Considering buying an out of state boat

jkust

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Hi all, looking at adding another boat to the fleet. The owner lives in one state and the boat is at his cabin in yet another state. While we would find a spot to meet and I would tow the boat back home, apparently he has a loan on it and so I'm worried about all the usual scams you hear about. I want to verify that the boat isn't stolen and that the bank will actually release the title and let me transfer it into my name in my own state. In other words that everything goes as it is supposed to. My thought is I would give the owner a cashiers check when I take the boat, but that something could go wrong or some other such scam could take place from there. Is it standard practice to call the bank that holds the lien to verify ownership? He tells me that once the bank releases the lien, he would send me the title which all told would take10 days at most. Anybody have any advice or experience here?

Thanks
 

robopath

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May 13, 2013
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I would ask your insurance agent, they may have special coverage for this. Either that or get advise/strategy from your bank....good luck.
 

thumpar

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I would go to the bank that carries the loan with him and get it all done right there.
 

GA_Boater

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I would go to the bank that carries the loan with him and get it all done right there.

+1 bazillion on this. When you walk out with the papers in hand, all you have to do is the legalizing for your state. In addition to a title for the boat and trailer, make sure you have separate bills of sale in case your state requires that in addition to the titles. They can be picky!
 

ihearth2o

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I bought a boat once that still had a loan on it. After I verified which lender was carrying the loan, I took one of the payment coupons, mailed in the payment and paid whatever balance was due to the owner. We wrote out bills of sale which indicated the seller's responsibilities in forwarding/signing over the title to me. I tugged the boat home that day. Couple weeks later, the seller emailed me and said the titles came in the mail and that he could meet up asap to complete the paper work. Met him that night. Signed everything over. Pretty clean transaction.

You do have to have a little bit of trust in the process though but for me, the seller was local, I met him at his home and had him call the lender on speaker phone to verify the balance and where to send in payment. He even let me talk to the lender to ask if they could send me the titles directly (answer was 'no').

My buddy sold his Harley the same way last summer.

It's doable to buy a boat with a loan still on it but depends on what you're comfortable with...
 

alldodge

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Agree with thumper and GA_boater, call the bank and tell them what you want to do. You don't need them to tell you if they can do it with the actual boat in question, only that if you brought in money type "A" will they release the lien. If their is an agreement, find out what is required to make a legal transfer of ownership

Edit: In places like KY and such, you can sell a boat which has an outboard on it, but there also needs to be a title for the outboard. Trailers in KY and other states do not require trailer titles. Make sure all items are listed on bill of sale
 
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cptrick3

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The bank that has the loan probably has both the boat and trailer titles. You really should go there pay off the boat and have the bank and previous owner sign over the titles to you.
 

RGrew176

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If nothing else I would make any cashiers check out to both the seller and the bank so the seller would have to go to the bank pay off the loan and any funds left over would go to the seller. I have done that a couple of times buying used cars that still had outstanding loan balances. Worked well both times. The bank got theirs and the seller got what was coming to him after the loan was paid off.
 

tpenfield

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There is a level of trust when waiting for clear title on a transaction such as this. As stated, it is best to verify the loan & liens and even pay the bank portion off directly and a separate check to the seller. Bill of sale to cover all agreements and understandings.

Marine escrow agents also perform this type of service, similar to real estate transactions.
 

ihearth2o

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Never thought of the payment coupon idea. ..that is s great idea.

Check with your insurance company and titling laws if you're considering this. Insurers may not cover items that are not titled under your name. In my case, I bought the boat just before the start of the season so I couldn't take her on her maiden voyage for another month or so anyways. So not a big deal for me. Only thing I had to worry about was trailering the boat home without tags but that's why I had the seller draw up a separate bill of sale for the trailer. I also had the seller leave the date on the bills of sale blank just in case we ran into delays with the title. Good luck.
 

ihearth2o

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The bank that has the loan probably has both the boat and trailer titles. You really should go there pay off the boat and have the bank and previous owner sign over the titles to you.

Great suggestion except if there is no local branch you'll have to find another way. In fact, when my buddy sold his Harley, they went to a local branch but the title was at a branch in another state.
 

oldjeep

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Wire transfers, Any seller with half a brain isn't going to accept a cashiers check.
 

jkust

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Wire transfers, Any seller with half a brain isn't going to accept a cashiers check.

I would tend to agree however the seller suggested the cashiers check to my surprise. I'm almost willing to pay more for something local to be honest at this point. Great insight on this from all...thank you. The boat is a PWC and they are far and few between with the parameters I'm looking for which is what made me consider something like this.
 

Silvertip

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Unless I can walk away from the point of sale with all titles signed (boat, motor, and trailer as applicable) I don't hand over a check. Relying on the seller to send you a title "in a few days, weeks, or worse) is obviously risky. The only way to work this is to deal with the bank to see what they need or will do to release the lien.

That part needs to be done with the seller at arms length and when the bank hands him the release and the tile(s), the seller signs it, has it notarized at the bank if necessary, and you hand over the money. The seller hands you the keys and you go home. As you work this deal, be absolutely certain the name on the titles is the same as those on the lien and the same as the name on the sellers drivers license. Obviously the bank wants the money first so two checks may be necessary. One to the bank to release the lien and one to the seller for the remainder of the sale price. It is the one to the seller that you need to be concerned about. Once the bank releases the titles, they are out of the loop and could care less what happens next. You are in control of what happens here. Do this deal as though you are buying from the worst person on the planet to protect yourself. Nobody else will.
 

jkust

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Thanks all...The logistics of what needs to be done make this happen the correct way are almost impossible from a distance and time perspective so thinking it won't make sense. I've been trying to buy one locally here and spend a bit more money and it is a reminder of how flakey Craigslist seller can be. So amazingly frustrating especially when there are just so few around.
 

Silvertip

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If this is a boat you really feel you like and want, then pursue it. All of the suggestions were made to acquaint you with the things that can go wrong. That doesn't mean they will. I've sold boats sight unseen and had it work flawlessly. But there was no lien and I provided pictures of everything the buyer wanted to see. Many close ups to show condition, features, any wear points, engine cover removed, etc., You simply need to protect yourself and not be drawn into an unsafe location. If a bank or credit union is involved, arrange the meeting at that location. Logistics are an issue but can usually be worked out. The key items though are still the lien, proof that the seller is the person whose name is on the title(s) and not some other person. You can even hire a marine surveyor to check the boat for you for a fee of course. Make sure you hire the surveyor and not one the seller suggests.
 

oldjeep

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Out of curiosity, what kind of PWC are you looking for that is hard to find locally?
 

jkust

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Out of curiosity, what kind of PWC are you looking for that is hard to find locally?


Looking for a Yamaha FX Sho Cruiser 2010ish or 11ish with a trailer and under 50 hours. I decided not to pursue the out of state one with the lien after I had him send me more pictures which showed a substantially more abused ski than the first set of pictures he sent me. I think the first set was taken when it was brand new and those ones are the ones he advertised it with. Excellent condition seems to mean that they hit every dock and obstacle they came across in the 30 hours they owned it. I'm having the classic situation where every seller is a flake, a time waster or just flat out lying to me.
 
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