Smells fishy to me. Just the fact the buyer is ready to apply for a loan without even seeing the car is a sign. No one needs to see the title before-hand. You can sign it over to the buyer after you have cash in hand.
Get the name, location and number of the State Farm agent. See if you can find them in the phone book or such. Ask if you can call them back.
Cash or a cashiers check always makes things easier.