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Your bill of sale will serve to memorialize the important details of your transaction and acts as a receipt for the buyer. It is an essential tool for proving the terms of the agreement down the road, and many states require the use of a bill of sale when transferring automobiles, aircraft, watercraft, and similar items.

Property Type

To complete your bill of sale, start by specifying what kind of property is being sold. You will need to use multiple bills of sale if you want to transfer multiple types of property. When describing the property, include as many identifying details about the property as possible.

Buyer and Seller Information

Next you will need to add the names and addresses of the buyer and seller. If the buyer and/or seller is acting under a business entity, then use their respective business addresses here.

Cost and Other Terms of the Deal

You will then need to add any other important terms of the transaction, such as the price and whether there are any encumbrances on the property being sold. An "encumbrance" is a lien, loan, or other restriction on an owner's title. Common examples include collateral for a loan, mechanic's liens, legal judgments, tax liens, and other government liens.

Witnessing Your Document

By law, a notary public must witness both parties signing the document in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. However, it is recommended that you use a notary to witness the document regardless of the state you are in. This will help prove the authenticity of the document if there is ever a dispute in the future. If the buyer and seller are in different locations and want to have the document notarized, they will each need to get it notarized separately. Your bill of sale will be considered fully executed once it is completed, signed, and notarized (if included). Then make sure that both parties get a copy of the fully executed agreement.

Frequently Asked Questions

What is a bill of sale?

A bill of sale is a legal document that is used to certify the transfer of legal title to a new owner. As such, it acts as a receipt for both the buyer and seller and can sometimes also be used as proof of ownership by the buyer.

In many states, a bill of sale is required to document the transfer of a motor vehicle between parties. It is also commonly used in sales of equipment, animals, watercraft, and aircraft, as well as other large, expensive, or rare items.

When should I use a bill of sale?

Buyers and sellers can use a bill of sale to memorialize any sales transaction besides the purchase of real estate. These documents are frequently used when transferring title to motor vehicles, including all types of cars, trucks, recreational vehicles, motorcycles, boats, and airplanes.

While they are common for motor vehicles, bills of sale can also be used to document sales of other types of personal property such as furniture, machinery, jewelry, animals, exercise equipment, clothing, bicycles, appliances, tools, and more.

Who can use a bill of sale?

A bill of sale is usually used by individuals or unincorporated businesses when selling tangible personal property.

Typically, a seller will create a bill of sale to prove that the item was sold and transferred on a certain date. Both the buyer and seller should keep copies of the signed bill of sale after the transaction, as proof of transfer for the seller or as proof of payment for the buyer.

Is a bill of sale the same as a sales contract?

A bill of sale differs from sales contracts (also known as purchase agreements and sale of goods agreements) in several meaningful ways.

Sales contracts spell out the details about sales transactions taking place in the future, including describing the item to be sold and specifying the date that ownership will transfer between the owners. They also specify payment terms and the logistical details about how shipping and delivery of the item will take place. In contrast, a bill of sale merely documents the transaction itself.

To learn more, read about the differences between a sales contract and a bill of sale.

What is included in a bill of sale?

A bill of sale should at a minimum include information identifying the parties to the transaction (the buyer and seller), the total purchase price, and a specific description of the item that was sold.

In the case of a motor vehicle, it is important that the bill of sale include specific identifying information such as the make, model, year, body type, and vehicle identification number (VIN number). When selling a boat or other watercraft, the bill of sale will include the hull identification number (HIL).

Bills of sale also typically include the following information:

  • 'As is' language, stating that the buyer agrees to accept the item in its current condition (whether the item is currently working as originally intended or not).
  • A statement that the seller has the legal authority to sell the item and that nobody else has a claim to the item.
  • A provision stating that the buyer has inspected, or had an opportunity to inspect, the item before the transaction.
  • Identification of the state whose laws govern the transaction.
  • Sales of motor vehicles should also include the odometer reading at the time of the transfer between parties. Bills of sale for motor vehicles should include an "Odometer Disclosure Statement." In this statement, the seller affirms that the odometer reading is accurate and was not altered while in the seller's possession or at his or her direction.
  • Signatures of both the buyer and seller of the item.

How do I create a bill of sale?

Creating a bill of sale is quick and easy with LegalNature. Before you begin, be prepared to describe the item being sold, the parties to the transaction, and the payment details for the sales transaction.

Does a bill of sale need to be witnessed and notarized?

Most states do not require a notary to witness the signing of a bill of sale. However, by law, a notary public must witness both parties signing the document in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. Notaries are optional in other states.

Still, it is recommended that you use a notary to witness the document regardless of your state. This will help prove the authenticity of the document if there is ever a dispute in the future. If the buyer and seller are in different locations and want to have the document notarized, they will each need to have it notarized separately.

Does a bill of sale include warranties?

While a bill of sale can include specific warranties, it usually does not include specific assurances or promises about the item being sold. Instead, a bill of sale typically includes an "as-is" provision. This is important because it limits the seller's future liability. The "as-is" language means that there is no warranty included and that the buyer agrees to accept the item in its current condition, whether or not faults are readily apparent.

A bill of sale may also include a statement that the seller warrants that there are no liens or other encumbrances on the property being sold and that the seller actually has proper title and the legal authority to enter into the sales transaction.

Are there limitations on when a bill of sale may be used?

A bill of sale can only be used to transfer personal property that the seller already owns and that is movable, such as motor vehicles, animals like horses or dogs, or household goods. A bill of sale cannot be used to transfer something that the seller does not own or that the seller does not have the legal right to transfer.

When selling real property (real estate), a bill of sale cannot be used. When real estate is transferred, the sale will typically be documented on a quit claim deed or a general warranty deed, although different types of deeds may be used in certain transactions.

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Checklist

Step 1: Gather Information

As you complete your bill of sale, you will need to provide certain relevant information. This includes the name and address of the buyer and seller, the price, and any identifying details for the property being sold. For example, if you are selling a car, you will need the make, model, year, body type, odometer, and vehicle identification number (VIN).

Step 2: Answer Key Questions

Use the information you collected to complete the bill of sale. We make this easy by guiding you each step of the way and helping you to customize your document to match your specific needs. The questions and information we present to you dynamically change depending on your answers and the state selected. Click below to get started.

Step 3: Review and Sign

It is always important to read your document thoroughly to ensure it matches your needs and is free of errors and omissions. After completing the questionnaire, you can make textual changes to your document by downloading it in Microsoft Word. If no changes are needed, you can simply download the PDF version and sign. These downloads are available by navigating to the Documents section of your account dashboard.

By law, a notary public must witness both parties signing the document in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. However, it is recommended that you use a notary to witness the document regardless of the state you are in. This will help prove the authenticity of the document if there is ever a dispute in the future. If the buyer and seller are in different locations and want to have the document notarized, they will each need to get it notarized separately. Your bill of sale will be considered fully executed once it is completed, signed, and notarized (if included).

When using a notary, be sure to wait to sign the document until they are present.

Step 4: Distribute and Store Copies

At a minimum, all parties that sign the document should receive a copy once it is fully executed (everyone has signed). Other interested parties may need or want copies as well. Be sure to store your copy in a safe location. It is a good idea to keep both a physical and electronic copy.

Step 5: Complete Related Documents

Completing a sale of goods agreement prior to delivery of the goods will help to fully protect both buyer and seller. A sale of goods agreement is used by individuals and businesses to record the important terms of a sales contract, including delivery and shipment details. It is a legally binding contract between the buyer and seller that will ensure each party holds up its end of the bargain. For instance, if the goods are delivered late or have other problems, the sale of goods agreement will make sure the buyer will be compensated for any losses. The parties will typically then sign a bill of sale to evidence the transfer of title at the time of delivery.