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Discussion Starter · #1 ·
My car is paid off so I have the title and lien release in hand. The buyer for my car is in Seattle, WA (i'm in NY) and he is getting a loan to pay for it. His bank called me and is telling me I will have to mail the title, not just a copy of it, to the bank in order for his loan to be finalized. He is going to come here in 2 weeks to pick up the car and drive it home.

Is this standard bank practice in some states?

I've sold cars before but never to anyone out of state with a bank I've never heard of, so I'm a little skeptical when it comes to mailing the title. I guess as long as I have the money in my account before I give him the keys that's fine.

Thanks in advance.
 

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That does sound odd but not completely unbelievable. The bank issuing the loan wants to hold the title before releasing funds but I’d be leery that after you send them the title something else could change the financing and it could take you a while to receive the title back. Maybe there is a third party the bank would trust to collect the title and pay you the funds at the same time. I’m guessing you’ve confirmed this is a legit bank.
 

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I have bought a lot of cars and sold a lot of cars out of state. I have had loans and I have sold to people with loans. Never once did I have to mail the title ahead before they buyer closed on the loan. I have had to send a copy of front and back but thats it. DO NOT mail him a title until the money has cleared.

If you think about it realistically it doesnt make sense. If you send the title they will have to send it back to you for you to sign it and then mail it back to the bank. If you dont have the money do not send a signed title.

Having money in your account wont mean much if you send a signed title to what you think is a "bank". A signed title means you have given him ownership of the car. He can come get the car and you will have no rights to it because you handed the title. Now I dont know if they have asked you to sign it or not but under no circumstances should you send a signed title without having money in your bank.

Any questions please email me [email protected] I'll help you as much as I can to make this go smoothly.
 

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Do you know someone at your own bank? I'd ask them to clarify whether or not this is a standard practice. Especially if they're a smaller bank or credit union, they might be willing to provide some form of title or money escrow or proxy to allow the title and money to change hands locally and at the same time.

It doesn't sound particularly shady to me provided you confirm the address you're sending the title to belongs to a legitimate bank, and the money goes to you before the title goes to them. Make sure you confirm with them exactly what needs to get written on your title and bill of sale (if required) - the loan officer at my credit union forgot to get a signature in the right place on my bill of sale, and it turned my whole car buying experience a much bigger hassle than it needed to be.
 

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Discussion Starter · #5 ·
Well that's the thing, from what it sounds like they want the title before they even finalize the loan. I sent his bank a copy of the title and the lien release but they said they will need the actual title.

I have asked my banker this same question and am awaiting a response.

I have verified that it is an actual bank, but the whole thing seems a little....sketchy.
 

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Well that's the thing, from what it sounds like they want the title before they even finalize the loan. I sent his bank a copy of the title and the lien release but they said they will need the actual title.

I have asked my banker this same question and am awaiting a response.

I have verified that it is an actual bank, but the whole thing seems a little....sketchy.
Don't ask your banker. Ask your lawyer.
 

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No need. Don't give the title to anyone until you've got the money. If this buyer can't do that, they aren't the buyer for this car.

+1

Check your state's DMV website (or equivalent) and there should be a section on the process to sell the car. Even check washington's on how to buy, and show him the info


Sent from AutoGuide.com Free App
 

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No need. Don't give the title to anyone until you've got the money. If this buyer can't do that, they aren't the buyer for this car.
Agreed. A copy of the title should be more than enough for the bank.
 

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A bit unusual but -
I've bought (and sold) many vehicles and the way it was (usually) handled is the buyer sends a wire transfer of the funds to my account or sometimes I have then send a check. In either case I return a the UNSIGNED Title in a overnight envelope along with a "Power or Attorney" that I sign and have Notarized and return with the Title. The POA says I give the Bank authority to do all necessary to transfer Title. The reason the Title is unsigned is that if it somehow falls into the wrong hands it (the Title) cannot be transferred.

When Buying I usually just Wire Transfer the funds to the sellers account and ask that the Title (either signed or with a Power or Attorney) be overnighted to me.

It sounds like the Bank is not used to dealing with vehicle sales from private sellers/buyers. In a commercial transaction the dealers bookkeeper will show up with all the papers and the $$ will be transferred to the dealers account as part of the processing of the transaction - i.e. title will be available at the same time the funds are transferred. In this private transaction the $$ will not be transferred to you but to the buyer who has then to transfer them to you - I recommend a wire transfer to your account.

Herb

PS: I also always require or furnish a Signed, Notarized, Bill of Sale be included in the Title Transfer
 

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Discussion Starter · #12 ·
Thanks for all the info everyone. He is using Industrial Credit Union.

Everyone I've talked to has told me not to send the title until I have the funds, which makes complete sense. If this is how the bank needs to process his loan then I will not do business with them, unless they let us set up an escrow account.
 

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I sort of went through something similar when I bought my Elise a few years ago...

in my situation i was buying a car that was paid for with no lien... so i was just looking to finance a portion of it (& paying the remainder of it with $ i had saved)

my own bank wanted the title in there hands prior to cutting a check (& at the time the private seller & myself were not familiar if that was normal practice) so we had agreed if we went that route that i would send a down payment of sorts to the private seller & he would send the title to my bank directly.

however in the end I ended up financing through PENFED where they only requested a scanned copy of the title & intent to sell form (they also had the lowest rate of all the options I checked into)

iirc i ended up sending a small amount to the seller initially for good faith (once i we felt comfortable with our dialog) & the remaining amount via cashiers check when i was ready to take delivery of the car
 

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tell them to call Penfed and finance it there. I do all my cars through them, they have the best rates and are very easy to work with.
 

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he can get a personal loan from his bank and an very high rate, pay you, get the car and title, and re-finance it into a car loan.

my GF did this with a motorcycle.
 

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If I remember when I bought mine we had a scanned copy via email for the banks records until the purchase was complete and the real one was provided
 

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I would agree with what people above me have said... all the bank needs for the loan is the VIN. Then they require you to give them the title within 30 or 60 days or something. Otherwise the owner wouldn't be able to license the car...

Don't sign the title and send it anywhere until you have money.
 

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His bank should except the "Bill of Sale" or "intent to sell" signed by both parties in order to cut payment for the car. His banks should also provide him time to get the title once payment has been cut.
 
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