General Bill of Sale
A private party can contract to sell a certain piece of property to another private party. It is important, however, that for sales involving any substantial amount of money that a written contract known as a bill of sale be executed. Most of the time this can be done with preprinted forms.
How to Write a General Bill of Sale
The first step in writing a general bill of sale is to find a preprinted template that contains all of the elements required by state law. While the exact requirements for a bill of sale may vary from state to state, most states require that the following be included in the written contract:
- Name of the Buyer;
- Name of the Seller;
- Location of the Sale: including the county and state where the sale occurred;
- The Consideration: or amount of money for which the property is being sold;
- A Description of the Property: this should be as exact as possible so that there is no dispute about what property is being sold;
- A Covenant of Title: or warranty that the seller has the legal authority to sell the property.
- The Date of the Transaction;
- The Signatures of the Buyer and Seller: which must be witnessed in some states; and
- The Signature of the Notary Public or other agent who is authorized by state law to witness signatures.
A Bill of Sale that contains all of the required information and is properly executed legally transfers the title of the property from the seller to the buyer who becomes its rightful owner. The seller ceases to have any rights to the property immediately upon execution of the bill of sale.
Absolute and Conditional Bills of Sale
Bills of sale generally take two forms. An absolute bill of sale is used when the buyer makes payment in full for the property and the property together with its title is transferred to the buyer. The seller retains no right to the property. A conditional bill of sale is used when the buyer makes a down payment and a schedule for future payments is established. The seller may transfer possession of the property to the buyer at the time that the initial payment is received but retain title to the property as collateral until payment is received in full from the buyer.
When is a Bill of Sale Necessary?
The majority of states do not require a bill of sale to transfer property and many people do not use a written bill of sale if they are transferring ownership of inexpensive property. For example, many people purchase furniture and other goods at yard sales or in response to classified advertisements and the seller does not require a bill of sale. However, for more expensive items such as cars, boats, trailers, jewelry and other expensive items, a written bill of sale is often executed to protect the interests of the seller and the buyer to the transaction.
Bills of sale can help protect buyers and sellers by formalizing their contract in writing. If you are considering selling or buying a substantial piece of property then you should consult an online bill of sale form before completing the transaction.
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