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      02-12-2012, 09:12 PM   #1
mark896
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Question about buying from a private seller

This seems silly to ask but I'm not sure how it would work..

I'm considering buying from a private seller but I would be financing. I'd be placing about $25K down and financing the rest.

My question is, how does the title part work? I'm assuming the car's owner is financed as well, how the heck does the title transfer from his bank to mine? This sounds like the process would take awhile, has anybody done a transaction like this? What are the ins/outs and any advice you have for me. To top it off, I'd be traveling across country to make the transaction.

Mark
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      02-12-2012, 09:19 PM   #2
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Quote:
Originally Posted by mark896 View Post
This seems silly to ask but I'm not sure how it would work..

I'm considering buying from a private seller but I would be financing. I'd be placing about $25K down and financing the rest.

My question is, how does the title part work? I'm assuming the car's owner is financed as well, how the heck does the title transfer from his bank to mine? This sounds like the process would take awhile, has anybody done a transaction like this? What are the ins/outs and any advice you have for me. To top it off, I'd be traveling across country to make the transaction.

Mark
I am not an expert, but whomever you're financing with should handle all of the title transfer. I think it can be done rather quickly.
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      02-12-2012, 09:20 PM   #3
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When I did mine, I got the cash, paid off the car and I mailed the title to the buyer once the bank sent it to me. Unless the seller has it on hand, you will have to wait.
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      02-12-2012, 09:31 PM   #4
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You secure your piece of the financing from your bank..plus your down..paid to the seller..he turns around and pays off his bank holding the note and they release the title to him..he has to sign it turn around and send it to you..once you exchange cash you take position of the car..if he owns the car out right then you could get the title at the time of purchase (assuming he has it, which he should)

thas bout it..nothing complicated..
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      02-12-2012, 09:45 PM   #5
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Mark,

First, you need to find out if the seller financed his car and if he can pay out his debt and get the title. If he did finance you need to find out out how much he owns for the car.
If the guys financed his car - then your financial company should give you two checks - one in addition to your 25K to cover payment to the other guy bank, and another one - to cover the price difference which they either mail directly to the guy, or you can bring to him in person.
Another thing to consider if the seller financed his car - you need to get some paperwork from your financial company and bring it to the guy to get him to sign it. Also you can not drive the car until you get the title. And if the guy financed - you will not get the title during the next 2-3 weeks after the deal is done. Which probably means that you would need to make another trip after your financial company gets the title to actually pick up the car.
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      02-12-2012, 09:54 PM   #6
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Ok, sounds like I need to contact the seller to see what the title situation of the car is.. I would think that once money is exchanged, I wouldn't need the title immediately to drive the car away.. As long as the 2 banks agree on how the title will make it from point A to point B..
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      02-12-2012, 10:05 PM   #7
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Quote:
Originally Posted by radiognome View Post
Mark,

First, you need to find out if the seller financed his car and if he can pay out his debt and get the title. If he did finance you need to find out out how much he owns for the car.

He doesnt need to know this and any seller worth his sauce would not tell him..the selling price is inclusive of the note on the car.

If the guys financed his car - then your financial company should give you two checks - one in addition to your 25K to cover payment to the other guy bank, and another one - to cover the price difference which they either mail directly to the guy, or you can bring to him in person.

Another thing to consider if the seller financed his car - you need to get some paperwork from your financial company and bring it to the guy to get him to sign it.

I struggle to understand what this means.. if both are financing the car the respective banks will have to arrange transfer of the titles to each other..when the sellers bank is paid they will release the title to the OPs bank..OP has to find out what his financing company needs in order to cut him his check to the seller.

Also you can not drive the car until you get the title. And if the guy financed - you will not get the title during the next 2-3 weeks after the deal is done. Which probably means that you would need to make another trip after your financial company gets the title to actually pick up the car.

NO..once payment is made OP takes postion of the car (possesion is 9/10 of the law). If no title is availble he has to get a notarized bill of sale.
So much mis info here where to begin
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      02-12-2012, 11:08 PM   #8
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Your bank holds the title until you've paid it off. If the seller has not paid for the car your buying, his lien will still apply. So, you need to find out whether the current owner has a lien or not. No biggie either way but a lot less complicated if there is no lien.
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      02-13-2012, 04:43 AM   #9
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Surprised no mentioned to use an Escrow service. Good to use neutral 3rd party sometimes.
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      02-13-2012, 04:53 AM   #10
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Quote:
Originally Posted by mark896 View Post
Ok, sounds like I need to contact the seller to see what the title situation of the car is.. I would think that once money is exchanged, I wouldn't need the title immediately to drive the car away.. As long as the 2 banks agree on how the title will make it from point A to point B..
Contact your financing company and let them walk you through the process. My friend bought a car from Colorado (he lives in Texas). The credit union handled all of the title transfer. He arranged the PPI from someone in Colorado and had the car trailered to Texas.

If you decide to pick it up and drive back, the seller is probably going to want to keep the plates. When I drove my car back from Chicago, I had to go to local DMV and pick up a drive-away permit. I assume you'll need something similar. Again, the financing company can help you get the necessary tags.
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      02-13-2012, 07:08 AM   #11
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Definitely not going to ask him how much he owes on it; thanks guys, I'll have my bank talk me through it. Surely this has been done before.
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      02-13-2012, 08:21 AM   #12
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I've got more questions on this process.. I just spoke with my bank and unfortunately, the rep I spoke with was a COMPLETE idiot so I'm on my own until I get a hold of someone that knows more.

If I live in New York (military), and I buy the car in Arizona (for example), but I want to register the car in either Texas (my home state) or New York, how does the taxes work?? Once I register the car, they're going to want me to pay sales taxes in the state that I register it in right? I dont pay sales tax in Arizona, the place I purchased the car right? How the F does this work?

Now I see why people go to the stealership, this private seller shit is for the birds.
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      02-13-2012, 08:42 AM   #13
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Quote:
Originally Posted by tibra1 View Post
So much mis info here where to begin
>> He doesnt need to know this and any seller worth his sauce would not tell him..the selling price is inclusive of the note on the car.

I doubt that any financial company will give OP check for the rest of the amount if seller financed his car and did not pay it in full yet. Instead they will give OP some paperwork (4-5 pages) and wait until they get it back either from OP or from the seller directly. Until they get the papers no checks will be cut. Once they get all the information they will cut 2 checks - one for the seller's financial company, which they will send themselves, and another one for the seller for the rest of the amount, which they can mail themselves, or OP can deliver it if he is going to travel.

>> I struggle to understand what this means.. if both are financing the car the respective banks will have to arrange transfer of the titles to each other..when the sellers bank is paid they will release the title to the OPs bank..OP has to find out what his financing company needs in order to cut him his check to the seller.

As far as I remember the seller's financial company will not transfer title to OP financial company. They will mail the title to the seller, and then OP needs to get it from him, and bring it to DMV for the registration. After the car is registered, DMV will mail the title to OP financial company. At least it works this way in VA/DC area.

>> NO..once payment is made OP takes postion of the car (possesion is 9/10 of the law). If no title is availble he has to get a notarized bill of sale.

If the seller financed the car he will definitely take tags off once the car is sold. In some states he would need to do it no matter who was the car owner. OP could drive without tags, but since it's illegal he should be ready to be stopped by every police officer on the road. As other people mentioned, OP would need to get a temporary transit permit to be able to drive the car home without headache. Another option could be to promise seller to mail the plates back to him once the car is registered, but I guess he would not agree.
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      02-13-2012, 10:31 AM   #14
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Quote:
Originally Posted by mark896 View Post
I've got more questions on this process.. I just spoke with my bank and unfortunately, the rep I spoke with was a COMPLETE idiot so I'm on my own until I get a hold of someone that knows more.

If I live in New York (military), and I buy the car in Arizona (for example), but I want to register the car in either Texas (my home state) or New York, how does the taxes work?? Once I register the car, they're going to want me to pay sales taxes in the state that I register it in right? I dont pay sales tax in Arizona, the place I purchased the car right? How the F does this work?

Now I see why people go to the stealership, this private seller shit is for the birds.
I'm military too and recently bought a car that was in Pennsylvania while I'm here in Oklahoma with a home of record of Texas.

Best bet is to find somebody competent at your bank to walk you through the process, that's what I did (USAA is my bank).

You are correct about not paying sales tax for the state you bought it in, you will pay for whatever state you register the car in. I thought about registering in Texas also but I think I remember something about you have to have a physical address in the state you are registering in... Google Texas vehicle registration laws, it shouldn't be too hard to find the info for that.

I was nervous about the whole buying from a private party nonsense but it actually was really easy, especially if you've got a motivated seller that will get you or your bank the info you need at the drop of a dime, like I had.
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      02-13-2012, 10:41 AM   #15
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Quote:
Originally Posted by mark896 View Post
I've got more questions on this process.. I just spoke with my bank and unfortunately, the rep I spoke with was a COMPLETE idiot so I'm on my own until I get a hold of someone that knows more.

If I live in New York (military), and I buy the car in Arizona (for example), but I want to register the car in either Texas (my home state) or New York, how does the taxes work?? Once I register the car, they're going to want me to pay sales taxes in the state that I register it in right? I dont pay sales tax in Arizona, the place I purchased the car right? How the F does this work?

Now I see why people go to the stealership, this private seller shit is for the birds.
I purchased my car from Kansas City from a private seller; registered in Texas and paid Texas tax when I registered. He was financed and I was financed as well; I paid him cash plus a check from my bank and he paid off his loan and gave me a bill of sale along with title when I went to pick up the car (apparently MO lets you possess the title even if you have a loan against the car). He also sent me a copy of the lien release he received from his bank. When I registered in Texas, they took possession of the previous title and the lien release and sent the new title to my bank. Wasn't a ridiculously bad process at all.

PS I used PenFed for my loan and their customer service was pretty awesome. It took a while to get the loan actually processed, but when it came to questions and availability, I have no complaints.

Last edited by roddyc; 02-13-2012 at 10:46 AM..
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      02-13-2012, 10:49 AM   #16
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Originally Posted by roddyc View Post
I purchased my car from Kansas City from a private seller; registered in Texas and paid Texas tax when I registered. He was financed and I was financed as well; I paid him cash plus a check from my bank and he paid off his loan and gave me a bill of sale along with title when I went to pick up the car (apparently MO lets you possess the title even if you have a loan against the car). He also sent me a copy of the lien release he received from his bank. When I registered in Texas, they took possession of the previous title and the lien release and sent the new title to my bank. Wasn't a ridiculously bad process at all.
Same here in OK, (weird).

OP, not sure for your reason of wanting to register in Texas but you might want to check and calculate which state will charge you less sales tax, especially considering you're military, which could help you dodge some state fees if you're an out-of-state register. OK turned out to be less, which was another reason I chose not to register in TX.
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      02-13-2012, 11:28 AM   #17
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You keep your title in NY as well. I'd dO some research. Military has some exceptions. You may avoid paying any taxes at all. TX is good about that
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      02-13-2012, 11:45 AM   #18
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OP. Why not have a chat with your banker that will provide financing.

I've never taken over a financed car from a private deal. However, I would think the bank (your bank) would handle the entire affair since they will finance it. Your bank should pay the bank loan I would think and you provide that $25K certified cheque to the previous owner along with a Bill of Sale.

PS. Since this is a private sale I like to strongly recommend (unless you have already done it) have the car inspected at a BMW dealership, pay if you have to for the inspection (it might be $150- to $200-). While it is being inspected ask the BMW dealer what a extended warranty will cost you. By doing this you will accomplish 2 things A) The BMW dealership will make sure the car is properly inspected and B) It will give you a bargaining chip for the final sales price agreement.

You might save a few thousand on the final deal. So investing up front for the inspection is money in the bank for you.
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      02-13-2012, 01:11 PM   #19
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Quote:
Originally Posted by tibra1 View Post
I struggle to understand what this means.. if both are financing the car the respective banks will have to arrange transfer of the titles to each other..when the sellers bank is paid they will release the title to the OPs bank..OP has to find out what his financing company needs in order to cut him his check to the seller.
For a know-it-all, you sure don't know it all. He will need to bring some sort of paperwork to the seller to sign regardless of how the title situation is handled.

Quote:
Originally Posted by radiognome View Post
>> He doesnt need to know this and any seller worth his sauce would not tell him..the selling price is inclusive of the note on the car.

I doubt that any financial company will give OP check for the rest of the amount if seller financed his car and did not pay it in full yet. Instead they will give OP some paperwork (4-5 pages) and wait until they get it back either from OP or from the seller directly. Until they get the papers no checks will be cut. Once they get all the information they will cut 2 checks - one for the seller's financial company, which they will send themselves, and another one for the seller for the rest of the amount, which they can mail themselves, or OP can deliver it if he is going to travel.

>> I struggle to understand what this means.. if both are financing the car the respective banks will have to arrange transfer of the titles to each other..when the sellers bank is paid they will release the title to the OPs bank..OP has to find out what his financing company needs in order to cut him his check to the seller.

As far as I remember the seller's financial company will not transfer title to OP financial company. They will mail the title to the seller, and then OP needs to get it from him, and bring it to DMV for the registration. After the car is registered, DMV will mail the title to OP financial company. At least it works this way in VA/DC area.

>> NO..once payment is made OP takes postion of the car (possesion is 9/10 of the law). If no title is availble he has to get a notarized bill of sale.

If the seller financed the car he will definitely take tags off once the car is sold. In some states he would need to do it no matter who was the car owner. OP could drive without tags, but since it's illegal he should be ready to be stopped by every police officer on the road. As other people mentioned, OP would need to get a temporary transit permit to be able to drive the car home without headache. Another option could be to promise seller to mail the plates back to him once the car is registered, but I guess he would not agree.
Once, the car is sold, the plates are likely not valid anyway. At least until the OP is able to re-register the car in his name to make them valid again. That's how it works here in CA at lest. The plates go with the car and the remainder of the sticker and plates belong to the new owner once the transfer process is completed with the DMV.

Quote:
Originally Posted by mark896 View Post
I've got more questions on this process.. I just spoke with my bank and unfortunately, the rep I spoke with was a COMPLETE idiot so I'm on my own until I get a hold of someone that knows more.

If I live in New York (military), and I buy the car in Arizona (for example), but I want to register the car in either Texas (my home state) or New York, how does the taxes work?? Once I register the car, they're going to want me to pay sales taxes in the state that I register it in right? I dont pay sales tax in Arizona, the place I purchased the car right? How the F does this work?

Now I see why people go to the stealership, this private seller shit is for the birds.
Taxes will be paid to the state where the car is registered, not where it's purchased.

I just went through a very similar process a few months back, except that my seller had the title already. It still was a HUGE pain in the ass. In order for them to finance the car, the bank wanted the title in advance. However, the seller was understandably reluctant to sign over the title without full payment. Since I was putting down 50%, I gave that to him up front in exchange for the keys and the signed title. When the bank cut me a check for the other half (plus the sales tax), I brought him the remaining 50% and picked up the car. He lived only a few hours away but I ended up needing to make a few trips because there were forms that needed to be signed by both of us and notarized, the bank also needed the DMV paperwork signed and sent in ahead of time to transfer the registration, etc. It was a huge hassle.
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      02-13-2012, 01:38 PM   #20
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Originally Posted by M3PO View Post
For a know-it-all, you sure don't know it all. He will need to bring some sort of paperwork to the seller to sign regardless of how the title situation is handled.
Some "sort" of paper work ..thats brilliant ..I have bought and sold 56 cars to date.. so yeah I know a thing or 2..but not all!

Bill of sale is what I stated very clearly ..you dont need a bill of sale if the title is available b/c it can serve as a bill of sale when the seller and purchaser complete it and fill in the price.
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      02-13-2012, 02:41 PM   #21
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I'm military too and recently bought a car that was in Pennsylvania while I'm here in Oklahoma with a home of record of Texas.

Best bet is to find somebody competent at your bank to walk you through the process, that's what I did (USAA is my bank).

You are correct about not paying sales tax for the state you bought it in, you will pay for whatever state you register the car in. I thought about registering in Texas also but I think I remember something about you have to have a physical address in the state you are registering in... Google Texas vehicle registration laws, it shouldn't be too hard to find the info for that.

I was nervous about the whole buying from a private party nonsense but it actually was really easy, especially if you've got a motivated seller that will get you or your bank the info you need at the drop of a dime, like I had.
Believe it or not, I have USAA and I managed to get the ONE idiot that had no idea what she was talking about. I told her "if you don't know the answer, then tell me you don't know because I'm not traveling across the country and showing my ass on a deal because YOU didn't know what you were talking about". I'm going to call later on tonight when she's off shift so I don't get her again. She was awfully ignorant.

I think I've got the gist though. This will be a complicated process, no matter how it goes down. The 2 things that are going to be complicated are, tags to drive the thing to Texas, and taxes. I want the taxes to be rolled into the loan and I'm not sure if USAA will cut 2 different checks on the same loan. Especially on different days (it will take 2 days to get to Ft. Worth, where I'd be registering it).

I want to register it in Texas because it's moderately cheap and I just like to do it there. New York is outrageously expensive, plus my home-of-record is in Texas so I do have a physical address there (mother's).

It's hard to find the exact M3 I want but this one is about 97%. ZCP, carbon fiber roof, DCT, tech package.. If it was Space Gray it'd be too good to be true.

Maybe a stealership will come up with one before too long. I'm still waiting for my truck to sell before I travel across country for this car. Hope it's worth it.
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      02-13-2012, 02:48 PM   #22
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Good luck, man. Hope it works out for you!
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