If you buy or sell personal property in a third-party transaction (such as via a newspaper or online ad), it's a good idea to get a bill of sale to record the transaction. A bill of sale is a legal document that protects both the buyer and seller by giving them proof that the transaction took place. The seller usually provides the bill of sale, but the buyer can (and should) provide one if the seller does not.
An Important Document
A bill of sale documents a transaction between a buyer and seller. It is most commonly used for the sale of motor vehicles, such as cars, boats and motorcycles, but can be used in any type of non-property sales transaction. The DMV and most lenders require a bill of sale before they will transfer title to the motor vehicle or issue a loan for its purchase.
A bill of sale is not required when selling other personal property, like a computer or television, but some buyers and sellers still use one to have a record of sale.
Download either of the sample bill of sale templates and use them as guides to create a personalized document. If you need help downloading the printables, check out these helpful tips.
Vehicle Bill of Sale
It is important to point out that a bill of sale does not legally transfer title of the motor vehicle from seller to buyer. While a bill of sale is often required by the DMV and lender, title to the vehicle is only transferred when the seller delivers the completed title transfer form, which is found on the vehicle's title, to the buyer. A bill of sale alone is never sufficient to legally transfer title.
Not all states require a bill of sale to transfer title to a motor vehicle. Other states do. A state, or even the financial institution underwriting the buyer's loan (if there is one), may also require that the bill of sale be notarized.
Motor vehicle bills of sale should include the following:
- Buyer and seller name and address
- Description of the vehicle, including year, make and model
- Vehicle identification number (VIN)
- Odometer reading
- Purchase price
- Seller's signature
If the sale is of a boat or trailer, you should also include the serial number, registration number and length of the boat or trailer.
Personal Property Bill of Sale
Bills of sale aren't required for the sale of other personal property, but many people like to have an official record of the transaction for big-ticket items such as computers or televisions. Because they are not legal required there are no specific requirements regarding what information should be included.
Generally, a bill of sale for non-motor vehicle personal property should include:
- Buyer and seller name and address
- Description of the property, including year, make and model
- Serial number
- Purchase price
- Seller's signature
- Any other identifying information
Before completing the bill of sale template, make sure to check your state's specific requirements to make sure your state doesn't require additional information.
Protection for Buyer and Seller
The bill of sale not only serves as a record of the sales transaction, but it provides both the buyer and seller protection in case an error occurred in the title transfer. For example, if the buyer accumulates unpaid parking tickets, the seller can use the bill of sale as proof that he did not own the vehicle on the date the tickets were issued and thus is not responsible for payment. Or if the vehicle is subject to a recall, the buyer can use the bill of sale as proof that he owns the vehicle and is entitled to any benefits.
Additionally, if any disagreements arise following the sale, each party has written proof of the transaction that can be used in court.
