I’ve been practicing law in Pittsburgh now for over 25 years. And I’ve purchased my two barracudas and three other vehicles off of eBay. Four of the purchases went smoothly and the one barracuda required filing suit here in Pittsburgh to "persuade" the seller to complete the deal. As with all legal matters, you cannot have too much documentation when buying a vehicle from any on-line site. This is especially true if the vehicle is in another state.
The first thing you must do is make sure you want the vehicle and can pay for it. If both those conditions are certain, then my approach has been to win the auction or reach an agreed price with the seller. Once that is done, I draft a simple purchase contract including the description of the vehicle with VIN along with all payment terms and any special terms like help in loading, extra parts, etc. I then email (or mail) that contract to the seller and ask him to sign it and return it to me. Once I have the signed agreement, I then send the seller a deposit - usually $500.00. This payment secures the enforceability of the contract and also minimizes my "at risk" money. the purchase agreement outlines all the essential sale terms and also includes a provision that the seller must take the car title to a local notary where he will sign as seller along with a separate memorandum of sale document that states that he is selling the car to me (description and VIN) for the noted payment terms and that he will keep the car safe until it is shipped and that the car (and any parts, etc.) listed in the sale will be shipped exactly in the same condition as these were at the time of sale. This separate memorandum is also signed and notarized. I then have the seller send me copies of those documents and once received; I then send a check or wire the balance of purchase funds for the vehicle. This process protects the seller because he retains the original title and vehicle. I’m protected because having these documents in hand is all the evidence I need to file suit if the seller refuses to complete the sale or sends me a vehicle that is damaged or missing parts that should have remained on the vehicle.
All the sellers I’ve dealt with had no problem with my requests because they were anxious to sell the vehicles. In the case of my one barracuda, the young seller in Portland, Oregon apparently got a higher offer for my car after he had signed the noted documents. It was too late at that point for him to cancel the sale. For that reason, it is critical that you get something in writing from the seller immediately reflecting the sale agreement.
My deposit check is always a personal check so I have a copy of the cashed check from my bank with the seller's signature on the back. I tell the seller that it is fine for him to wait until the check clears his bank before he sends me the signed documents I’ve described.
In some states that require titles for all vehicles (like Pennsylvania) the department of vehicle registration can raise questions about titles signed at different times by the buyer and seller or if the face of the title raises other questions. Pennsylvania WILL NOT process a title that includes a simple signature of the seller that is NOT notarized. NEVER, NEVER have a seller just sign a title and send it to you without being notarized. You are asking for major registration problems and delays if you do this no matter what state you live in. when I have sent all of the out-of-state vehicle titles for the five vehicles I’ve purchased to the Pennsylvania department of transportation (PENDOT) for a new title, I have included the original copy of the memorandum of sale executed by the seller in front of the notary showing the VIN of the vehicles and all these titles were processed without problem or delay by PENDOT. As I said, when it comes to buying out-of-state vehicles and getting them titled in your name, you CANNOT have too much documentation.
As to "flipping" a car before the sale is completed - that is like doing an "option to buy" with another buyer. However, nothing about that procedure should affect or change the original sale. They are separate issues. The buyer in that example is putting himself at risk because if he doesn't pay for the car he doesn't get it and if he has accepted deposit money from another buyer, he will have to give that money back to that person. There is also the possibility that the vehicle will suffer some damage during the first sale and transport, which would, or course, affect the second buyer.
If you are selling a car, draft good sale documents with simple, exact and complete terms with provisions for protecting payments. Address price, payment terms, title issues, pick-up or delivery conditions and anything else unique to the transaction. If you are buying a car, follow the exact same procedures. In everything you do act as if you will have to go to court. DOCUMENT EVERYTHING! As I learned in law school, "if you cannot prove it, it DIDN'T happen."
