A Bill of Sale is a legal document that transfers ownership of an item from one person to another. Bill of Sale forms are similar to retail receipts but are used to record the sale or transfer of valuable items like cars.
Most states require a completed vehicle bill of sale to register a motor vehicle at the DMV. Many recommend using a Bill of Sale if you buy or sell any item over $500. Using a Bill of Sale protects the buyer and the seller from future legal disputes over the item’s condition or ownership.
How to Write a Bill of Sale Form
Buyers and sellers can follow the simple steps below to fill out their blank Bill of Sale form and record the transfer or sale of an item.
The seller typically provides the Bill of Sale, but you may wish to bring your form if you’re the buyer. Check individual state requirements before creating your form, as some states have different requirements for specific items.
Complete the Bill of Sale fully and accurately describe the transferred or sold item. Suppose the seller withholds any information about the item. In that case, the Bill of Sale may be null and void (not legally valid).
Both parties should keep a copy of the signed Bill of Sale for their records.
Step 1 – Negotiate the Terms of the Sale
Before filling out a Bill of Sale, the buyer and seller should confirm the item’s condition and agree to its sale.
At this stage, both parties agree on a payment method and any special conditions of the sale, such as a warranty or financing. If the buyer chooses to pay in cash, the amount must be paid in full at the sale. Financing is commonly handled separately through a bank.
When a Bill of Sale includes a warranty, it must clearly explain what damage and repairs the guarantee covers and for how long. If the bill of sale does not have a warranty, the item is sold “as-is.” Therefore, the buyer must check the article thoroughly and ask questions before the sale is completed and the form is signed.
Step 2 – Fill Out the Bill of Sale With the Required Information
Once the terms of the sale have been agreed upon, the buyer and seller should complete the Bill of Sale form. Be careful as you fill it out, as both parties’ handwriting must be legible for the Bill of Sale to be valid.
A Bill of Sale includes the following sections that must be completed:
Seller and Buyer Information
The seller and buyer must write their contact details, including their full name, street address, city, state, zip code, telephone number, and email address.
Item Information and Purchase Price
This section will differ depending on the item you are buying or selling, but you’ll always need to write the purchase price and describe the item’s condition. Noting any faults or damage in detail will help you avoid disputes later.
If you are completing a Vehicle Bill of Sale, you’ll need to fill out the following information:
- model
- make
- year
- body style
- color
Other items have different sections. For example, boats require manufacturer, vessel type, and size. Horses need breed, sex, and the name of the sire.
Additional Information [For Motor Vehicles]
If completing a Vehicle Bill of Sale, you’ll need to write the odometer reading and vehicle identification number (VIN). The VIN is usually printed on the windshield or inside the door. The odometer reading is the current mileage at the time of sale.
Step 3 – Complete the Sale
Once you’ve filled out all the information, both parties must check the form and sign and date it. Most states don’t require you to notarize your Bill of Sale to make it valid.
To complete the sale, the seller collects payment and hands over the certificate of title (if applicable). If you’ve bought a vehicle, you’ll need to register it at the Department of Motor Vehicles (DMV) and pay sales tax.
Key Terms
Whether you’re buying or selling an item, knowing the following legal terms is essential to fill out your Bill of Sale form correctly.
- Buyer — The person purchasing the item, also known as the purchaser.
- Seller — The person (or party) that is selling the item.
- As-is — “As-is” means that the item is sold in its current condition at the time of sale and that the buyer accepts any present faults.
- Warranty Provision — A written guarantee that the seller will repair or replace the item if there are any defects over a specified period. If you don’t include a warranty provision in your Bill of Sale, the item is sold “as-is.”
- Certificate of Title — Separate paperwork that states an item’s legal owner. If applicable, this should be transferred when completing the sale. Note that a Bill of Sale proves the transaction took place, but it’s not always proof of ownership.
- Sales Tax — A tax the government imposes on the sale of goods. This tax varies by state, and a Bill of Sale helps determine how much you need to pay.
- Notarization — A process that authenticates a legal document and the parties’ signatures. Not all states require a Bill of Sale to be notarized.
- Notary Public — A state-appointed representative who notarizes documents.
- Promissory Note — A promissory note is a document that promises someone will pay an amount of money. You should include one with your Bill of Sale if the transfer requires the buyer to take out a loan instead of paying in full.
- Odometer Reading — A section of a Vehicle Bill of Sale where you record the vehicle’s mileage at the time of sale.
- Vehicle Identification Number (VIN) — A unique identification code for a motor vehicle must be included in a Vehicle Bill of Sale.
