Bill of Sale

What is a bill of sale?

A bill of sale is a legally binding document that’s used during the sale and purchase of property or goods, both on a commercial level and for personal property. The bill of sale provides the following:

An outline of the terms of the sale
A detailed description of the property or goods sold
The price paid by the buyer
The location of the transaction (if applicable)
The date of the transaction
The signatures of both the buyer and the seller

There are two main types of bills of sale: absolute and conditional. An absolute bill of sale is used when property is transferred to a new owner without any condition, like a mortgage or a personal loan. The buyer receives full ownership after paying the seller and signing the necessary documents.

A conditional bill of sale is used when property is transferred to the buyer without granting the buyer full ownership interest in the property immediately. These bills are used when the buyer finances the purchase with a loan and explain what happens if the buyer fails to make payments on time.

A bill of sale should accompany other documents associated with the sale, including quitclaim deeds, property deeds, offer agreements, contracts, and other legally binding documents.

Bill of sale FAQs

Is a bill of sale as good as a title?

No. The bill of sale acts as a receipt for the purchase of certain property. A title is a legal verification of the buyer’s ownership of the property. Both are beneficial to the buyer, but the title is what documents the sale and change of ownership with government organizations.

Is a handwritten bill of sale legally binding?

Yes. However, it must have all the necessary information documenting the details of the sale. If it’s missing key information like property descriptions and signatures, the bill of sale may not be legally valid.

Who drafts the bill of sale?

Typically, the seller is responsible for creating the bill of sale for the item they’re selling. While these documents aren’t required in every state for every transaction, it’s a good idea to draw one up before finalizing the purchase with the buyer. If you’re selling a property, it’s a good idea to get help with the property deed transfer and drafting the bill of sale to make sure everything is legally binding.

What types of property need a bill of sale?

You can create a bill of sale for any sale you make. However, there are some types of property that can benefit more from a bill of sale than others. This includes the following:

Boats
ATVs and off-road vehicles
Motor vehicles like cars, trucks, and SUVs
Real estate
High-value collectibles
Business assets
Livestock