An equipment bill of sale allows you to transfer ownership of high-value equipment from one person to another. It provides a record of the transaction, details the sale terms, and helps protect both the buyer and the seller in case of any disputes. Most often, it is used in transactions relating to construction and farm heavy equipment.
What Is an Equipment Bill of Sale?
A bill of sale for equipment gives the buyer proof of purchase and ownership, allowing them to register various types of machinery. For sellers, it consolidates important information into one document that clarifies the transaction terms.
Equipment is personal property, so a written agreement is usually needed for the transaction. For instance, the U.S. Commercial Code (UCC) requires deals over $500 to be in writing, making it easier to resolve any disputes [1] .
If a dispute arises, a bill of sale for equipment over $500 protects both buyer and seller. Even for smaller amounts, using a bill of sale ensures all details of the deal are clearly outlined.
You may need to use this form if you plan to sell any of the following goods:
- Home Appliances: From big-ticket items such as dishwashers, stoves, and laundry washers to small kitchen appliances, it’s crucial to fill out and sign a bill of sale.
- Outdoor Equipment: Using a farm equipment bill of sale seems commonsensical. But residential items such as mowers and other lawn care machinery also need documentation.
- Power Tools: While residential power tools aren’t always valued above $500, buying and selling generators, table saws, compressors, and nail guns, among other things, calls for a standard equipment bill of sale.
- Office Equipment: High-priced electronics aren’t the only business items that require bills of sale. Desks, storage cabinets, and other furnishings also call for sales documents.
- AV Equipment: Recording studios, nightclubs, DJs, and cinematography operations benefit from an equipment bill of sale when completing transactions.
- Hobby Equipment: Regarding a legal transaction, there is no difference between skiing, fishing, diving, woodworking, and construction equipment. The parties involved are best protected from disagreements when they document and sign off on the transaction.
How to Sell Used Equipment
Selling used equipment can be a profitable way to recoup some investment or clear out space. To get the best deal, sellers need to follow a strategic approach.
Assess the Condition
Before listing the equipment for sale, thoroughly assess its condition:
- Visual Inspection: Check for any visible wear and tear, rust, or damage that may affect the equipment’s performance or appearance.
- Functionality Test: Ensure that all mechanical and electronic components work as expected. A machine that runs well will attract serious buyers and justify higher prices.
- Minor Repairs and Cleaning: Consider making small repairs or deep-cleaning the equipment to improve its appearance and functionality. Even a well-maintained piece of equipment with a few touch-ups can make a big difference in how it’s perceived by potential buyers.
Determine a Fair Price & Ideal Market
Pricing your equipment appropriately is key to attracting buyers while maximizing your returns. Look at recent sales of similar equipment on platforms and auction sites to gauge what others are charging.
Consider the age and condition of your equipment. Even if it’s fully functional, heavily used equipment may not command top dollar.
Understand the market for your equipment. Niche markets may command higher prices, whereas more common items may need to be priced competitively. Assess where your potential buyers are. Local businesses may be interested in picking up the equipment quickly, while national or even international buyers may need to consider shipping costs.
Advertise the Equipment
Most expensive equipment is sold in person after negotiation of price, terms, and payment type. However, expanding the buyer pool can help sellers increase selling prices.
These platforms are known for equipment listings:
- Equipment Trader: This platform lists new and used equipment like construction machinery and tools. It charges a nominal listing fee.
- Machinery Trader: This site provides free listings for heavy-duty equipment.
- Facebook Marketplace: This free option has grown in popularity due to its category and regional search capabilities. It also has specific groups for equipment listings.
- Craigslist: This tried-and-true platform is excellent for getting the word out. However, sellers do experience a high volume of spam replies. When advertising online, knowing how to sell your equipment safely is crucial.
Negotiate and Finalize the Sale
Negotiation is a key part of selling used equipment. Be prepared for offers below your asking price. Be flexible but firm: Set a lower limit and don’t accept anything below that.
Clarify payment methods early on. Cash or a certified check is often safest for in-person transactions. Meet in a safe public place or at a financial institution when large amounts of money are involved.
Arrange Pickup or Delivery
Once the sale is finalized, arrange for the buyer to pick up the equipment or organize delivery. If delivery is required, ensure that both parties agree on terms for transportation and costs.
For larger items, having an independent delivery driver contract in place may be necessary.
How to Write an Equipment Bill of Sale
Step 1: Identify the Parties
Include the buyer and seller’s names, addresses, and phone numbers.
Step 2: Describe the Equipment
Write in the make, model, year, type, color, mileage, or other applicable information. A heavy equipment or farm equipment bill of sale may need the vehicle identification number. If the item has to be registered, a VIN is usually required.
As with some farm machinery, a mileage reading may be necessary on a heavy equipment bill of sale for registration and tax purposes.
Step 3: State the Purchase Price
Include the total purchase price to ensure that a buyer pays the correct taxes and registration fees. Identifying the payment type can help resolve post-sale disagreements. Provide details on how and when payments are to be made.
Step 4: Include the Sale Date
When the actual transaction occurs, you must enter the current date on an equipment bill of sale. If any unique details or conditions, such as an “As Is” sale, put them in writing.
Step 5: Add Signatures
Finalize the purchase and sale agreement by signing the document. Some states may require notarization. If a notary is needed, bring your identification and sign the bill of sale in the official’s presence.
Equipment Bill of Sale Sample
Download an equipment bill of sale template below in PDF or Word format.
Frequently Asked Questions
Is a heavy equipment bill of sale legally binding?
Yes, a heavy equipment bill of sale is generally legally binding. It serves as a written record of the transaction, documenting the transfer of ownership from the seller to the buyer.
Can a bill of sale be used for leased equipment?
No, a bill of sale is typically used for the sale of equipment, not for leases. In a lease, the equipment remains the property of the lessor, and the lessee has only the right to use it for a specified period.
Does the bill of sale need to be notarized to be legally valid?
While notarization is not strictly required for a bill of sale to be legally valid, it can provide additional protection. Notarization verifies the identities of the parties involved and ensures that the document was signed voluntarily.
Is there any difference between an equipment bill of sale and a vehicle bill of sale?
While the basic structure and purpose are similar, there may be slight differences in the specific information required. For example, an equipment bill of sale might include details about the equipment’s serial number, make, model, and year, while a vehicle bill of sale might also include information about the vehicle’s VIN (Vehicle Identification Number), mileage, registration numbers, and any outstanding liens.
