Originally Posted by KMP44
I don't think this has anything to do with the OP's question. She is selling at a loss, so there is no income - not that would come in to play here anyway. Selling property isn't income unless maybe there is a capital gain involved.
I think the question is can she get payment from a buyer and pay it directly to the bank to release the lien and get the buyer a clean title (assuming she pays any difference between the sale price and the payoff).
To the OP: Sorry to hear about your situation. If the buyer is financing the purchase I would think this could be worked out. Probably could be worked out in a cash deal too, but I have no knowledge of how that would work. Somebody here will chime in with more specific knowledge.
Its fairly easy but can vary a little from state to state.
A properly prepared and signed / notarized bill of sale is every bit as good as a clear title for selling purposes. A lot of times you can not get the title that quick, its not as easy as paying it off at a bank and them handing it across the desk. Some states now do ELT (Electronic Lien and Title), Florida is one. A title probably does not exist yet. A new RV comes with a "certificate of origin" which is not a title.
Our Hybrid was financed at a bank in MD but registered in PA. When it was registered there was no written title issued, just an electronic lien recorded based on the certificate of origin. When the buyers bank sent our MD bank the amount to pay the trailer off, they released the lien electronically in PA. PA now prints and issues the title, and I should be getting it in the mail any day. It takes a week or so.
In the meantime I have the money, the buyer has the trailer (he obtained a temporary tag from his state based on our bill of sale) and I think we both have insurance on it lol. We both have a signed and notarized bill of sale so in the eyes of the law it's his trailer. When I receive the title the wife and I sign it, have it notarized and overnight it down to him and its all over with. It can be done and its not as big of a PITA as it sounds. Like I said before you need to have some trust between the parties.