How Do You Prepare a Bill of Sale?

A bill of sale is a document proving the transfer of property from one party to another. This document can be used to record a sale between two individuals as well as, in some countries, the sale of goods by a business to an individual.

Preparing a bill of sale

Preparing a bill of sale starts with identifying what needs to be included. Next, prepare a draft version of the bill of sale on paper.  Finally, the bill of sale needs to be notarized and filed with your county clerk’s office or local courthouse, depending on where it is used.

This guide will cover the steps outlined above in more detail to help you understand how to prepare a bill of sale.

Identify what needs to be included

A bill of sale typically includes at least the date of sale, the price or method of reimbursement, what was sold (property description), who bought the property, and both parties signatures.

A bill of sale is typically two pages or less when prepared for an individual. Large businesses, however, may need 20+ pages to explain what is being transferred and why. Details that can be included in a bill of sale include a detailed description of the property being sold, including serial numbers or model numbers if applicable; color(s); condition; any additional features or attachments; etc.

If you are selling used appliances with cords, be sure to indicate the condition of those cords or if they are damaged or frayed. If you are selling a piece of real estate, including the specific address.

Prepare a draft version

This is where you provide full details on what needs to be included in the bill of sale. It’s important that both parties are clear on what they’re signing, especially if this will serve as legal documentation for future transactions or disagreements.

The draft version of the bill of sale needs to be written down on paper and include all relevant details such as, how much was paid and what was sold. The process for this part can be started by organizing into an outline format with a clear introduction and conclusion.

While it may seem like common sense, many people forget important things when preparing a bill of sale, such as including damages or other information that might affect the buyer’s evaluation of your product or service. For example, if your property has visible wear and tear but is structurally sound, consider listing both in the document, so there is no confusion later about its condition.

The state where you live may have specific laws regarding items such as vehicles. These details will need to appear in your bill of sale, so there isn’t any confusion later on when transferring your property from you to another party.

Notarized and filed

A notary proves the authenticity of your signature on your document. Legally speaking, documents filed with your local courthouse prove official records of bureaucratic functions.

The type of governing agency (e.g., department of motor vehicles, state regulators) that has jurisdiction over your transaction varies by location. Your county clerk’s office or local courthouse can help explain if you have questions or concerns.

In order to have the bill of sale on file, it needs to be submitted to the proper authority or agency that keeps tabs on these documents. Some states may not require filings, while some others will. As mentioned above, you’ll typically file your notary with a government agency like the DMV if you are required to file.

It is important to start the bill of sale process before starting your transaction to avoid confusion later on when it comes time to complete the transfer of property.

However, preparing a bill of sale is not too difficult. It’s just about knowing what to include and how it should be filed for future reference if anything goes wrong.


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