You were unclear in what state your are in. In California, the Department of Motor Vehicles has a form (free) called a duplicate title app (pink in color). This form will allow you to sell the vehicle without the title in hand. This form, and a transfer of ownership form (form #262, also free from the DMV...yellow in color), will allow you to release your liability on the vehicle and transfer it to the new buyer. Both of these forms are legal DMV documents and have a place for you both to sign and date, to prove the actual transaction.
Also in your case, you should supply your new buyer with a copy of your release of lien letter you got from your bank after you paid off the loan. With these three documents in hand, your buyer just needs to go to the DMV and summit the forms to complete the transfer. A new title will be generated and mailed to your buyer in his/her name.
Again, this is what you would do if you are in California. All other states may have a similar procedure.
I hope this helps.