Buying Advice Liens

[BillySunday]

Farm equipment have no titles. When I find a used tractor or any farm equipment that I want to buy, how do I buy with the peace of mind it doesn't have a previous bank lien or any kind of lien? Even at auction how can I be sure it is free and clear of liens?

 

[mddorange]

Are you related to the infamous Preacher or did your folks think that it would be fun for you to have that name?

In most states, liens have to be registered but the hook is that they are registered in the state with the originating loan.

 

[BillySunday]

I don't like hooks! If I am paying $50,000 for a used tractor, how do I know someone didn't bring it here (with lien attached) from another state? I pay $50,000 then a bank shows up with a 1st superior lien. Makes me not want to buy a used tractor. I have trouble understanding why anyone would buy a used tractor if they like sleeping at night.

 

[mddorange]

Yes, that is the rub. You read about this happening all the time.

 

[prichard]

I wonder if you could ask where it was purchased then all that dealer how it was financed.

 

[My Gym]

There was a long thread discussing this problem previously. No you cannot be sure of a clear title even on new equipment. There are things you can do to help prevent problems. Always get a signed bill of sale stating that the equipment is being sold with clear title. If it is a private sale have it notarized. Check out the person or company selling the equipment. Make sure that he or the company has assets that you can go after if you take the sale to civil court. Do not be afraid of getting the criminal courts involved. Selling equipment that you do not have title to is a crime and at $50,000 it is a felony. If you are buying from someone you do not know, who has no assets, because it is a good deal. GOOD LUCK

 

[mcfarmall]

Most financial institutions can give you a "payoff letter" or some document stating that the loan has been paid in full. You could ask for that document when purchasing from a private seller but might be a bit more difficult to obtain if the machine was sold at auction.

 

[Slowpoke Slim]

No you cannot be sure of a clear title even on new equipment.

Wut?

Explain how brand new equipment, bought from a dealer, can have lien problems? I don't see how that's possible.

 

[My Gym]

From Other thread on this subject.

"in 2006 I bought a john deere tractor and loader from a local dealer.a few months rocked on and the dealer called wanting to pick up my tractor immediately for warranty service they said on the front axle.they came and got it the next day and kept it a couple days.i got it back and it was all cleaned up.came home a couple days later and a john deere investigator had been at my house and left a card and a note instructing me to call him.well apparently this dealer was selling tractors and not paying john deere for them.the dealer got wind that john deere was coming in to check his inventory,so he had to round up a few tractors to put back on his lot.a guy I work for said they also came and got his for a few days and brought it back all cleaned up.the investigator wouldn't tell me much about the dealer,my first response to him was I wrote a check for the tractor to the dealer and had all the proof of where I did.the dealer went out of business a little while later.the other local deere dealer got all his inventory and he had several brand new lawn mowers in crates that was several years old.i was sweating for a little while though when I seen that an investigator had been here."

If it is a large amount of money ALWAYS GET THE PAPERWORK. Most dealers have leins on their inventory. Selling equipment without clear title is criminal. Manufacturers will go after the dealer both civil and criminal. With no proof of purchase or unreasonable price you could be investigated or criminally charged. It is rare.

 

[TheMan419]

Even worse is the lien's are indexed by the name of the borrower not the serial number of the tractor.

So if I bought my tractor used from Bob and then sold it to you....

You search my name for liens and none come up. HOWEVER there is still a lien from when Bob financed it. So the bank could show up at your place with a superior lien that you really had no way of ever knowing about.