Posted: 2/17/2006 11:06:27 AM EDT
Selling an old car to an individual out of state. He's coming in to pick it up this weekend. What are the steps I need to go through (does it vary by state?) for this transaction?
I have the title in hand, and on the back it has section to fill out called "Assignment of Title." I assume I need to fill this portion out in advance, and get it notorized where indicated? Do I need to do this in the presense of the buyer?
Also, I assume I need some sort of bill of sale. If so, is there a blank bill of sale somewhere on the internet that I can use? I need something that shows the sale was made "as is, with no warranty."
Any other hints?
Almost forgot, are there any taxes that I need to worry about, or is the buyer responsible for that?
Get cash in hand before you sign over the title...that's number 1.
In Colorado you just fill in names and addresses then sign it.
You should just need to sign over the title. The buyer payes the sales taxes. A bill of sale isn't needed, but can be a good idea. Here's one I found that seems appropriate.
AGREEMENT TO SELL PERSONAL PROPERTY
Purchase and Sell Agreement made by and between __________________ of _______________________(Seller), and _______________________________ of _______________________(Buyer).
Whereas, for good consideration the parties mutually agree that:
1. Seller agrees to sell, and Buyer agrees to buy the following described property:
2. Buyer agrees to pay to Seller and Seller agrees to accept as total purchase price the sum of $__________, payable as follows:
$________deposit herewith paid
$________balance payable on delivery by cash
$________bank per certified check
3. Seller warrants it has good and legal title to said property, full authority to sell said property, and that said property shall be sold by warranty bill of sale free and clear of all liens, encumbrances, liabilities and adverse claims of every nature and description whatsoever.
4. Said property is sold in "AS IS" condition, Seller disclaiming any warranty of merchantability, fitness or working order or condition of the property except that it shall be sold in its present condition, reasonable wear and tear expected.
5. The parties agree to transfer title on________________, 20____, at the address of the Seller.
6. This agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives.
Signed this ______day of____________________, 20 ____.
As Eddiecrum said, Cash in hand. Then sign the title, though wait until you are in the presence of the notary (he/she will require that). You can fill in the buyer's name or not, as it suits you. For myself, I don't really care. (Though I would make a note of any license number of a car he came in). The bill of sale is fine only if he wants it: it's another item that doesn't matter. The only time bills of sale are really needed are for cars which have been purchased within the last six months - varies by state - and you are claiming you paid road tax on it, and want credit for that, as in moving to a new state. This doesn't apply in this case.
DO NOT FALL FOR THIS OLD TRICK!!!
Buyer sends you a cashier's check for $1,000 too much, and then says that "he can't go home to get the right amount from the bank so just deposit his check and then sign over the title and give him change..."
You find out 3 days later that the cashier's check was a forgery printed on an inkjet and now the "buyer" is gone with your used car and a clear title AND $1,000 of YOUR money for gas.
Here in alabama it's pretty easy. Fill out and sign the back of the title ( no notary needed) and it's done...A few points of course, if there are ANY strikeouts/corrections done on the back side of the title when you fill it out, a new title will be needed...ANY corrections at all. The title must be filled out in ink and once signed, the vehicle is HIS, whether or not money has changed hands.
I'd make sure to receive payment for the vehicle in CASH or a cashiers check. Buyers responsible for taxes. When I've sold cars I make out a bill of sale with the VIN of the vehicle, the true mileage and a brief description of the vehicle that I take directly off the title. I also put a 'sold as is, no warrenty' notice in bold letters. The buyer signes a copy that I keep and he gets a signed copy. Both of us put our drivers licenses on it. I also put the amount sold on the B-O-S.
Some states may have more strict guidelines.
It likely varies somewhat from state to state. Generally, one need only sign and deliver the title...at least in Illinois.
If you're going to use a contract, do it right and have an attorney do one for $50 or $125 tops.
The contract posted hits a number of highlights but misses some standard language I would include for a seller in IL such as:
1) Disclaimer of warranty of fitness for a particular purpose
2) Merger clause ...i.e. This agreement represents the entire agreement of the parties yada yada no oral representations... blah blah the parties expressly acknowledge that they have not relied on any statements or representations not contained in this agreement (or something similar)
3) Buyer has inspected the above described property and is satisfied as to its condition.
4) Buyer acknowledges that he has been advised that he is entitled to have this contract reviewed by legal counsel of his choosing and that he has declined (if he does decline or that he has had it reviewed by his atty if he wants)
5) Most importantly, the agreement should provide for reasonable attorney fees to be awarded to a party if they hire an attorney in connection with enforcing the contract if a party breaches the contract.... I would suggest setting a minimum figure like $200.00 and provide that the parties agree that such an amount is reasonable. At least in IL, simple breach of contract does not generally support an award of atty fees. You simply have to eat them. Often, they add up to be more than the amount in controversy.
Is all that necessary? Generally not but once again, why bother doing it if you don't do it right? You could just draw a contract in pencil on the back of a cocktail napkin that John agrees to sell Joe his 19XX Pontiac Whatsist for $$$$.$$ to be delivered by xx/xx/xxxx. I wouldn't but that's just me.
I think a lot of folks sign homegrown contracts that are horrendous just because they felt better having signed something. When things go south, inartfully drawn and simple contracts tend to be more of a liability. Unfortunately, a lot of lawyers draw sloppy contract for simple transactions too just because the parties don't want a 5 page contract in connection with selling a 1984 LeBaron for $200.00 and because they attorney figures all will go well, as do the parties. For the most part, that is true but there are exceptions and that is the reason to be thorough.
Two more tips:
1) Get cash/certified funds in full before signing or delivering the title. I would personally not do it any other way. Too easy to be burned.
2) If you decide to let him pay over a period of time, you can sign over and deliver the title but make sure you take a security interest in the vehicle. The process can be heavily state dependent. In IL, the lienholder generally charges the Buyer for the title transfer fee, takes the title to be processed with instructions that the creditor's lien be noted and the title returned to the creditor. Once PIF, the creditor signs a release of lien right on the title and delivers it.
3) He is coming there to pick up so I see this as less of an issue. BUT, what if you were shipping? Can he sue you in his state? Can you sue him in yours? Whose law controls? This is something else I would address by contract in connection with an interstate contract.
DISCLAIMER: the only portion of this post that should be taken as legal advice is this: Have a local lawyer draw up a cheap contract, at least if he screws up, you can go after his malpractice coverage.
The rest of this is just rambling