I think it's fairly straight forward. You need the signed title, a bill of sale, and I would insist on having the UVIP ( used vehicle indentification package ) which lists the current and any previous owners. It will also tell you if the car has any liens on it. If the seller, the title and the UVIP don't match up, I'd be asking a few questions.
Canadian government, be it Ontario or other Province, really doesn't care where the car goes. They only collect taxes when the car is plated. If you buy from a dealer you may end up paying 5% GST at point of sale. If you buy privately, there should be no taxes.
This being a German car, you may have some sort of duty to pay at US customs but with 20% + exchange rate you should be able to do OK with your sale. I would place insurance on the car from the moment you buy it. Some people used to buy a car, put insurance on it, and then throw thier own plates on it for a drive to the border. I wouldn't do that for a whole host of good reasons. You're safest bet is to trailer it to and through the border. With the harmonized system that is now in effect between Canada and the USA, you can't get away with anything.
Oh, and don't bring any undeclared guns with you. You
will be arrested.