So I find a boat I like, talk to my bank they tell me I am approved. They tell me that they need a signed original bill of sale and that I have to have the boat registered showing them as the lien holder before they will send the funds to the owner. WTF?

I know if I was the owner, I would not want to sign over the boat without being paid.

How have you guys that finance stuff been doing it? The lady at the bank says this is how they have always done it. Anyone have an ideas?

No one has financed a used boat from their personal bank?

is the boat local to you?

with cars we deal with the same thing all the time. the bank wants the title before they give funds, a bill of sale signed should get you some legal paperwork from your bank, you can give that to the guy your buying from with a letter of intent from the bank, that will guarantee him his money once they recieve the title. if he is local to you then he can take the title to the bank and swap it for a check.
if he has a payoff then this wont be as smooth.

No the boat is some 1700 miles from me. I like the idea of a letter of intent or even a PO number from the bank.

But no seller wants to give a signed bill of sale without recieving payment first. But I would accept a banks letter of intent or PO. Thanks for the idea.

I have been on both sides. I have been a banker and a purchaser. Their are a number of ways to handle it but, bottom line, if the seller has ever sold a boat before he is very familiar with the process. The simplest way is if your bank is a larger instition, they should have a branch near the seller and all can be done when going to pick up the boat. Another option may cost you a little money, but use a broker or dealer. It still doesn't get the seller his funds before the title is recorded with lien holder info but may ease the seller's mind with the fact that dealers go this route all the time.

have the bank talk to the seller then set up a wire transfer of funds to the seller.

That's what the guy who bought my old boat did. I was a little nervous but it all went well.