Bill of Sale

Imagine you want to buy a motorcycle from your neighbor who has agreed to sell it to you. It’s super fast, new, and attractive, and the last thing you’re thinking of is legal paper bureaucracy, which isn’t as fancy as the motorcycle. 

Any purchase and sale deal may cause future disputes unless a relevant legal document supports the agreement. A bill of sale document ensures the legality of a purchase and sale operation and helps both parties understand their liabilities when selling or buying items.

To help you regulate the buying and purchasing process, you will need a bill of sale. Here is a guide for how to make a bill of sale that you can rely on with peace of mind and use in your future deals. 

What Is a Bill of Sale?

A bill of sale is a type of receipt used to transfer the ownership of an item in exchange for money or trade between a buyer and seller. To establish the new rights legally, you will need the bill of sale to purchase or sell valuable items of over $500 (e.g. vehicles, animals and pets, personal property like furniture or equipment, firearms, etc.). Plus, revenue agencies charge these objects with sales tax.

You may also know the bill of sale as proof of sale, proof of purchase, proof of payment, or sales receipt. 

What Are The Different Types of Bills of Sale?

Here is the list of common subjects of proof of sale:

• Bill of sale for car — a car, boat, trailer, motorcycle, bicycle, aircraft, moped or scooter, tractor, all-terrain vehicle (ATV), etc.
• Bill of sale for animals — dogs, cats, horses, livestock, etc.
• Bill of sale for equipment — technical, medical, educational, sports, etc.
• Bill of sale for furniture, etc.

Bills of sale can be “as-is” or notarized. If you agree to buy or sell an item in its present condition, even with flaws, you should use an “as-is'' proof of sale.

A notarized bill of sale allows for legal ownership transfer under a notary’s control, so it is strongly recommended for items purchased or sold over $500. When the notary witnesses a proof of sale, that proof of sale will make it easier to register a new owner with state authorities and protect both parties’ rights and interests.

Any bill of sale should comply with recent state laws across the country. If you want to ask a question about your sale deal, you can find a lawyer near you.

When Should I Use a Bill of Sale?

A bill of sale form is a legal document used for purchase and sale deals and title transfers. It proves that the purchase and sale operation took place on a specific date in a particular location and helps avoid disputes between the parties.

If you want to transfer ownership of the item to another person, you will need a well-prepared bill of sale to register the new title. This ownership transfer procedure is required everywhere across the U.S. In certain states, you should notarize the bill of sale. 

After you sign a proof of purchase, you may need to pay the sales tax if they apply to your purchase and sale deal. For example, when the subject of the bill of sale is a car, a buyer will have to pay the sales tax according to the state or county where the deal occurs. A seller can include the tax in the car price or split the fees.

What happens if I don’t use a Bill of Sale?

If you skip creating and signing a simple bill of sale, you can face serious consequences. First of all, if you and the other party have reached a disagreement over the item, without a legally valid sales receipt you will not manage to defend your rights and interests. In court, you will not be able to prove the fact of your sale transaction either.

When Shouldn't a Bill of Sale Be Used?

You can proceed without a printable bill of sale in the following cases:

• If your item costs less than $50. 
• Real estate purchase and sale deals. In this case, you will need a real estate purchase and sale agreement.
• Service delivery. When you order or provide services for a fee, you should compose a service agreement instead of a bill of sale.

What Should Be on a Bill of Sale?

Although proofs of purchase can be brief, they must include specific definitions and details.

Key Terms

• Seller — the person who is selling the item;
• Buyer or Purchaser — the person who is going to buy the good;
• Item description — the complete information on the item: size, model, color, its current conditions;
• VIN code — a Vehicle Identification Number of seventeen digits and letters that ensures the vehicle validity if you work on a vehicle bill of sale;
• Payment — the fee details (e.g. the agreed price, payment deadlines, and payment methods);
• Notary Public — a third party who notarized the bill of sale if it applies to a specific purchase and sale deal;
• Warranty — a clause that describes the terms of replacing the item within a particular time if the party has detected damages. You can omit this term if you sell an item “as-is”;
• “As-Is” — the term used to transfer the item in its current condition, including its flaws, and a Purchaser agrees to accept the good as it is;
• Trade-In — a type of transaction that provides the item at a reduced price negotiated between the parties;
• Gift — the term that highlights the purchase and sale operation without any purchase price; and
• Certificate of Title — an optional statement that specifies the item ownership at the purchase and sale deal and after.

How to Write a Bill of Sale?

See the following steps below for how to do a bill of sale.

Fill in all the necessary information

After negotiations, you can put all the discussed information in the following points:

• Contacts of the parties involved — names, addresses, phone numbers, or emails;
• The item description from A to Z — the VIN code (for vehicles), and the model, size, color, year of manufacture;
• Expected fees and their deadlines;
• Parties’ duties; and
• Warranties.

Download contract template

When you are done with writing a bill of sale word template, you can easily download it in pdf or doc format. If necessary, revise the document. 

Introduce the document to both parties

You can provide the parties with the prepared bill of sale. If both parties agree to the specified terms and conditions, they can sign the document.