I just bought and sold a used car in Texas. It could not have been more confusing and the state employees in charge could not have been less helpful. Both me and the seller were lawyers and neither of us had any clue how to do it.
But I just sold my car and (I think) figured it all out. Now I want to share it with you.
1. Sign over the title to the buyer.
This is the part you don't want to screw up. Getting a new title issued is just slightly easier than getting a copy of Donald Trump's tax returns. And it'll cost you time and money.
A Texas title is a two-page (front and back) document that acts as official evidence of ownership. Whoever holds the title owns the car. The title lists the owner(s) of the car on the front page. It should be signed by the owners as soon as they get it (but no one ever does this—they just stick it in the glovebox). Do it now. The signatures should read exactly as the owners do above them (husband and wife or co-purchasers sign next to each other).
Next, flip the title over. This is where the business happens. The first box at the top is called Assignment of Title. This is where the entire vehicle sale takes place. On the first line, the PURCHASER (or purchasers) writes his name and address. The name(s) should look exactly like the buyer wants the new title to read.
Great, now you write the car's milage as displayed on the odometer. Don't check any boxes unless your odometer has rolled over (basically impossible, but box 1) or is broken (possible, but unlikely, box 2).
Congratulations, now write the date of the sale.
Next up, the important stuff. Put your John Hancock (signature) on the line above Signature of Seller/Agent. Write the signatures in order as they appear on the front of the title (husband and wife, etc.). Then, PRINT your name(s) EXACTLY as they appear on the front of the title (no punctuation) on the line next to your signature.
Fantastic. Almost done. Now the buyer does the same thing on the line below you. Again, the names should appear EXACTLY how they want them to appear on their actual title. No punctuation. No nothing. Just signatures and names.
Woohoo! You just transferred your title. The new owner now owns your car. Wait, is it really that simple? OF COURSE NOT! There's a whole lot more paperwork and hours spent waiting in line at the county Tax Assessor's office ahead of you. But, you are done with the most important part.
2. Fill out and sign an Application for Texas Title.
This is a little known form lovingly named 130-U by the Texas Department of Motor Vehicles. It is absolutely necessary to transfer the title and you cannot sell or buy a used care without it. They will kick you right out of the Tax Assessor's office without it (the first time I bought a used car in Texas, I literally wrote a bill of sale on the back of a scrap piece of paper in my glove box and took it to the Tax Assessor. They laughed in my face).
Oh, and it's about as confusing as an IRS Form 1040, but without the helpful instructions.
First, Check the Title & Registration box at the top. Do not do ANY of this in front of the lady at the Tax Assessor's office because she will kick you out into the street for "altering a government document." Do all this either with the buyer/seller or in the privacy of your own home/car/tax assessor parking lot, etc.
Next, fill out all the information you can in boxes 1-12. This is where you write the VIN number (make sure it matches the VIN on the title), model year, make (the company that makes your car), body style (copy what it says on the title), model, color, minor color (I guess if you have a two-tone paint job—YUK!), Texas license plate number, odometer reading (this better match the OD reading on the title)(and, again, only check the box if you checked one on the title), and finally empty weight (leave it blank unless you know this, which no one does), and carrying capacity (again, leave blank).
Nifty, now move on to Box 13 and check "Individual" unless you're selling your car to a business or the government (weird) and then check business or government.
OK, now we're getting down to brass tacks. In boxes 16 and 17, fill out the first, middle, and last names of the BUYERS (this form conveniently calls them "applicants") EXACTLY how they read on the transferred title. The "additional applicant" is the husband, wife, or whoever the co-buyer is. Do not screw this up. The lady at the tax assessor's office will laugh with psychotic rage as she pushes you out the door onto the street if you do.
Cool, now we're moving on down to Boxes 18 and 19, where the buyer/applicant now writes their address and county of residence (notice how the form switches to calling the buyer the "owner" now...nice).
Good. Now it's time for the seller (who the form calls "Previous Owner") to write his or her name(s), city, and state. Again, make sure this matches the names on the title.
Woopdedoo, now you get to skip all the way down to Box 37, where you write the sale price of the vehicle. This is the actual sales price. Don't try to do what I did on my first car purchase when I was 15 and try to lie and say you brought a 1979 Volkswagen Scirocco for $100 bucks. They're smarter than that now. They just look up the value of the car on the internet. Write in the actual price. Do not fill in anything else in this box. The nice people at the tax assessor's office want to calculate how much tax you owe them. And yes, they've already heard the one about how this car has been taxed multiple times and this is a violation of your Constitutional rights, yada, yada, yada.
Now, finally, we are close to the end. Skip down to the Certification Box. The sellers sign their names above where it says "Signature(s) of Seller(s)" and print them in the line next to it. Print them exactly how they appear on the title. Then date. This better be the same date as on the title or you know what.
Finally, the buyers (who the form now calls applicant/owner) sign and print their names on the lines below. The names and date must match the names and date on the title.
Ladies and gentlemen, we are done with the required paperwork. But now, just to be safe (and spell out the terms and conditions of the purchase) we need to do one more thing. The Bill of Sale.
3. Fill out and sign a Bill of Sale.
Again, you're not required to have this. The state doesn't care. It doesn't even want to see it. It's just the written agreement between you and the buyer/seller about the terms of the car purchase. After looking around on the internet, I made one up myself. Here's a link to it.
This is important because it spells out the date of the sale, the purchase price, and MOST IMPORTANT that the sale is AS-IS. This means the buyer gets the car as it is, no warranties, no promises, no nothing. Just the car. If something goes wrong as soon as the buyer drives off, tough beans. It's their problem now. Everyone signs this and the seller keeps a copy.
4. Gets paid.
This is the easy part. The buyers hands over raw cash or a cashier's check for the entire purchase price. DO NOT let the title out of your hands until this is done. Don't agree to take payments, meet the buyer later to pick up the money, accept a personal check, etc. This is where the rubber meets the road. Accept only cash or a cashier's check from a reputable bank.
5. Make a visit to the cheerful people at the County Tax Assessor's Office.
Get ready for some fun! The Buyer takes the transferred title and application to the appropriate county tax assessor's office (don't ask me why it's not the department of motor vehicles, it's the tax assessor. Texas is just weird that way) and gets in line.
The friendly clerk will fill out the rest of the form, walk you through the remainder of the process, and take your money. Bring cash or check because they don't take credit cards (well they do, but they will charge you like a 5% fee (a lot on a vehicle purchase) to use it).
If you did all this right (and chances are you did not), you will receive your new title in the mail in four to six weeks.