He has a title - it just has a lien on it. That's common, whether buying local or long distance. Make your check payable to the owner AND the lien holder and write a sales contract that explicitly makes sale contingent on lien payoff and a clear title. Set a firm date by which he must deliver the title, e.g. 10-14 days out.
The above works if the lien amount is equal or less than the sale price. If the seller owes more than the rig is worth, insist that he pay down the loan lien before you write your check, i.e. you are basically paying off the loan for him.
When I sold my coach that had a loan lien, I invited the buyer to come with me to the bank, bringing his check. That way he knew the lien was paid off (I gave him the receipt) and I turned the title over to him as soon as the bank released the lien.
Different states and different lenders handle titles with liens differently, so find out the procedures in the state where the title is issued. Typically the lender releases the lien within 5-7 days of loan payoff and the state will then issue a clear title (no lien) immediately or within 1-2 days.
