When buying something new, the establishment from which you are buying that item will lay out the process for you. The salesperson tells you a price, you hand over that amount, a signature might be involved - you know the drill.
When buying something used, however, the seller might lack a defined process. This isn’t necessarily a bad thing if two people can peacefully exchange money for an asset. However, if a conflict arises, things can get complicated.
When products are being exchanged between the two parties, it is safest to have a bill of sale drawn up so this doesn’t happen.
|Want to skip ahead to the free template? Click here.|
A bill of sale is a legal document that records the transfer of an asset from one party to another in exchange for money. Typically, bills of sale are used to document the transaction of cars, motorcycles, or boats, but they can also be used to record other proceedings as well.
In the buying process, the bill of sale is written up by the seller. The document will protect both the buyer and the seller should they come across a conflict during the transaction.
If your state does not provide a bill of sale form, yes, you can handwrite one yourself. As long as the document includes all of the necessary parts of a bill of sale and is signed by both parties and a notary, it is valid.
Some states require a bill of sale while others don’t. If you live in a state where no bill of sale is provided but it is required, make sure you include all of the necessary information when writing your own.
Each state might have some different requirements, but a bill of sale will typically include the following:
|1. The date of the sale|
|2. The names and addresses of the buyer and seller|
|3. A description of the asset being transferred|
|4. The amount being paid for the asset|
|5. A guarantee that the asset is free from all claims and offsets|
|6. Any warranty information|
|7. Signatures of the buyer, seller, and a notary|
To make your life easier, we put together a bill of sale template. All you need to do is print it and fill it out!
As stated above, different states might require certain parts while others might not. Make sure to check the standards in your state to make sure the bill of sale you are drawing up is valid.
Bills of sale can be straightforward, but it’s important to make sure you have a good grasp on the terms in the document before signing.
Buyer: The person in the transaction that is paying the seller in exchange for an asset.
Seller: The person in the transaction that is offering an asset for purchase.
Notary: A person authorized to perform certain acts in legal affairs, which in this case, would be the signing of a document. Once the notary has signed the document, it is legitimate.
Gift: When an asset is given to someone without compensation, that asset is considered a gift.
As-Is: A section of the bill of sale that states the asset is being purchased in its current condition. By signing the bill of sale, the buyer is accepting the asset in its current state.
Payment: Money from the buyer to the seller in exchange for an asset.
Vehicle identification number (VIN): The serial number of a vehicle. This is important to know because bills of sale are often used in used car transactions. If the VIN is not included, the bill of sale is not valid.
Anytime legal documents and contracts are involved, it is best to be extra careful. Have bill of sale questions? Don’t worry, we have answers.
There are multiple other names for a bill of sale. Here are the more popular ones you might run into:
|Proof of Purchase||Proof of Payment||As Is Bill of Sale|
|Sales Slip||Sales Receipt||Sales Stub|
The primary purpose of a bill of sale is to confirm the transfer of ownership of an asset from a seller to a buyer. They also protect the buyer and the seller in the transaction. In these private buying scenarios, it can be hard to prove that a transaction even took place. The bill of sale confirms that a product was received and paid for.
Also, there are some states where it is illegal to not use a bill of sale when selling something privately.
Bills of sale are typically used for bigger transactions. Here are a few of the most common assets that a bill of sale should be used while transferring:
If you are worried about disputes during your transaction, the bill of sale is here to save the day. One of the purposes of a bill of sale is to prevent the buyer and seller from falling into conflict after the transaction. To best protect yourself, make the bill of sale as detailed as possible.
Selling big ticket items privately is a great way to make some money while also getting rid of something you no longer have a use for. It is important to make this sale as seamless for both parties as possible, and while drawing up or filling out a bill of sale is an extra step, it is worth validating your transaction.
Mary Clare Novak is a Content Marketing Specialist at G2 in Chicago, where she is currently exploring topics related to sales and customer relationship management. In her free time, you can find her doing a crossword puzzle, listening to cover bands, or eating fish tacos. (she/her/hers)
Subscribe to keep your fingers on the tech pulse.