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Old 03-26-2012, 09:41 PM   #1
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Made An Offer

Well last night we made an offer on a 2003 Monaco Diplomat 40 PBDD. The owner accepted our offer but there are complications. It turns out he is "upsidedown" or "underwater", he owes more than the coach is worth. He is going to contact the lien holder and try to work something out so we're not sure how this will end up. Obviously we won't pay without a free and clear title. Any of you folks have experience, good or bad, with this type situtation, any advice, precautions.
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Old 03-26-2012, 09:56 PM   #2
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I would talk to the lender directly. Anything I did on it would be laid out in writing in contractual form with a guaranteed accepted payoff.
These can get sticky if the seller can't cover the diff
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Old 03-26-2012, 10:00 PM   #3
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If you are taking a loan, you can arrange the purchase with a letter of credit. This simply states that the lien holder will get the check for the vehicle upon receipt of a free and clear title.

If you are paying cash, you should finance it like that anyway, then pay it off once your bank gets clear title.
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Old 03-27-2012, 10:32 AM   #4
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I use to deal with this sort of thing all the time when I was a claims adjuster for State Farm insurance. People would take out 5 or 6 year loans, small or no down payment, and when their car was totalled in an accident they would, of course, owe more than it was worth. Your insurance policy will pay the retail value of the car, regardless of the amount of the outstanding loan (unless you have gap insurance). 99% of the time a simple call to the lien holder would get a lien release sent to me. The conversation would go something like this... "you can maintain your lien on a pile of rubble, or you can get a guaranteed payment for the majority, immeadiately" (we could not issue payment until the status of the lien was resolved). Your case is a bit different, but I'd still call the lien holder..."You can get the majority of you money immeadiately, in a lump sum, or you can hope your struggling customer can and will continue to make payments on the property he's no longer using".

In either case, the original owner is still legally bound to pay the balance to the leinholder. I was never involved in that end so I have no idea what arrangements were agreed to.

You are absolutely right, do NOT give anyone any money until you have a lien clear title in hand.

Good luck!
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Old 03-27-2012, 10:50 AM   #5
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If he would give you the information on the lien holder so you could talk with them then I guess I would procede to see what might happen. If not or if the lien holder doesn't want to discuss it I would just not waste anymore time and start looking again. There are plenty of coaches available out there.
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Old 03-27-2012, 11:57 AM   #6
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When I bought my 02 Diplomat, the seller was upside down. I talked to Bank Of America directly after he authorized it by calling them. I got his payoff and they agreed to send the title to me directly. He and I went together to the post office and put our checks in the envelope and together, we mailed it to Bank Of America. There was not an office close, or we would have gone to the branch. Worked out perfect.

Now, it the seller does not have the ability to write the check to cover his part, that is different, and not what I was involved in. He wrote a $7,000+ check to get out.
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Old 03-27-2012, 12:06 PM   #7
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I bought one that seller had to take out $30.000 loan to get title clear ,did it all at same bank and had no problems.
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Old 03-27-2012, 05:52 PM   #8
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It's a very common thing, especially these days. Often the lender will agree to a "short sale" and agree to release the title when he gets your check (which should be made payable to owner and lender. However, you, the owner and the lender should agree to this in advance and in writing. Then you get the title and the balance is between the ex-owner and the lender. If the lender won't agree to release the title upon receipt of your check, then hang on to your money until the owner and the lender get it sorted out.
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Old 03-27-2012, 06:27 PM   #9
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I agree, you need to speak directly to the lender about the sale. You might get the owner to call in while you are there and both of you can speak to the lender.

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Old 03-27-2012, 07:21 PM   #10
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Key message of all of these posts, and to be clear, no to anyone, until the process is sorted out. Not even earnest money up front.

Sounds like a Short Sale from the way you wrote your post. These can work well, or they can go nowhere real fast.

Repeating the same input again:
-Talk directly with the lean holder
-If they OK the short sale (or, if it is the owners responsibility to write that check to make the loan paid off) - then go in an do the transaction in person.
-No cashiers check, without pink slip and lean release, period.

These can be worth it, as you must have liked the coach or you would have never made the offer. Just be sure to look out for yourselves in this situation. I have seen a local seller, try to 'Short Sale' the same Travel Supreme multiple times in a 14 month period. (I know, as I made an offer on this Travel Supreme). When she wanted me to write a 'earnest money' check to her to hold it, a non refundable $5K - I started to smell a bad situation... Sure enough, it was - and I was glad to have not got involved on that coach. Saying that as a reference, and by the way - this person made a local news story for what she was doing... Having burned 4 people that they knew of... But, many honest people are upside down, and looking for away forward - so just keep your eyes open.

Best of luck, hope this becomes your rig of fun!
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Old 03-29-2012, 07:40 PM   #11
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The coach we just bought was the same way. He owed the bank $9000 more than we paid for the coach. We met at the bank, I gave them a bank check for the purchase price and he put the balance on a credit card. We now have the title. Good luck!
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Old 03-29-2012, 11:17 PM   #12
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When I bought our motor home 30 months ago the seller had to pay the bank more than I paid for the motor home to clear his loan. We waited until he did that before we paid for the coach.
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Old 03-30-2012, 06:11 AM   #13
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I doubt the lender will agree to a "short sale" where they don't recieve the full amount of payoff. As others have said you and the seller need to get togather with the lender, and make sure when your $$$$ changes hands you will recieve clear title. If you plan on financing the 2 lenders will get it all worked out just make sure your lender knows the total sale price you are offering.
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