What is Common Practice for Selling w/ Laon Balance?

[meegwell]

Obviously I could payoff the loan (cash or another loan) or have the buyer pay the loan and me…seems there should be an easier way?

Assume there is positive equity in the boat and there is no dealer (Yamaha) near by.

May sell this summer just starting due diligence.

Thanks.

 

[biffdotorg]

Come to an agreement on price, based on a good water trial. Once complete have the two financial institutions talk. One transfers to the other, settles the lien on the loan and transfers the title to the other financial institution, as they will probably hold the title.

If they want to pay with Certified funds or cash, walk it into the financial institution to settle the lien. Deposit the equity.

That's the way I did it when I bought my 242ls. My loan was approved, funds were held until I drove for a water trial. I messaged my bank to transfer the funds. The old owners bank sent the title to my bank until I paid off my loan. The old owner let me take it home within hours as his bank confirmed by the time we hit the shore and loaded the boat on the trailer.

 

[I_squared_r]

Easiest is you pay the loan beforehand and have a clean title ready. If that's not possible then you can tell the buyer theres a lien and show him the loan pay off amount from your bank. You with him to his bank with a bill of sale which you sign when you receive the 2 cashiers checks (1 for your bank and 1 for your positive equity) and you both can go to deliver the check to the lienholder. Sucks for the buyer because it could take a little time to get a clean title and register it. If he's getting a loan then you can go with him when they deliver the check so you can verify it's legitimate, but same deal. Except the check would be addressed to the bank where you got the loan and the bank will deposit the remaining funds into your account. Best thing to do is contact your lienholder and ask them the exact process.

 

[Cambo]

Pay it off get the title sell the boat. Anyone that has been down this path and was lied to by the banks will not want to buy your boat. I have done this called the previous owners bank they said 2 weeks to get the title it turned into 4 months. In my location you need the boat to be registered to launch at the boat ramp. No title no registration the two previous posters may have purchased at a lower than market value price due to the owner not having a "clean title".

 

[Ronnie]

I purchased my boat from a seller who still owed on it. Here is how it went down, very similar to what @biffdotorg stated: that is, seller and I agreed to a price. My lender sent out a person to verify the boat exists and that the seller was legitimate. Afterwards, my lender cut two checks. One for the seller’s bank for the balance of his loan and another for the seller for the difference between what he owed and the total sales price we agreed on. After the sea trial I turned over the equity check to the seller and my bank paid off the sellers loan. I drove the boat home and Title was mailed to me within two weeks. I financed through Bank of America and the seller and I were both in CA. If I declined to buy I just needed to return the check to BofA and they would have cancelled the transaction at little or no cost to me. Honestly other than having to pay the full sales tax amount I was happy with the process and all involved. That is, I let the banks do all the paperwork (other than the loan application) and was confident they, especially BofA l, would do it correctly to protect their collateral.

 

[Cambo]

Why eliminate potential purchasers by not having a "clean title". If you have the funds pay it off you will also save some intrest that your paying to your bank and get the highest selling price.

 

[biffdotorg]

Why eliminate potential purchasers by not having a "clean title". If you have the funds pay it off you will also save some intrest that your paying to your bank and get the highest selling price.

Because "clean title" has nothing to do with if it has a lien on it. That has to do with an accident that would show up in it's history. And that revolves around clean or salvage, it would have had to have been totalled.

In this day and age, a boat with a loan on it is more common than paid of free and clear. This is the new norm, and not a deterant at all. If folks are legit and are working with normal financial institutions, it's a daily routine to transfer funds and have them pay off loans to free up a title.

let's be real, as I stated before, the bank will prefer it, as they have control of the title, as they will want possession of it anyway if there is another loan. Most folks don't have $30K-$70K just laying around to buy toys.

 

[Cambo]

Clean title is no accidents no lien in my opinion, we are giving him info to make a decision to pay it off or not. It's good for him to hear that he could easily loose from the pool of cash buyers that don't like to hand there money to the banks Especially now with how high the rates are. 2018 for sale by owner that has no lien is a nice clean transaction he said he has the funds. When the title is clean with no lien I know I'm not dealing with somone that could be in a financial mess and not have the funds to maintain and properly store the boat. This is no where near a 70k deal my guess is 20k is owed or less. One of my first questions is who has the title you or the bank. It's great to hear that a few have had clean transactions but I haven't and it was the bank that lied about the 2 week timing , I know others that have had similar issues waiting months for a title.

 

[Ronnie]

I think it’s important to distinguish clean title from free and clear title they are both industry defined terms.

if the vehicle has not been totaled / determined to cost more to repair than the vehicle is worth it has a clean title.

if the owner does not owe any money on the vehicle / no body or company can claim a security/collateral interest in it the owner has title free and clean of any encumbrances.

Unless I knew and was comfortable with the history of a used boat (e.g. by analogy a used porche could have a salvaged title because of hail damage, I would buy that but not one that was salvaged due to flooding) or I was only buying it for parts I would not buy a boat with a salvaged title.

IMHO it’s easier to sell and buy a boat that does seller does not owe money on to a lender but only because there are only two parties involved the buyer and the seller.

On the other hand, buying or selling a financed boat shifts the burden of getting the paperwork/transferring title correctly to the lenders, especially if the buyer is financing. If the buyer is not financing the purchase it’s in the buyers best interest to work with the sellers lender as well as the seller concurrently to avoid a situation where the seller pockets all the money instead of paying off his or her balance, in which case now the buyer has a mess to deal with because the sellers lender will not release its lien on the boat until the loan balance is paid to them. Additionally if the buyer or buyers lender works with the sellers lender the pay off amount will be accurate to the penny as will its validity range.

as a buyer I would care if I had to write two checks instead of one but would like the peace of mind knowing that a bank will be making sure title transfers correctly assuming I finance the purchase.