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A bill of sale is a document that is used to record the sale or purchase of personal property, such as a car, a laptop, or any other goods. Whether you are the seller of the property or the lucky buyer, a bill of sale helps to protect your legal rights and responsibilities by putting the agreement in writing before money changes hands. That way, you'll have proof of transfer of ownership, and you can refer to it if any questions arise about the sale of the object.
Use a Bill of Sale if:
You own a vehicle or other property (not real estate) that you'd like to sell or transfer, and you need a bill of sale for your accounting records.
You plan to buy a vehicle or other property (not real estate) from a private party and you want to have a record of the transaction in writing.
When you’re transferring goods to a buyer, a bill of sale form is the easiest way to make it legal. But just because a bill of sale is a fairly straightforward legal document doesn’t mean you shouldn’t know a few things before you start.
When you shouldn't use a Bill of Sale
For real estate: If you’re planning on transferring real estate property, you can’t use a bill of sale form. Real estate transactions are simply much more complicated and require different forms, such as a quit claim deed, or forms available only from your state or local government. Consult with a real estate attorney or real estate agent if you’re looking to transfer this kind of property.
For services: A bill of sale should be used when transferring goods, not when performing services. If services are involved (such as woodworking, babysitting, business consulting, etc.), it’s a better idea to use a general contract for services.
For small sales: This is a matter of personal preference, but most people do not feel it necessary to use a bill of sale when transferring cheaper property. If you’re selling a used guitar, a bill of sale makes a lot of sense. If you’re selling a couple old fishing lures, it might be more trouble than it’s worth.
Specific types of Bills of Sale
For certain items or classes of property, you’ll need to use a specific bill of sale. That’s because those bills of sale will contain information required to make the sale legal. Here are a few of those types of bills of sale, all of which we provide.
Car bill of sale: Used car sales between two parties are incredibly common, but you can’t use any bill of sale to transfer the ownership of a car. That’s because a car bill of sale has specific information you need to provide to actually purchase (or sell) an automobile. For example, to legally sell a car, you’ll need to let the buyer know the VIN number, the make and model of the car, the odometer reader, and whether or not that car is under any sort of warranty. Failure to provide that information can actually void the sale of the car.
A motorcycle bill of sale will contain nearly all that information as well. Omitting any of those details can likewise void the sale.
Boat bill of sale: Like a car bill of sale, a boat bill of sale contains information about the make, model, year, price, and valid warranty of the watercraft in question. But unlike a car, a boat has what’s called a HIN (this stands for hull identification number.) Like a VIN, it’s unique to each boat and is used by government agencies in keeping track of the ownership chain.
Benefits of a Bill of Sale Form
A bill of sale helps the transfer of property go smoothly for both buyers and sellers.
Taxes: as a seller, you may need to report the sale amount as part of your tax documents or for business accounting purposes.
As-Is: indicating on a bill of sale that you have sold property "as is" protects you as a seller if the buyer encounters problems with the item after purchase. For example, if a person buys an automobile from you and it breaks down after he or she drives away, you are not responsible for the repairs or damages.
Transfer of Ownership: a bill of sale also documents when the item was transferred to a new owner, which can be critical in certain cases. For example, if someone buys a gun from you and the gun is then used to commit a crime, a signed bill of sale form may be used as supportive evidence that you were not the owner of the firearm at the time of the crime.
Proof of Ownership: as a buyer, a bill of sale provides proof of ownership, allowing others to verify your rights to property. Whether registering a motorcycle at the DMV or totaling the value of your assets for a bank loan, the document serves as required proof of ownership.
Date of Ownership: other benefits include documentation of the date that you became owner of an item, preventing disputes about when the property was transferred. The value of the property as agreed on by buyers and sellers is also included on a bill of sale form, limiting conflict over how much was paid or received and/or when payment(s) were made.
More Bill of Sale Information:
Want to learn more about Bill of Sale forms? We've got you covered.
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Copyright 2015 Rocket Lawyer Incorporated. Rocket Lawyer provides information and software only.
Rocket Lawyer is not a "lawyer referral service" and does not provide legal advice or participate
in any legal representation. Rocket Lawyer is not a law firm or a substitute for an attorney or law
firm. Use of Rocket Lawyer is subject to our Terms of Service
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