Buying a boat with a lien

[4x15mph]

Any advice on the process for buying a boat with a lien. I see some answers on other forums but I know a lot of people here has been through this.

The boat is from another state than where I live. The loan left is slightly less than the price I would be paying. I read I can make out a payment to his bank for the loan amount and then pay him the difference between the loan amount and his asking price. I am told this is part of a divorce so I want to be extra careful about the potential for the significant owner to be on the title.

Any advice on the process?

 

[Beachbummer]

Make sure both are on board with the sale!!! Specify your plans for transfer in writing in a separate clear working doc that everybody signs and specifies everyone's responsibility, and take possession of the boat with a Signed Bill of Sale upon providing the first check. You can both put it in the mail together, if you are distrusting, but if you are distrusting, don't do it. Trust but verify. Provide last check only after title in on hand. Be sure the last check is big enough to incentivize the seller to complete the transaction quickly and satisfactorily. If he has to put a little towards paying the loan because the number is too close, that's OK, make him do it.

It's still risky if one of the parties is not acting in good faith, but these protections will reasonably help you if it gets complicated. This is how I bought mine, but I lucked out because it turns out, like most people, he was just a decent guy selling a boat, and I wanted to buy one, and pay for it, so all the protections were not needed. He was also concerned as he was taking a check from someone he did not know and turning the boat over before it was fully paid for, but that's what I needed to feel comfortable, and he had to retain title until it was paid off anyway, so they agreed to my suggested plan, and we both felt somewhat protected.

 

[4x15mph]

I spoke with seller and we plan to go to his bank together to pay off the loan.

 

[Ratket]

What state is the boat currently Registered in and what state are you wanting to register it in?

I just went through this in Az and it was incredibly simple.

 

[Jgorm]

I spoke with seller and we plan to go to his bank together to pay off the loan.

That's what i did for my boat and rv.

 

[4x15mph]

What state is the boat currently Registered in and what state are you wanting to register it in?

I just went through this in Az and it was incredibly simple.

Buy in Maryland and register in Pennsylvania

 

[Ratket]

So check with how it works in both states..
here is my example.
In Arizona fish and game handles all boat registrations and they are “title-less” no title just the registration. So the Lien was actually only on the trailer. The registration had a “ Bill of sale” slot that the seller and I both filled out.. then I took it to the Dept of Fish and game, paid my 45$ and it was done.

Seller and I went to the bank and transferred the money from my account to his and he then paid off his loan with synchrony bank, now just waiting for the trailer title to come in” as that’s what the loan was pegged to”. He will have to have it notarized when he signs it over to me then he will mail it to me and then I take it to the D.O.T office and have it transferred to my name. It is always a little risky unless they have everything on hand, but like beachbummer said, just have lots of paper work where all party sign agreeing to the price and procedures and that’s the best you can do. Like I said originally check with ur state and tell them what you are going to be doing “ buying a out of state boat” and see what steps you need to do to register it. Every state is different so make sure you check what needs to happen to successfully register it in ur name before you purchase. Good luck!! Keep us posted.

 

[WestMIJet]

I went through this process, I bought in Indiana and registered in Michigan. It made me a little nervous. We paid the bank, did a singed bill of sale between all parties and the bank gave me a receipt for the check. The nerve racking part was with the title. The bank sent the title to the original owner, they signed off then sent it to me. As previously stated, cover your basis then decide if you trust the selling party.

 

[Cambo]

One thing to be aware of is what your states registration process is. The issue for NY is you need the lien release to register the boat and sometimes it takes a month or longer to get the lien release even though the bank says you will have it in a week . You need the registration in your name to get a boat ramp sticker so this process could limit your launch location and the insurance is not officially in effect until it’s registered , this is with a motor vehicle not positive about the boat.


NY state makes the process difficult for private sales they like all transactions to go through dealers so they can collect sales tax multiple times on a single vessel or vehicle .

 

[Ratket]

^ Yet another reason I LOVE Arizona!! Lol

 

[Beachbummer]

Yes, if the registration is expired now, have him renew so it's legal to use while the paperwork clears!!!

 

[4x15mph]

Registration is good thru November

 

[Dixie Highway]

@4x15mph Just noticed you live in Downingtown, I lived there for about a year. Between Dtown and Coatesville in Victoria’s Crossing subdivision.

 

[Gym]

Generally whenever there is a leinholder of real property they are the first payee. If this is being conveyed at the leinholders place of business they can arrange payment anyway they feel secure. With a real estate transaction the leinholder would receive total payment then cut a check to the seller for anything over the lein amount.

 

[BlkGS]

Personally, I would finance it for a short term even if you can pay cash. Your bank sends the money to their bank, and gets the title. They handle the risk, you get the boat. If you have the cash, pay it off after a month or two to ensure everything went through.

 

[Gym]

Personally, I would finance it for a short term even if you can pay cash. Your bank sends the money to their bank, and gets the title. They handle the risk, you get the boat. If you have the cash, pay it off after a month or two to ensure everything went through.

Actually @BlkGS has a good idea if you want to raise your credit rating. paying off a loan after a month or two gives you an instant boost to your credit rating. My wife also rounds up our bills to the nearest dollar amount. If an electric bill is $123.45 she pays $124 which gives us a $0.55 credit but more importantly shows the credit reporting agencies that we not only have no debt but actually a credit with most all of our creditors.

 

[Ratket]

I’m pretty sure it takes 6 months of payments before it reports on your credit, unless something changed.

But yes it is a good idea.

 

[Brad460]

Actually @BlkGS has a good idea if you want to raise your credit rating. paying off a loan after a month or two gives you an instant boost to your credit rating. My wife also rounds up our bills to the nearest dollar amount. If an electric bill is $123.45 she pays $124 which gives us a $0.55 credit but more importantly shows the credit reporting agencies that we not only have no debt but actually a credit with most all of our creditors.

In my experience paying off a loan will not raise your credit score, in fact I’ve seen mine drop slightly in some cases. I think it has to do with the bank reporting payments and the age of open accounts being effected.

 

[Gym]

In my experience paying off a loan will not raise your credit score, in fact I’ve seen mine drop slightly in some cases. I think it has to do with the bank reporting payments and the age of open accounts being effected.

I can assure you paying off a loan early and having a positive balance with your creditors does work. Also having good credit card habbits are a big plus. I have an 815 credit rating to prove it.

 

[Beachbummer]

I think the point was that taking out a loan for 2 months and paying it off in full does not have a great positive impact on your credit score vs. not having taken that same loan.