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We have a travel trailer we are planning on selling later this year. A friend contacted us and wants to buy it. Their offering what we would have asked (we haven't listed it yet), which is (from what I can tell) a reasonable price. However, they would like to do a payment plan (~40% up front and then significant payments for the next few months). Their finances/employment are in good shape (from what we know). Selling it now would work great for us. Not getting all of the money right now is not an issue for us.

Generally, I am okay with this. Worst case scenario (they make none of the payments) is sucky, but is a hit we could take. We know that there are potential relationship killers when doing financial deals with friends. So we would go in having that conversation. The trailer is in good condition (we just took it to Zion Natl. Park for Thanksgiving) but is 15 years old, so stuff will break on it, just due to age. We'd make sure both sides are aware of this.

We would plan on, as part of the sale, writing up the payment plan. Any thoughts on what to put in there for failure to meet the terms or other conditions/notes? Do we just rely on small claims court if they don't pay? Aside from the potential relationship and financial issues, anything else you think we should consider?

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ntr91 (Jan. 24, 2017 @ 3:01p) |

May as well just cut to the chase, and sell it to them for whatever they are offering as the down payment.   This way th... (more)

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kmsandrbs said:   Their finances/employment are in good shape

I wouldn't do it. For that statement to be true, they'd be getting the money from the bank, and not asking for a payment plan.

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Make sure both parties sign a bill of sale indicating AS-IS.
Make sure they transfer title and have it properly registered.  You should be a listed lien holder on the title.
If they get insurance (probably not on a trailer this old, but maybe), get proof that you are named as a loss payee.

Your biggest concern would be an uninsured loss if they get in a wreck or it catches fire or something like that.  They stop paying, and you have no collateral to take back.  Know that the worst case scenario is that you don't get paid.

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How much are we talking here? $1,500 and $15,000 would certainly deserve different agreements...especially between neighbors.

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Don't sht where you eat

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rufflesinc said:   Don't sht where you eat
  Yeah, that's some sound, hard-core advice alright...just not applicable here.

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I would not have a problem with the payment plan, but they would not take possession till the last payment was made.

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Chyvan said:   
kmsandrbs said:   Their finances/employment are in good shape

I wouldn't do it. For that statement to be true, they'd be getting the money from the bank, and not asking for a payment plan.

 Why pay interest for a used RV loan (or whatever loan type a travel trailer falls under), when you can get interest-free seller financing?   They could be assuming they're doing their friend a favor by paying full asking price, rather than factoring financing costs into what they're willing to pay.

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Not a lawyer, but you should consider talking to one.
I believe you're considering something called a "chattel loan", and you can get a UCC lien against it.
They can find mold issues, or destroy it, and most banks will refuse to finance these transactions.
If they hit someone, you could get caught up in the lawsuit.
As part of the agreement, ask them to list you as an additional insured..

If they want to get out of it later, it'll likely be easy with the right lawyer.

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Glitch99 said:   
Chyvan said:   
kmsandrbs said:   Their finances/employment are in good shape

I wouldn't do it. For that statement to be true, they'd be getting the money from the bank, and not asking for a payment plan.

 Why pay interest for a used RV loan (or whatever loan type a travel trailer falls under), when you can get interest-free seller financing?   They could be assuming they're doing their friend a favor by paying full asking price, rather than factoring financing costs into what they're willing to pay.

If they can live in it, Dodd-Frank can apply, and very, very few will finance it.
Not that I'm denying OP isn't getting a good deal selling; these things can depreciate like cars.

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Find some auto loan documents that work for your state. Be sure you're listed as a lien holder on the title, so you can repossess it if they default. I sold a car like that once and think I got the docs from Nolo.com.

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kmsandrbs said:   The trailer is in good condition (we just took it to Zion Natl. Park for Thanksgiving) but is 15 years old, so stuff will break on it, just due to age. 

From eBay, these are in the $3,000 to $5,000 range. What would they be buying it for?

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I'm wondering, after reading some of the above, if this can qualify more as a contract than a loan. For example, if we signed over the title and everything and did not list ourselves as lien holders, and just had a document that agreed they were paying over time. I know this would make it more difficult for us to do something like repossess, but I guess I would think that it also be better at reducing our liability.

We're talking a matter of a few thousand, so as stated, worst case scenario for financial loss of the trailer is manageable (this is really the only reason I'm willing to do it). And they are paying our asking price, which is great for us (not having to list/show/etc.). I'm now a little more worried about liability as Thomas talks about above, but I think that would be less if we are not listed as a lien holder and if they hold title free and clear. They are pretty willing to do whatever, paperwork wise, though

Also, for Chyvan, I get where you're coming from. 1) probably compared to a good part of FWF, they are not in "good" financial position if it's not easy for them to float a few thousand for a few months (of course, it's also possible that they could, but that doing it this way is just a little easier for them). 2) I think they are in good shape, not great shape; they are not crisis proof, but from a variety of factors, I'd see this as very low-risk.

Thanks, all.

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Seriously ip, just sell it for cash and save yourself the hassle

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Trailer (569.68kB)
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Just in case someone asks for pics ...

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rufflesinc said:   Seriously ip, just sell it for cash and save yourself the hassle
  The thing is, from our experience when buying it (used), selling these (even when friends aren't involved) is a hassle. This working actually will save us that hassle. It's part of the reason (probably the main one) why I'm willing to consider it.

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kmsandrbs said:   I'm now a little more worried about liability as Thomas talks about above, but I think that would be less if we are not listed as a lien holder and if they hold title free and clear. 
  What does being a lien holder have to do with liability? That's like saying the bank that holds your home mortgage would be liable if someone slips and falls in your house.

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atikovi said:   
kmsandrbs said:   The trailer is in good condition (we just took it to Zion Natl. Park for Thanksgiving) but is 15 years old, so stuff will break on it, just due to age. 

From eBay, these are in the $3,000 to $5,000 range. What would they be buying it for?

   A little more than that. The price we were asking seemed reasonable based on local Craigslist, but probably at the top end of what we could get if we listed it.

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atikovi said:   
kmsandrbs said:   I'm now a little more worried about liability as Thomas talks about above, but I think that would be less if we are not listed as a lien holder and if they hold title free and clear. 
  What does being a lien holder have to do with liability? That's like saying the bank that holds your home mortgage would be liable if someone slips and falls in your house.

  Good point. I think I mis-interpreted what Thomas wrote above about being involved in a lawsuit.

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woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  This.

Or how valuable is the friendship? If they don't make payments would it end the friendship?

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woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

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I don't know how some of you get out of bed in the morning. It's a big bad scary world out there. Better to stay under the covers all day so you don't have to face any risk.

You are getting full asking price without any hassles. Good down payment. Write up a contract that details the payment plan and go from there. Zero need for a lawyer.

There's a 90% chance every thing goes great. You become better friends with the other family and go on camping trips with them.

7.5% chance they cannot make payments but sell the camper to pay you off.

2.5% - they screw you.

I'd take my chances.

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Exactly, this is a pretty straight-forward deal where everyone can benefit. There's risk, of course, but most of it can be mitigated by being smart.

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wilesmt said:   I don't know how some of you get out of bed in the morning. It's a big bad scary world out there. Better to stay under the covers all day so you don't have to face any risk....

Stop spying on me!!!


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atikovi said:   
woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

  I have done it several times with used cars, it allows the buyer to purchase before someone else does, and motivates them to pay off the debt.
Why would I turn over the item without proper payment?

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woowoo2 said:   
atikovi said:   
woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

  I have done it several times with used cars, it allows the buyer to purchase before someone else does, and motivates them to pay off the debt.
Why would I turn over the item without proper payment?

  Watch a few episodes of Judge Judy. If they made payments without having the car and decided they didn't want it anymore, you'll have to return the money they have already paid into it.

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How long is this payment plan?  Can you hold the title in the meantime or would that open up insurance issues?

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woowoo2 said:   atikovi said:   
woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

  I have done it several times with used cars, it allows the buyer to purchase before someone else does, and motivates them to pay off the debt.
Why would I turn over the item without proper payment?


No sane person would agree to it. They are paying on an item they don't have possession of. It's considered your asset so if you face a lawsuit/bankruptcy the car goes pooof in front of their eyes for no reason they can control. Maybe desperate ppl would agree to it, but you are drastically shrinking your buyer pool by inserting a weird payment plan into a SIMPLE transaction.

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wilesmt said:   
woowoo2 said:   
atikovi said:   
woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

  I have done it several times with used cars, it allows the buyer to purchase before someone else does, and motivates them to pay off the debt.
Why would I turn over the item without proper payment?


No sane person would agree to it.
 

  Tell that to all the families that put merchandise on lay a way each Christmas....

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wilesmt said:   I don't know how some of you get out of bed in the morning. It's a big bad scary world out there. Better to stay under the covers all day so you don't have to face any risk.

You are getting full asking price without any hassles. Good down payment. Write up a contract that details the payment plan and go from there. Zero need for a lawyer.

There's a 90% chance every thing goes great. You become better friends with the other family and go on camping trips with them.

7.5% chance they cannot make payments but sell the camper to pay you off.

2.5% - they screw you.

I'd take my chances.

 
 You should loan the money to the OP's friend so they can remain friends.  If they cannot borrow the money to get the RV then they shouldn't be buying. 

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Chyvan said:   
kmsandrbs said:   Their finances/employment are in good shape
I wouldn't do it. For that statement to be true, they'd be getting the money from the bank, and not asking for a payment plan.

  
Not necessarily.
I just paid for a vehicle with cash which depleted the majority of my easily liquid cash. In an emergency, I could easily get 6 months cash overnight but until then I will just leave that money in investments. I have no other debt and live well below my means, and my employment is extremely secure. By nearly any measure, my finances are in great shape. 

However if I was looking to buy something small like this, i could easily see the advantage of this arrangement for me. I pay a little extra up front, but avoid the PITA of getting a loan. Sure I could wait a few months and buy it with cash, but maybe I've seen how this friend takes care of things and I like the piece of mind from that.

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Loans to friends and family can turn into a gift in a heartbeat. Be sure you are OK with that

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woowoo2 said:   
wilesmt said:   
woowoo2 said:   
atikovi said:   
woowoo2 said:   I would not have a problem with the payment plan, but they would not take possession till the last payment was made.
  That's absurd. Why would they make payments if they couldn't start using it? They might as well put the payment money in a savings account and buy it when they have all the money, or more likely, find a better to deal to buy with all the saved up cash.

  I have done it several times with used cars, it allows the buyer to purchase before someone else does, and motivates them to pay off the debt.
Why would I turn over the item without proper payment?


No sane person would agree to it.

  Tell that to all the families that put merchandise on lay a way each Christmas....

  Big differance between brand new merchandise held at a name brand store vs. a used vehicle from John Doe.

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My biggest concern would be the RV needing a big repair and them deciding to stiff you on the balance. It's one thing to say "hey stuff might break!". The reality is 15-20 years is the life span of an EPDM roof. Best case, you can recoat the roof and it's $500 or so in materials (plus labor) and get another 5 years out of it. Worse case a new EPDM roof is $4,000-$5,000.

It doesn't take much to break on an RV and eat up $1,000 and 15 years plenty will start breaking. I know, I have a 16 year old RV!

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If they can't or aren't willing to get a personal loan to pay you for the RV that should raise a big red flag. Just be prepared when they can't or aren't willing to keep current on payments when a repair bill or some other unexpected expense hits them.

You might think you're getting rid of the RV at a good price, but more likely you're just getting rid of the RV.

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If the offer is reasonable, why sell to friends with the hassle of waiting for the money vs. simply selling it to a third party who can come up with the full amount however they prefer? I'd put it up for sale and see what offers I get that don't come with a payment plan.

If taking friend's offer, it'd have to be significantly higher considering the risks, and as long as payment plan goes on, I'd be first lien on it and require them to keep it insured as part of the sale contract.

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With a vehicle I'd take less money & sell to a stranger.

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This reminds me of the judge Judy show

Skipping 31 Messages...
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ntr91 said:   
wtfu said:   Hey! for those who missed the second part. It turns out OP's neighbor is also on FW check this out.

"Please give me some advice on buying my neighbor's trailer

My neighbor owns a trailer that he doesn't really use. He is asking for a slightly higher than market price because it's in a good condition.

Here is the tricky part. I can't really afford the trailer. I can sell some stuffs from around the house and make about 40% what he is asking for.

I really like the trailer. Should I just pay him what I have, and "promise" him monthly payment, and then make a run for it?

With that trailer, I could travel very very far away, and never return to this town. What could go wrong with that?

As you could tell, I don't really care about my credit, because I like to own stuff that I can't afford. I love my credit card!

If I can score this "deal", that 60% saving will help me pay for the maintenance, fees, and fuels. Do you think it is a good deal?

I even convinced my neighbor, this trailer will help me "save money" because of my " temporary job relocation". I should thank him for paying for my permanent relocation!"

  Some future trolling advice.  If you're going to try to create a troll post and then reply in the original thread, use an alt-id so that people don't realize it's you.

 Yeah I guess I could do a better job next time. I thought using the same ID is obvious enough for most people to realize it's a troll. 

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