Bill of Sale

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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 a seller. You will need the bill of sale to purchase or sell valuable items of more than $500 (e.g. vehicles, animals and pets, personal property like furniture or equipment, firearms, etc.). Ensure complete security and legality of your purchase and sale deal across the U.S. with this customizable bill of sale.
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Template Description

man checking motorcycle

Imagine you want to buy a motorcycle from your neighbor who has agreed to sell it to you. The last thing you might be thinking of is the paperwork, which isn’t as interesting as the motorcycle. However, any purchase of a vehicle or other valuable asset may bring future disputes unless the relevant legal documents support the sale agreement.

A bill of sale document ensures the legality of a purchase and sale operation and helps both parties understand their responsibilities and liabilities when selling or buying items. This legal document is necessary to help regulate the buying and purchasing process. The following is a guide for making a bill of sale that you can rely on to use in 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 legally establish new ownership rights, a bill of sale is required for the purchase or sell of items valued at over $500 (e.g., vehicles, animals and pets, personal property like furniture or equipment, firearms, etc.). Additionally, local revenue agencies will charge these transactions with sales tax.

Insight

You may also know the bill of sale as proof of sale, proof of purchase, proof of payment, or sales receipt. It protects the buyer and seller in the transaction and ensures that both parties have a record of the exchange, helping outline liabilities and warranties.

Parties of the Bill of Sale

  • Seller –– The person or organization who is selling the item or property (vehicles, animals, furniture, or equipment) to the buyer.
  • Buyer –– The person who is purchasing the item or property from the seller in exchange for an agreed amount of money or trade.

Key Terms

  • Party information: Details about both the buyer and the seller, including legal names, mailing addresses, contact information, and other identifiable information. The bill of sale must clearly state which person is the buyer and which is the seller.
  • Item description: This includes detailed information about the item that is being sold. The precise information needed depends on the property being sold. For example, a vehicle sale must include the car’s make, model, year, and current condition. The location of the property is also important, especially if purchasing from another state.
  • VIN: The vehicle identification number (VIN) must be included in a bill of sale for a car or other vehicle. The VIN is a seventeen-digit code of letters and numbers that contains information about the vehicle’s identity.
  • Payment: The payment terms must be included in detail. The document should state the agreed purchase price and if sales tax is included. The agreed payment methods and payment deadlines also need to be included if applicable.
  • Trade-in: Rather than exchanging property for money, some transactions involve trading one item for another. In these situations, detailed information about the second item needs to be included, along with a statement verifying that both items are of equal value.
  • Gift: An item can also transfer ownership from the seller to the buyer without exchanging money or trading items if the item is being issued as a gift. A bill of sale is still crucial to act as a legal record of property transfer. However, the document must stipulate that the property is being transferred as a gift, which is essential for tax reasons.
  • Warranty: The warranty clause describes the terms for replacing the item within a particular timeframe if the buyer detects damages or receives a faulty item. The warranty can be omitted if the items are being sold “as is”—a term used to transfer the item in its current condition if the buyer agrees to accept it.
  • Signatures: Printed names and signatures of both parties are required to make the bill of sale legally binding. Some bills of sale also require notarization from a third party. The parties must sign the document to finalize the legal transfer of ownership.

What Are the Different Types of Bills of Sale?

Several types of bills of sale cover the sale and purchase of different kinds of property. The following are the most common items that require a proof of sale:

  • Bill of sale for vehicles—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—bedroom or dining room sets, antiques, etc.

Lawrina offers these types of bill of sale templates:

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 witness. Therefore, a bill of sale is strongly recommended for items purchased or sold for over $500. 

Insight

When the notary witnesses a proof of sale, that proof of sale will be easier for the new owner to register with state authorities and protect both parties’ rights and interests. Any standard bill of sale should comply with recent state laws across the country.

How To Write a Bill of Sale

The seller is always responsible for drafting the bill of sale, whereas the purchaser needs to read over the document and sign after agreeing to the terms of the contract. The following is a step-by-step guide for how to create a bill of sale for both parties.

Instructions for the Seller

  1. Download the printable bill of sale template. 
    You can easily download the sample template in PDF format on Lawrina. If necessary, revise the document before printing to make it appropriate for the type of property you’re selling.

  2. Begin negotiations with the buyer.
    Clarify the condition of the item being sold and discuss a fair price for the purchase. This is also the opportunity to discuss trade information, decide on payment plans, and agree on payment methods.

  3. Draft the bill of sale agreement.
    This can easily be done by filling in all the blank sections of the form template with the relevant information. Be sure to include information for both the seller and the buyer, a detailed description of the property, the agreed terms, and the warranty agreement terms if applicable.

  4. Sign and date the bill of sale.
    In some states and depending on the type of property sold, the seller’s signature may suffice to make the transfer of ownership legal. In other situations, both the seller and the purchaser must sign and date the form.

  5. Have the bill of sale notarized.
    Some states—including Louisiana, Maryland, Montana, Nebraska, West Virginia, and Wyoming—also require the agreement to be notarized when selling a vehicle to make the document legally binding. In other jurisdictions, buyers and sellers can choose to have the form notarized for an extra layer of verification.

  6. Print copies of the bill of sale.
    Once the bill of sale has been written and signed, make two copies of the document. Retain one as proof of the deal, and give the buyer one as proof of the purchase. Keeping a bill of sale on record for at least one year after the transfer of ownership is recommended.

Instructions for the Buyer

  1. Negotiate the terms for the purchase.
    The buyer is not responsible for drafting the bill of sale document. However, you do play a crucial role in negotiations for the purchase. Discuss the price of the item, payment schedules, trade-in items, and payment methods with the seller until you reach an agreement that both parties are happy with.

  2. Provide contact information and names.
    The seller needs to add the buyer’s personal information to the bill of sale document to make it clear to whom ownership is being transferred. You must provide your legal name, mailing address, and contact information.

  3. Check the terms before the seller signs.
    Before the seller signs the bill of sale, read through the terms and be sure that you agree. In some states, the seller’s signature alone makes the document legally binding. If you’re unhappy with the terms, renegotiate before anyone signs.

  4. Sign and date the bill of sale.
    Depending on the laws in your jurisdiction, you may also need to sign and date the agreement to make it legally binding. Check the laws of your state to confirm whether this step is required. Some states also require the bill of sale to be notarized.

  5. Keep a copy of the legal document.
    If the seller does not offer, request a copy of the bill of sale to keep. This acts as your proof of purchase. If there are any disputes over the purchase or you need to use a warranty, you will need to be able to produce the paperwork. Keep a copy of the document as long as the warranty is valid.

How To Use a Bill of Sale

Common Use Cases

man asking about motorcycle

A bill of sale is a legal document used for purchase and sale deals and title transfers. It proves that the purchase and sale operation occurred on a specific date in a particular location and helps to prevent 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. The signed bill of sale may be required to apply for a title at your local department of motor vehicles (DMV) or probate office. This ownership transfer procedure is required in several US states but is recommended in all jurisdictions.

After you sign a proof of purchase, you may need to pay a sales tax if it applies to your purchase and sale deal. For example, when the subject of the bill of sale is a car, the buyer must pay sales tax based on the state or county where the deal occurs or where the new owner registers the car. A seller can include the tax in the car price or split the fees.

Warning

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

When Not To Use the Bill of Sale

Although the bill of sale is useful for transferring ownership of property between two people, there are times when buyers and sellers can proceed with a transaction without a bill of sale. Below are some general examples of when a bill of sale is not required:

  • When the item costs less than $50;
  • When purchasing real estate—rather than a bill of sale, these transactions need a real estate sale and purchase agreement;
  • When selling services for a fee rather than property—these transactions need a service agreement instead of a bill of sale.

State Law

Not all states require a bill of sale to certify ownership. According to state law, a bill of sale is only needed in specific jurisdictions. Below are the states where you should submit your bill of sale to obtain your ownership certification.

Warning

A bill of sale is a document that records that a sales transaction occurred between two parties. It does not prove ownership but a title transfer. To transfer the vehicle title and complete the paperwork, the DMV in your state may require you to bring a completed bill of sale.

Below are the states where you should submit your bill of sale to obtain your ownership certification.

State Law
Alabama

Bill of Sale is required for owner certification.

State Law
Alaska

Bill of Sale is NOT required for owner certification.

State Law
Arizona

Bill of Sale is NOT required for owner certification.

State Law
Arkansas

Bill of Sale is required for owner certification in specific cases.

State Law
California

Bill of Sale is NOT required for owner certification.

State Law
Colorado

Bill of Sale is required for owner certification.

State Law
Connecticut

Bill of Sale is required for owner certification.

State Law
Delaware

Bill of Sale is NOT required for owner certification.

State Law
Florida

Bill of Sale is NOT required for owner certification.

State Law
Georgia

Bill of Sale is NOT required for owner certification.

State Law
Hawaii

Bill of Sale is required for owner certification.

State Law
Idaho

Bill of Sale is required for owner certification.

State Law
Illinois

Bill of Sale is NOT required for owner certification.

State Law
Indiana

Bill of Sale is NOT required for owner certification.

State Law
Iowa

Bill of Sale is NOT required for owner certification.

State Law
Kansas

Bill of Sale is NOT required for owner certification.

State Law
Kentucky

Bill of Sale is NOT required for owner certification.

State Law
Louisiana

Bill of Sale is NOT required for owner certification.

State Law
Maine

Bill of Sale is required for owner certification in specific cases.

State Law
Maryland

Bill of Sale is NOT required for owner certification.

State Law
Massachusetts

Bill of Sale is NOT required for owner certification.

State Law
Michigan

Bill of Sale is NOT required for owner certification.

State Law
Minnesota

Bill of Sale is NOT required for owner certification.

State Law
Mississippi

Bill of Sale is NOT required for owner certification.

State Law
Missouri

Bill of Sale is NOT required for owner certification.

State Law
Montana

Bill of Sale is NOT required for owner certification.

State Law
Nebraska

Bill of Sale is required for owner certification in specific cases.

State Law
Nevada

Bill of Sale is NOT required for owner certification.

State Law
New Hampshire

Bill of Sale is NOT required for owner certification.

State Law
New Jersey

Bill of Sale is NOT required for owner certification.

State Law
New Mexico

Bill of Sale is NOT required for owner certification.

State Law
New York

Bill of Sale is required for owner certification.

State Law
North Carolina

Bill of Sale is NOT required for owner certification.

State Law
North Dakota

Bill of Sale is NOT required for owner certification.

State Law
Ohio

Bill of Sale is required for owner certification.

State Law
Oklahoma

Bill of Sale is NOT required for owner certification.

State Law
Oregon

Bill of Sale is required for owner certification.

State Law
Pennsylvania

Bill of Sale is NOT required for owner certification.

State Law
Rhode Island

Bill of Sale is required for owner certification.

State Law
South Carolina

Bill of Sale is NOT required for owner certification.

State Law
South Dakota

The state-specific Bill of Sale is required for owner certification.

State Law
Tennessee

Bill of Sale is NOT required for owner certification.

State Law
Texas

Bill of Sale is NOT required for owner certification.

State Law
Utah

Bill of Sale is NOT required for owner certification.

State Law
Vermont

Bill of Sale is required for owner certification in specific cases.

State Law
Virginia

Bill of Sale is NOT required for owner certification.

State Law
Washington

Bill of Sale is required for owner certification.

State Law
West Virginia

Bill of Sale is required for owner certification.

State Law
Wisconsin

Bill of Sale is NOT required for owner certification.

State Law
Wyoming

Bill of Sale is required for owner certification.

Nevertheless, it is still recommended to have a bill of sale even if not required by state law. These legal documents can help buyers track sale information and help relieve sellers of liability over the property. They also serve as proof of ownership in case either party tries to deny the transaction, and they define the purchase condition in case of any claims on the warranty.

Insight

Notarization is the process of getting an impartial witness to sign the bill of sale, confirming the identification of both parties. Most states do not require a notary to witness the signing of a bill of sale. Moreover, by law, a notary public must witness both parties signing the document in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. Notaries are optional in other states.

As with the requirement for a bill of sale, it is still advisable to have the agreement notarized, even if it isn’t required by state law. Notarization acts as an extra layer of verification and makes the document more permissible in a court of law in case of any disputes.

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Frequently Asked Questions

Is a bill of sale legally binding?

A bill of sale is a legally binding document, and it is essential to comply with your state’s requirements which can vary by state. 

For instance, in many states, only the buyer must sign the Bill of Sale, while other states need both parties to sign the document, and some even require that the Bill of Sale be notarized. However, it is essential to note that without the buyer’s signature, the Bill of Sale may not be enforceable.

Does a bill of sale need to be notarized?

A bill of sale is a document drafted by the seller that can be used to sell any property category. Most states do not need a notary to witness the bill of sale is signed. 

Furthermore, according to law, a notary public must witness both parties signing the agreement in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. Notaries are optional in other states. It is essential to check your state requirements when entering into a bill of sale.

Who signs a bill of sale?

Some states require only the buyer to sign the document, while others require both the buyer and the seller to sign the bill of sale.  Possession of the signed bill of sale and payment of the title transfer fee may be required to apply for a title at the state's DMV. 

Other states call for the form to be notarized. You would need to look at the State requirements. However, it should be noted that without the buyer's signature, the Bill of Sale may not be an enforceable contract.