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Old 08-24-2005, 09:55 PM
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Default Buying a boat which has a lien on it

I am buying a boat which currently has a lien on it. I am making the check out to both the owner and the bank he has the loan with. Also the current owner is stating in the bill of sale he is to pay the loan off within two business days and also upon recieving the title he will mail it to me within two business days.

Does this sound legit? Do I need to worry? I'll obviously have the boat in my possession with the bill of sale. The person selling the boat seems very reputable. Is there anything else I should do to assure I don't get screwed or do you guys think this is sufficient?

Thanks,
Chris
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Old 08-24-2005, 10:02 PM
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mbb
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Default Re: Buying a boat which has a lien on it

The owner of the boat cannot sell you the boat because it doesnt belong to him. It belongs to the bank. This may not be an insurmountable difficulty if the boat does not require a title in your state. It it does, it is probably not possible.

He really needs to either pay it off first, or do it all at once at the bank. I have done the latter. Much more difficult if it is financed by an out of state company and not a local bank.

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Old 08-24-2005, 10:57 PM
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Default Re: Buying a boat which has a lien on it

First post I see, welcome aboard!

What State are you located in?

I'm a banker so here's what I recommend to my customers.

I'd go with him to the bank to pay it off. Have him call the bank and request they have the title there when you pay it off so you can take immediate possession. Depending on the bank and where they house their titles, it could take a coule days for a local branch to get a title. Take an official bank check or cash (don't use a personal check); otherwise, they probably will not release their lien on the spot.

Not sure what state it is title in, but how liens are perfected in each state can be different. Be sure to ask the banker to tell you if there are any UCC filings on the boat / motor / trailer. Some states title the trailer, others the boat and some even the motor.

In NC you can go to the secretary of state website and do a search on the owner's name to see if there are UCC filings. Check with your State, even ask a local banker, how they research UCC filings. Some States are easier than others to obtain information quickly.

Hope this helps, be glad to help any way I can if you need more info.

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Old 08-25-2005, 08:08 AM
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Default Re: Buying a boat which has a lien on it

After paying him, I believe you can file an additional lien on the boat subordinate to the first . That will give you "some" protection by giving notice to the world of your financial involvement.


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Old 08-25-2005, 08:40 AM
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Default Re: Buying a boat which has a lien on it

rdsrb5: has it right That is exactly what I did here in CT. We have no titles so I am not sure how the bank's lien was perfected but I the owner told me he had the loan so I went to the bank with him. I gave him two checks, one for the bank and the net to him.

I would also check with the M/V dep't in your state to see what is required in order to register the boat.

If you cannot go to the bank together then how about splitting the baby, i.e you give him the check for the payoff and take the boat. when he provides you witht he title you give him the balance due.

Good luck.
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Old 08-25-2005, 09:31 AM
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Default Re: Buying a boat which has a lien on it

instead of two check you can get one money order or cashiers check made out to both the financial institution and the buyer. The financial institution will apply what is needed to pay off the loan and the rest to the account. If paying with a check the financial institution would not release or sign off on the title until the check clears which may be 2 or 3 days.
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Old 08-25-2005, 06:13 PM
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Default Re: Buying a boat which has a lien on it

I agree with grabnmcbutt. That's because I'm the one selling Chris the boat. I suggested that he make the check out to me and the financial institution. Chris has the Bank name and loan account number so he can call and verify the amount owed on the loan if he wants or put it on the check. And in Virginia, you can sell a boat with a lien provided the lien holder is stipulated in the bill of sale. I also stipulated in the bill of sale that I will pay the loan off within two business days and mail the title upon receipt registered mail. This is the first boat I've sold and I couldn't figure out any other way to protect the both of us without using an escrow service. There's no guarantee an escrow service won't screw you over. Having the title at the bank wont work. I'm using Suntrust bank. God knows where the title is. They have administrative offices all over the place. Chris will probably be driving over six hours one way to check out the boat in a rural part of Virginia. No Suntrust locations anywhere near the place. If I screw him over, may I be keel hauled by every member of "thehulltruth" I think that's still legal in Virginia.

See you Sunday Chris.

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Old 08-25-2005, 06:20 PM
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Default Re: Buying a boat which has a lien on it

That sounds acceptable, especially since the seller is "Known". I have done as noted by rdsrb5, but getting titles can be very difficult if the bank has not already recieved the money ahead of time.
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Old 08-25-2005, 07:21 PM
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Default Re: Buying a boat which has a lien on it

I'll call Suntrust and see if they can send the titles (boat & trailer) to my local branch. Maybe this will expedite things.
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Old 08-25-2005, 07:43 PM
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Default Re: Buying a boat which has a lien on it

There seems to be a credibility issue. Chris only has 1 post here on THT. Mike is representing that God may have his titles.

So here's what you do: Chris - send me the $, just make the check payable to Cash. Mike - Send me the titles. I'll make sure that you guys don't take advantage of each other. Glad to be of service
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