Unusual car sale situation - need advice

Guys,

I am selling an F-150 and have an agreement with a buyer for $16,000.  He got a loan from USAA and forwarded the check which was made out to me.  So far so good.

The issue is that the check is for $26,000.  He expects me to deposit the check and to give him the difference once the check clears.  I contacted USAA and they verified that the check is legitimate.  I met the guy at his house for a test drive and his documents all match the address.  I also validated that he is a finance manager at a car dealership in the area.

Am I right to be skeptical?  This seems a bit scammy to me, but I am not seeing where I can be "had".  It seems to me that the guy financed the truck for the maximum amount in an effort to get some cash.  He claims that USAA knows the purchase price of the vehicle but would not give him two separate checks since it is for a single loan.

What say you?  Should I nix the deal?  Should I go ahead with it since I will get the full amount of the check and the risk is with him getting back the overage?

I'm not an accountant but wouldn't that extra $10k show as profit to you and affect your income level for taxes?

That would have me nervous for sure.

Personally, I am not a bank.  I do not handle other people's money.

I'd say you are right to be cautious.  I know my brain would be screaming "SCAM!" at me, but it almost sounds legit. 

I would wait and see if a few more folks post in here.  Someone will likely have encountered something similar.

My only other thought would be to check with your bank and see if there's a time frame where the check could be recalled or something, then see if the guy is willing to wait that long for his money.

How did you contact USAA? Was it by calling a number that the purchaser gave you?

In reply to zaichikmiller :

This is risky, and you are right to question it. 

If I were to suddenly find myself in your situation, I wouldn't go through with it.

Somehow, and I'm not sure exactly how, but after you give him the $10k, the check he gave you will be clawed back and now you are out that amount, PLUS the truck.  You might get the truck back, but not the 10k.

There is now upside in this transaction for you to take on a $10k risk.  Find a new buyer or have this buy bring you CASH.

No.  Why on earth would he get a loan for $10,000 over your asking price.  This smells.    

Definitely be skeptical, this sounds just like a classic overpayment scam...although it seems like it's not a scam based on everything else, but I can't figure out how...it could be possible that he overfinanced.

Maybe he wants $10k in cash out of the auto loan for some reason and your purchase is a means to that end?

Unless the F150 is priced way under value, there is no way I can see them giving a loan for $26k on a $16k vehicle. 

Some banks with do 120% of the value on a loan, but 160% seems unrealistic. 

As part of the buying process did you have to fill out any paperwork for the purchase and sale agreement, intent to sell, or any other forms for the bank that had your info?

If not, then I'd assume scam until proven different. 

I'm not a lawyer, I didn't sleep in a holiday inn last night, and I check both ways when crossing one way streets, so YMMV. 

In my experience buying several cars with usaa- they list a max price. The seller fills that in and then they are sent a check for that exact amount. I have not purchased with usaa from an individual. This doesn't seem normal from the usaa side. Their  number is 800-531-8722

Ask yourself this question:  "If he's the finance manager at a dealership in the area, why is he buying your truck, instead of one from his OWN dealership?"  Smells SUPER fishy to me.

New theory: The guy has a terrible gambling addiction, has already sold his fancy managermobile to help fund it, and this move gets him some wheels plus $10k in breathing room for his kneecaps.

Always trust your gut.  F150s are not hard to sell.  No reason to jump through hoops for some jabroni you don't know.

Only way I would complete this transaction is to meet the gentleman at his bank, let him deposit the USAA check into his account, and have the bank teller hand you the purchase price of the vehicle in cash.  Note that you should call ahead to the bank, if they are a credit union or not a main branch they make not have $16k in cash on hand.  But if you give them notice you can do it.  There is nothing questionable or illegal about buying a vehicle in cash regardless of the selling price, don't let anyone tell you otherwise.

I am sure this buyer has a million reasons why the option I lay out above can not be done, so you should probably just tell him you sold it to someone else and move on.  

Sounds like a scam to me.  Perhaps he's scamming the bank rather than you, but I would want no part of it.

This is the playbook for the usual money order scam. "Accidentally" send too much money, ask you to send them the overpayment and a friend/shipping company will be by to pick up the vehicle. Later, you discover the money order is faked and nobody ever comes for the vehicle.

The fact that he's a finance manager at a dealership means he knows just how sketchy this seems. The only way I'd go forward with it would be something like 93gsxturbo's plan - make it the buyer's job to get you cash.

No way I would touch this.  You will have no trouble moving on to a non-weird buyer.

If you really want to proceed, tell him to bring you cash or a USAA check for $16,000, and then he can refinance it himself if he wants.

But I would simply dismiss this potential problem out of hand.

Thats a textbook scam. The check will bounce as soon as you send the buyer the funds. They'll use the time between receiving the 10k and the check clearing to remove the funds from the host account. 

Walk away.

Everything about it says "HELL NO". 

I appreciate the feedback and have informed the potential buyer that I will not accept a check for more than the purchase price.

I tried to respond several of the comments but found that even though I have been a member and active lurker since 2016, I can only post one comment an hour because of how few posts I have made.

I will let you know what he says, but I suspect that I will need to relist the truck.

I think he is scamming USAA, not you (assuming you googled the number and didn't just use a number he gave you). You could probably cash the check, reimburse him, and be totally fine, but I wouldn't. 

I have bought with USAA before. If I was buying your truck for 16k, I'd first apply for the loan, and they'd say that, based on my credit, income, and debts, I'm approved for 26k - unrelated to the value of the truck. Then, I forget the exact details (its been ten years), but I think I'd tell them the exact amount I want on the check (presumably limited by 120% FMV), and then they'd mail the check made out to the seller for that amount. Methinks the buyer lied to USAA about the price of the truck. If I am remembering their process correctly. 

I wonder if you might have some liability if the buyer stops making payments to usaa, they repo the truck and start questioning the discrepancy between what the truck's worth and what he paid for it. Feels like you'd be actively participating in loan fraud against usaa. (This is putting aside the whole idea that the check is possibly bogus) Run. 

In reply to zaichikmiller :

So scammy.

Is your truck worth $26k?  If it is, sell it for a price closer to $26k. 

If it is not worth $26k then why would a real bank lend $26k on it.  

The buyer has a problem.  Make him fix his own problem.  Dont make it your problem!

I'm with everyone else here, sounds scammy, even if it isn't a scam it's shady to say the least. 

Like Mr. Welsh said, "Don't make it your problem!"

that's literally how scams work, i get you checked it all out, but no.