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Bill of Sale: What Is It?

A bill of sale is a written document that is used to verify the ownership change of a piece of property of some kind, most commonly a car or boat, from one person to another. When it comes to the sale of a motor vehicle, boat, or other vehicle that must be registered through your state, the purchaser should have the bill of sale on hand when they are registering the vehicle in their name.

A bill of sale isn’t just used by the purchaser to prove that they now own the property in question. It can also be used by the seller. For instance, if someone sells a car to another person, the seller may automatically assume that the buyer took the steps necessary to change the vehicle ownership over through the state. If the seller is notified that there are outstanding parking tickets related to that vehicle after the car was no longer in their possession, they would be able to use a copy of the bill of sale to show that the vehicle isn’t under their control and the information of the person who purchased the vehicle.

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Contents of A Bill of Sale

When using a bill of sale for a vehicle of some kind or a boat, there are certain things that the document should include:

  • The date of the sale
  • The amount paid
  • The year, make, and model of the vehicle being sold
  • The name and address of the seller
  • The name and address of the buyer
  • Any other requirements according to your state
  • The date and signatures of both the buyer and the seller

A bill of sale is also commonly used when a firearm is sold. Although the firearm may not undergo a registration process with the state, a bill of sale is still important because it acts as a chain of custody for the weapon. When a firearm is sold, the bill of sale should include information about the type of gun that it is along with the serial number. The bill of sale should also include the date the sale occurred, the price paid, and the names and contact information of both the buyer and the seller. It should also be signed and dated by the buyer and seller.

Because a bill of sale documents the ownership change of a piece of property, it is important to note that it could be state specific. This means that depending on what the bill of sale is used for, there may be specific things that must be included in the bill of sale according to your state. Since a bill of sale is generally used for a motor vehicle, you can verify if a bill of sale has everything it needs by visiting with the state agency that registers vehicles or boats in your state. Many times, these agencies have websites that will address what should be included in a bill of sale in order to be legally binding.

Regardless of whether you are the buyer or the seller, you should keep copies of the bill of sale. Often, a copy of the bill of sale is needed when a buyer wants to register the property in their name. The state agency usually keeps that copy. So, it’s important for the buyer to have more than one copy at least until they get their documents back from the state. For sellers, they should hold on to the bill of sale for several years for documentation purposes.