Questions About Private Sale Transactions

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  • tidestertidester Member Posts: 10,059
    This may help: kiawah, "Questions About Private Sale Transactions" #136, 25 Jan 2008 2:22 pm

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  • kiawahkiawah Member Posts: 3,666
    You can't sell the car, since you don't own the car outright....the bank or financing institution owns a piece of the car.

    This becomes more difficult when you are trying to sell a car that has a lien. You basically have two options. You can:
    a.) Borrow money from a personal source (dear ole dad), pay off the loan, get the clean title, sell the vehicle using the regular transaction process, pay back d.o.d. out of the proceeds. or,
    b.) You have to orchestrate a three way 'closing', between you (part owner), your bank ( where you have the loan, the other part owner), and the buyer. You'll undoubtedly end up faxing and notarizing paperwork back and forth, and this becomes a real pain. The bank will also have to give you a "payoff amount", as of a specific date....which is the amount of the check that they will get to close out the loan. At 'closing' there will be two checks cut (or deposits into your respective accounts), one will go to the bank who originated the loan, and the remainder will go to you. If you call the bank, their loan department can help you with this, and give you some guidance as to how they handle it in your geography/state.

    It is much easier to do this when the buyer is a dealership, carmax, or some other company which does this all the time and have administrators that orchestrate all of this for you. They also are willing to absorb a little of the risk as a purchaser, and have a good sense when all the paperwork appears proper. Just put yourself in a buyers shoes....no way would you be willing to turn over a check to someone, without immediately getting all of the supporting paperwork that shows you have purchased the vehicle and will ultimately be able to get a title issued in your name from the DMV.

    Dear ole dad, really makes life simpler if at all possible....and hopefully you are close to the end of the loan where the payoff amount isn't that much to begin with.
  • thejax2006thejax2006 Member Posts: 3
    Thanks for the info! Very helpful!
  • clarencehollowclarencehollow Member Posts: 60
    It's simple: Car sold as is! No warranty or guarantees!

    So if someone gets killed, it's not your fault. That's one of the reason buying from a dealer has it's advantages. If something is wrong buying from a private buyer, there is NO recourse period. With a dealer, it's a completely different story.
  • parvizparviz Member Posts: 484
    "... disclaimer - I'm not a lawyer but I do watch Judge Judy twice a day..."

    LOL, just reading some old posts with topics of interest!
  • novice1144novice1144 Member Posts: 2
    Help. Tell me if the process I am going through is on the up and up. My father died a month ago. The title is now in my Mom's name for a 2000 Nissan Sentra. I want to purchase this car.

    The loan for the asking price has been approved. Here is the problem. The credit union who approved the loan originally wanted my Mom and brother (business manager so to speak) to come directly to the office to sign the title, etc. My Mom has trouble driving and this is a hardship. I was going to have my Mom sign the title w/notary and send it so it could be presented to the cu. They are saying the notary will not sign the title without any evidence of price/purchase. The sellers (Mom/brother) say the title cannot be signed until they have the loan check in hand for the notary to see.

    Is this common practice for a loan agency to not hand the check before they have the signed title. Is there something else other than the check that would satisfy the notary as proof of loan/price, etc. What seemed to be a simple process has turned into a nightmare and I am ready to either go with another lender or seller.
  • cccompsoncccompson Member Posts: 2,388
    Common practice? Well, let's just say it's not uncommon - it's how the lender guarantees its security interest in the vehicle and prevents you from running off with their money.

    Unless your state has an unusual requirement, I don't understand the argument that the notary requires evidence of the purchase price - that's not the notary's job.

    This is really very simple - either the sellers take the title to the lender or the lender comes out to the sellers to conclude matters.
  • steine13steine13 Member Posts: 2,834
    The notary is required in many states because they want to make sure the price is correct. Use tax is based on the purchase price in most places.
    There is no use tax if you're buying from your mom.
    With my credit union at least, they don't care if you're buying the car of already own it. Why not have your mom sign & send the title to you, you register the car, get a title in your own name, then head to the CU with THAT?
    I'd be very leery of owing money on a 9-year-old anything. It'll probably go a good while longer, but if it conks out in 3 weeks, which is entirely possible, you'll be making payments on something useless. AND you'll be required to keep paying for insurance and registration, whether it moves or not.

    Good luck, -Mathias
  • cccompsoncccompson Member Posts: 2,388
    It's not the notary's job to independently verify the purchase price of a vehicle - the notary merely takes the acknowledgement or affirmation of the seller.

    Perhaps in Michigan there is no use tax on a family sale. The same is not true in all other states.

    Your idea of mom signing the car over and then the OP using the new title to secure financing is a good one. The tenor of the post, however, somewhat suggested the lack of trust necessary to do it that way.
  • steine13steine13 Member Posts: 2,834
    Perhaps in Michigan there is no use tax on a family sale. The same is not true in all other states.

    That surprises me; I think it's true for "most" states. But I only really know thisabout MI and MO.

    -Mathias
  • novice1144novice1144 Member Posts: 2
    Thanks for your input. This is a family situation and my brother especially is making this more difficult. I'm leaning on buying another vehicle from another source and not involve family. This makes things much less complicated. I'm in Ohio
  • cccompsoncccompson Member Posts: 2,388
    There's no official break on use (sales) tax in Ohio if the sale happens involves family members. Here the seller declares the price on title and tax is calculated on that figure.

    As one might imagine, there is much resulting fraud in private sale transactions. It's gotten so bad that the the state tax department will sometimes send a letter out later to the seller seeking to verify the sale amount (because many titles are assigned "blank" as to price). Don't know how much cooperation they get - they don't even include a stamp on the return envelope!
  • steine13steine13 Member Posts: 2,834
    It's gotten so bad that the the state tax department will sometimes send a letter out later to the seller seeking to verify the sale amount

    Here in MI the secretary of state people will sometimes decide on their own that something's fishy and assess a higher price. The law says that use tax is calculated on the "sale price or retail price, whichever is higher."

    This made the newspaper some years back when they decided some lady was scamming them with the price of a used RV. It got to be a bit of a mess because the lady apparently was a pillar of the community and hadn't lied at all, and the "retail price" was taken straight out of one of the more idiotic price guides.

    I'm all for this law, but in my version, if they don't like the price, they should assess the car... and then give the buyer the option of turning the car over to the state in exchange for, say, 90% of the assessed value. I'd be all over that ;->

    -Mathias
  • dtownfbdtownfb Member Posts: 2,918
    This happened to me the purchase of my current vehicle. I live in PA. I guess they did not believe the price of the car and sent the letter to verify. I simply put the price of the car on the letter and sent a copy of the signed and notarized bill of sale.

    The state is looking to get their piece of the pie.
  • 2doorpost2doorpost Member Posts: 74
    Here's one that just happened-

    My kid had just picked up a screaming deal on Craigslist-(2004 Cavalier-3300 bucks) his old car (a 2000 Cavalier) was worse for the wear of 8 years of so-so maintenance and typical Midwest rust on top and underneath. After trying to get decent money for the car- decided to dump it back on Craigs for 800.
    1/2 later phone is ringing off the hook- knew I priced it too low but wanted it gone.
    Young kid and boss show up 2 hours later- drive the car - like it- grind 25 bucks off of me and agree to take it a few days later. Kid is "desperate for the car" No wheels.
    Day comes and kid doesn't have ride because he's watching his little baby- we drop car off-
    Few hours later - car is listed
    on Craigslist for 1500.00 more.

    Moral of the story. Be happy its out of my life and feel sorry for whoever paid the 2 grand for it. They were screwed.
    And don't take to much stock in what a buyer tells you.
  • qbrozenqbrozen Member Posts: 29,702
    Be happy its out of my life and feel sorry for whoever paid the 2 grand for it.

    Well, nobody said they actually got what they were asking for it.
    But, yeah, the probably made a few bucks if they had patience.

    '21 Wrangler 4xE, '07 ML63, '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '14 Town&Country Limited. 55-car history and counting!

  • 2doorpost2doorpost Member Posts: 74
    With me it was a matter of having too many cars in the yard- plus the fact that knowing the car needed so many repairs (which was told to the buyer) that 800-1000 was a fair price (without getting sued in the end)
  • qbrozenqbrozen Member Posts: 29,702
    I completely understand. And I would have done the same thing. At least YOU can sleep soundly at night. The person who flipped it is the one that needs to deal with the consequences.

    '21 Wrangler 4xE, '07 ML63, '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '14 Town&Country Limited. 55-car history and counting!

  • jipsterjipster Louisville, KentuckyMember Posts: 6,068
    without getting sued in the end

    You told the buyer the needed repairs. You wouldn't have gotten sued.

    Even if you hadn't told of needed repairs, old cars are sold "as is".

    I try to sell my cars at a price high enough to bring top dollar, and low enough to generate enough calls to have it sold within a week or two.
    2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    Not always jip. Anyone can sue you for any reason they like. I was sued once on a used car that I had sold two years prior!! Sure, the case was thrown out but I had to hire an attorney nonetheless. Buyer claimed it was in a flood. FORTUNATELY, he had the car checked out by a 3rd party prior to purchase, and this weakened his case considerably.

    If you "misrepresent" the car, even if you advertise it AS IS, there are circumstances where you could be sued. For instance, if there's a VIN # issue (even if you didn't know about it), or if you said the car only had two owners but later the records show 12 owners, (and believed it) or if there's provable fraud, blah blah.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350
    Years ago in So. Calif, a friend of a friend sold a very nice Oldsmobile that was probably five years old. It had been well taken car of but it had something like 120,000 miles. The price wass very attractive because of the miles and it sold quickly. The seller gave him all of the maintenance records and told him that as far as he knew the car was sound. He also reminded the new buyer that it did have a lot of miles.

    Three months later( I think) the transmission went bad and the seller ended up in Small Claims Court.

    The miserable judge made him pay for half the cost of a rebuild!
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    We all think scribbling "AS IS" over everything exonerates us from all legal assaults, but here are two cases where it did not.
  • jipsterjipster Louisville, KentuckyMember Posts: 6,068
    You'll always have your freak lawsuits (ala McDonalds hot coffee) and bonehead judges, but 99% of the time a car sold "as is" is the responsibility of the buyer, should any future problems arise. Of course, as you noted, selling a car with bad brakes, with a repair estimate from "Brake World" in the glove compartment, is a lawsuit the seller will not win.
    2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    yeah I guess but the McDonald's lawsuit was successful for the person who sued. Point is, don't think AS IS excuses you from being careful about what you say and what you do. It's much better to shut up and say as little as possible, or keep in vague----"she's a beauty. Runs like a top!" But if you say "rebuilt engine" when you just put on a cylinder head----watch out!
  • oldfarmer50oldfarmer50 Member Posts: 18,713
    Occasionally on Craigslist I see ads for cars with the heading "For Parts Only, Bad Title". I wonder how you get a "bad title". Does this mean the car is stolen?

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    Not sure what that means...probably means no title or just a Bill of Sale or maybe an old title with some strange signatures on it. (people nobody knows).

    If the car is not worth too much, it's really best to throw the old title away if it's messed up or crossed out or some such, and just get a valid Bill of Sale from the person you bought it from.

    But if the car has real value, DMV might ask you to post bond, which is a pain.
  • cccompsoncccompson Member Posts: 2,388
    Or it could mean that a vehicle has a salvage title.

    The important thing is that the seller is conveying that such a vehicle is only suitable for parting out.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    True, true but that's an odd way to phrase it...a salvage title isn't a "bad" title, it's a perfectly legal document.
  • cccompsoncccompson Member Posts: 2,388
    Not that I necessarily disagree but I see ads from time to time that tout a "good title." Presumably, such a phrase means that it is not a salvage (or "rebuilt") title.
  • qbrozenqbrozen Member Posts: 29,702
    kind of getting off track ... I think ... but this brings up a bit of a pet peeve of mine.

    When I see someone stating "clean title" or "clean carfax," it makes me think they are hiding something. If it has had no accidents, I'd say "no accidents." If it has had an accident that doesn't show up on carfax, that's when I'd say (if I were dishonest) "clean carfax." I'm not disclosing the accident, but I'm not telling a lie, either.

    '21 Wrangler 4xE, '07 ML63, '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '14 Town&Country Limited. 55-car history and counting!

  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    CARFAX means little to me, since I know that a car could have had 3 or 4 accidents and they won't ever show up on CARFAX.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350
    That's true and the smallest parking lot ding can show up as an "ACCIDENT REPORTED!!"
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    CARFAX might be good to spot a salvage title sometimes. It's better than nothing but it's far from a guarantee of anything.
  • oldfarmer50oldfarmer50 Member Posts: 18,713
    If a potential buyer gives you a deposit to hold a car until Wednesday and as of Saturday has not shown up is it fair to sell the car to someone else?

    If the understanding was that the deposit was non-refundable, what would you do if the first buyer showed up later looking for the car?

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • steine13steine13 Member Posts: 2,834
    "If a potential buyer gives you a deposit to hold a car until Wednesday and as of Saturday has not shown up is it fair to sell the car to someone else? "

    Yes. It'd be nice on your part to call or email and offer one last chance, but there's a reason it's called a "deadline."

    "If the understanding was that the deposit was non-refundable, what would you do if the first buyer showed up later looking for the car?"

    Depends. If I got the same price from the next buyer, I'd refund the money; if I got $200 less, I'd refund the deposit - $200.

    You provided a service: You kept the car of the market until at least Wednesday, and you have now way of knowing what that action cost you.

    -Mathias
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    You've taken the car off the market on behalf of the person who gave you the deposit. In these economic times, you'd be darn near crazy to let a real buyer with real money slip away.

    As for the deposit itself, I'd just sell the car to someone else, if someone is ready to buy it, and send him his money back--unless you had to re-advertise the car right now, and have no buyer, and in that case the ad money should come out of the deposit.
  • kyfdxkyfdx Moderator Posts: 197,852
    Don't keep the deposit.. It won't be worth the hassle.. Life is too short for that kind of grief..

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  • aak1aak1 Member Posts: 13
    I'm in CA.

    I sell my car, we meet at his bank and he gets us a "cashier's check" infront of us and we do the signing. (title).

    How do I know that the check is really good? I.e. we do the deal on Friday and on Monday he puts a stop payment on it?

    My bank may then tell me weeks after that it hasn't cleared? What's the safest way to do it? Cash from the teller would be the safeway way, but then it's dangerous to travel with all of that cash to my bank. (plus the buyer knows I have 15K in cash on me....).
  • aak1aak1 Member Posts: 13
    How do you orchestrate a sale when the lender is Honda Finance and they don't have physical location?

    In the past, when I paid off Honda Finance it took 2+ weeks to get the clean title to me.

    I heard a dealership will do it for you for a fee?
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    Whoa....what am I missing here? You and he go to HIS bank and he gives the teller cash and she gives him a cashier's check? That's kinda....er....misguided behavior....

    Go to his bank with him and have him write a check to you and then you cash it, or have him write it out to cash, and he gets cash and gives it to you. Then you fork over the title, signed

    You only need a cashier's check when the two parties are not together at the bank.

    It's either cash deal or you take HIS cashier's check to his bank or Branch Office and verify that it's good.

    It's very hard, darn near impossible for a bank to refuse to pay a cashier's check, since it's already been paid for, UNLESS it is a counterfeit check or unless they made an error in issuing it.

    But if you SEE him buy it, there's no question about cashing it.

    So once it's verified as real, you're pretty safe.
  • qbrozenqbrozen Member Posts: 29,702
    If you are that worried, why not have him meet you at YOUR bank with cash in hand?

    '21 Wrangler 4xE, '07 ML63, '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '14 Town&Country Limited. 55-car history and counting!

  • 2kids3cats2kids3cats Member Posts: 10
    I'm new here and I hope this is the proper place to put this. If not sorry.

    Would I consider this a private sale or dealer when looking up the values at kbb or edmund? A search of his phone number on google comes up with 2 cars in March and a search of the paper shows 2 cars including one I'm interested in looking at. He doesn't have a lot according to him. So it seems he's just operating out of his house.

    I think he wants more than a dealer would want now. He also wasn't sure of the model car. He told me it was a LS and when I've looked it up the Pontiac Grand AM the models are GT and SE. He says GT only comes in 2 door. So he isn't too knowledgeable about the car.

    Here's the ad: 2000 Pontiac Grand Am AT, AC, CD, 4 dr, V-6. Red w/gray int. 34K act. $5500

    Also, I asked him about getting it checked out by a mechanic. He said "fine, if you want to waste your money. You won't find anything wrong. It only has 34,000 miles". This raises a red flag with me. I'll get a carfax report if I like it when I see it tomorrow.

    Any other hints. Sorry so long.
  • tidestertidester Member Posts: 10,059
    This raises a red flag with me.

    Same here. I would look elsewhere. :)

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  • imidazol97imidazol97 Crossroads of America I70 & I75 Member Posts: 25,924
    Our state requires a lot on a license for a dealer. There's a reason for that and I assume it's to make sure it's a business if there were problems later. An actual business would be easier to find to collect against.

    I'd run the other way. He has no license (does he have a dealer plate on the vehicle?)? If he's an individual you have little if any recourse in the event of a problem.

    The last red flag should be when he uses the threat of your being stupid by wanting a mechanic to look at the vehicle, "Fine, if you want to waste your money." That's like the realtors saying when someone wants to give a low offer to them for the seller, "We don't want to insult them with a low offer." Insult? It's my money so I'll insult whomever I wish with my dollar value of my offer.

    You might call the state department that handles dealer licensing. You can have them check for the number of private sales per year he's allowed to perform if he's not a dealer. I believe Ohio has a limit of 5.

    Some dealers give fake locations for their business lot or use the location of an existing lot.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    It should be valued as a private party sale and he's about $1,000 too high already. The SE only comes in 2 dr.

    Taking the car to a mechanic is NEVER a waste of money. I would take cars to be checked over even if they had only 10,000 miles on them--like rental cars bought at auction, etc.

    Basically the car either speaks for itself or fails to please--a Pontiac is a Pontiac no matter who is selling it. He can misrepresent it, but he can't hide what it is, in other words. (presuming you do your due diligence).

    Given that the low miles only adds maybe $500--$800 to the value, for a total of perhaps $4500, and given that this is a fairly common car to find, I see no reason why you have to fuss over this one if something about it doesn't feel right to you.
  • 2kids3cats2kids3cats Member Posts: 10
    Well, I went to see the car today. It's very clean looking. However, I could tell it had been painted. He said it had a "rebuilt" title. I'm in Indiana BTW. He claims to have pictures of what the damage was before and it was supposedly only a little bit.

    I pointed out that he was asking more than 1,000 over KBB for the car if it had a good title. He said he didn't take much stock in KBB numbers. He then tried to make me feel guilty that he wouldn't be getting any profit if he took less. Tried to tell me I'd pay 15,000 or more for a car with similar miles. Then tried telling me my car would be dying soon. It's a ford taurus SE with 119,400 miles, but I've had it 7 years and changed the oil every 3,000 miles and kept up with other maintenance.

    We ended up leaving without trying the car. He says he sells one car a week.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaMember Posts: 64,482
    Oh a salvage title. Then I will revise my estimate of value to $3000. Fine, let some fool buy it and lose half his money the minute he takes title.

    The seller might try to explain to you why if you do a search for 2000 Pontiac Grand Ams on Autotrader you get a nationwide average price of $4,300.
  • lemmerlemmer Member Posts: 2,699
    I'd personally much rather have your Taurus than his car.
  • aeggroupaeggroup Member Posts: 131
    Hello.
    May somebody help me ? I live in NY and found a car in Florida from private owner.
    I like the car and ready to buy it, but how I can drive it from Florida to NY without plates ? Do I have to fly back to NY, get plates and come back for a car or there is a way to get plates, or something temporary, in Florida ?

    Thanks for advice.
  • dtownfbdtownfb Member Posts: 2,918
    this must be a very special car that you are willing to travel 1200 miles to buy it. What make and model car is it?

    I imagine you can a temporary registration so you can drive it to NY and then register it there.
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