How much are you willing to lose?
That is the answer to the question asked when companies call and inquire if they should be doing a lien search.Would you send $65,000 of your money to Vegas with a business associate who you receive equipment from to gamble for you? If so, that maybe is the only guy you should receive used machinery from and gamble that there are no liens that will follow.
Then again, does that business associate do lien searches on equipment coming through his business or is he taking the same chance with someone you don’t know? That other guy? That’s really who you are risking that $65,000 with. He could be the one with the unpaid liens. He could be the guy that was paid in cash for the machine. Then he took that cash to Vegas instead of paying off the creditor that holds the machine as collateral – that you just took into possession and now own the debt.
There is your $65,000 in addition to what you just paid for the machine, along with attorney and court fees to sue the guy that didn’t pay his creditor. And what was the cost of the, now uncomfortable, relationship with your associate who passed along the problem? How much are you willing to lose? The lien search wouldn’t cost nearly that much.
Maybe $65,000 is more than you are comfortable risking. Whatever the number is you are willing to risk, any deal below that is where you should be requesting a lien search