow agent for transactions other than real estate?
When live in Winchester, Virginia and the vehicle was purchased in Vermont. The lienholder is a small credit union in Vermont. The sellers now live in West Virginia. For those who are unfamiliar, our area has a small city every 20-30 miles with cattle farms, horse farms, and orchards in-between. It is not "rural", but has a finite supply of used cars that are not being sold at some questionable mom & pop dealership.
When you do a Carfax check, make sure the price is in line with the NADA guide, and make sure that Consumer Reports likes (or at least does not trash) the vehicle you are looking at, plus inspect and drive the car yourself, the pool of acceptable cars in any given price range drops considerably. Even factoring in the high mileage for its age, this vehicle is priced well below blue book. It drives wonderfully with no drifting, no vibration at high speed, even braking, and no fluid leaks after idling and revving in one spot for several minutes. All power options work and the tires have even wear.
I spent a lot of time thinking about this and proposed the following change to the seller:
They get a cashiers check for the amount that they owe for the vehicle over what they are getting from us. We have our cashiers check. We contact the lender directly to make sure that they are ok with what we have planned (hypothetically, as they cannot disclose customer information to us). (The sellers are supposed to do the same.) We send our check directly to the lender stating that the owner will be sending a check of their own, that we are purchasing the vehicle, that the title should be sent to us, and that, if they do not receive, from the seller, a check with similar instructions within 5 days, then our check should be returned to us.
Assuming that the title arrives, we then meet with the seller to have the title signed and collect the vehicle and the signed Bill of Sale, which simply states the names of both parties, the selling price, the date, and the VIN number.
The sellers could refuse to sign the title once we meet with them but there is going to have to be some trust, somewhere. There are a lot of sleazebags out there, for sure, but we are being as cautious as we can without giving up on the vehicle entirely.
FWIW, the sellers would let us have possession of the vehicle now, but we feel that that would just be torture for our son to have a car sitting in the driveway that he cannot drive for a week.
I must add, finally, that just because someone needs the proceeds from a sale in order to pay off a loan and get clear title, it does not necessarily make them suspicious or deadbeats. Not everyone makes $80k a year.
I am truly grateful for all of the insightful responses. Your feedback helped me to formulate a plan, and also to put the reigns on my husband, who wonderfully assumes the best in everybody.
I will continue to watch for your comments as none of this will take place until Monday.
You surely know that this questionable deal is not your only option?
Shop AutoTrader, Craig's List, eBay, or whichever regional/national/online classified ad service you want. Find a car that looks good and in *unencumbered.*
Take a train or bus, get a ride from a friend, and go to where the car is. Inspect it, and, if it checks out, buy it, and drive it home.
Why would that Credit Union play along with such a Rube Goldbreg scheme? What's to stop some dimwitted clerk at then CU from cashing both checks and absent-mindedly mailing the title to the seller?
Amazing how you'll go to all this trouble to concoct this cockamamie scheme, but you won't buy a Greyhound bus ticket to go pick up a car with a clear title.
Yet another reason not to follow through with this silly scheme.
However, since you've clearly made up your mind and are determined to go through with it, I hope everything turns out well for you.
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