A bill of sale is a written record that you sold something to someone else, and it shows what was sold, who bought it, how much they paid, and when the sale happened.
A bill of sale is not legally required in every transaction, but it protects both the buyer and the seller by creating proof of the exchange. When you sell a car, boat, motorcycle, or other valuable item, a bill of sale documents that the previous owner no longer has a claim to it. For the buyer, it proves they own what they purchased. For the seller, it shows they transferred ownership and received payment.
The specific rules about when a bill of sale is required vary by state and by what you are selling. Some states require one for vehicle sales; others make it optional but strongly recommended. Some transactions—like selling personal household items—rarely involve a bill of sale at all, though one can still be useful if the item is expensive or the sale is disputed later.
Key Takeaways
- A bill of sale is a document signed by both the seller and buyer that records what was sold, the price, and the date of the transaction.
- State law determines whether a bill of sale is required for specific items like vehicles; check your state's motor vehicle department website to learn what applies to you.
- A bill of sale protects the seller by proving they no longer own the item and received payment, and protects the buyer by proving they own what they purchased.
- You can create a bill of sale using a template, and it does not need to be notarized in most cases, though some states or lenders may require notarization for certain sales.
What information goes into a bill of sale
A bill of sale typically includes the names and addresses of both the seller and the buyer, a clear description of what is being sold, the sale price, and the date of the sale. For a vehicle, the description includes the year, make, model, color, and vehicle identification number (VIN). For other items, you describe it in enough detail that someone reading the document later would know exactly what was sold.
The document should state whether the item is being sold "as is" (meaning the buyer accepts it in its current condition) or whether the seller is making any promises about its condition or function. Both the seller and buyer sign and date the bill of sale. Some versions include a line for the buyer to acknowledge they have inspected the item before purchase, and some include a statement that the seller has the legal right to sell it.
The bill of sale does not need to be notarized in most states, though some lenders or government agencies may require notarization for specific types of sales. A notarized version straightforward means a notary public has verified the identities of the people signing and watched them sign the document.
When a bill of sale is required by law
Vehicle sales are the most common situation where a bill of sale is legally required or strongly recommended. Most states require a bill of sale when you register a vehicle with the motor vehicle department, or they require it as part of the title transfer process. Some states make it optional but recommend it; others make it mandatory. Your state's motor vehicle department website lists the specific requirements for cars, motorcycles, boats, and trailers.
For other items—jewelry, electronics, furniture, tools, or collectibles—a bill of sale is rarely required by law. However, it is still useful if the item is expensive, if there is any chance of a dispute, or if the buyer needs proof of ownership for insurance or resale purposes. Some pawn shops and used goods dealers use bills of sale as standard practice, even when not required.
If you are selling something on behalf of an estate or as part of a court-ordered sale, the rules may be different. Check with the court, the estate attorney, or the relevant government agency to learn what documentation they need.
How to create a bill of sale
You can write a bill of sale by hand or type it, and you can create one from scratch or use a template. Many state motor vehicle departments provide free templates on their websites. You can also find templates through legal document websites, though some charge a fee. A handwritten bill of sale is legally valid as long as it includes all the necessary information and is signed by both parties.
The basic steps are: write down the seller's name and address, the buyer's name and address, a detailed description of what is being sold, the sale price, the date, and any conditions (such as "as is"). Both the seller and buyer read it, sign it, and each keep a copy. If notarization is required or requested, take the signed document to a notary public, who will verify identities and add their seal.
Some transactions—particularly vehicle sales—may also require a title transfer form or odometer disclosure form, which is separate from the bill of sale. Check your state's motor vehicle department to learn what forms you need for the specific type of sale.
The difference between a bill of sale and a title
A bill of sale and a title are two different documents that serve different purposes. A title is an official government document that proves legal ownership of a vehicle or, in some cases, real property. It is issued by the state motor vehicle department or the county recorder's office. A bill of sale is a private record between the buyer and seller that documents the transaction itself.
For vehicles, you typically need both. The bill of sale shows that the sale happened and records the terms; the title transfer shows that ownership has been legally transferred to the new owner. The title is what you present to prove you own the vehicle. When you sell a vehicle, you sign the back of the title (or complete a title transfer form) and give it to the buyer, who then registers it in their name with the motor vehicle department.
For items other than vehicles, there is usually no government-issued title. A bill of sale is the main document that proves the sale took place and that ownership has changed hands.
What happens if you do not have a bill of sale
If you sell something without a bill of sale and a dispute arises later, you have no written proof of the sale, the price, or the condition of the item. The buyer might claim they never received what they paid for, or the seller might claim they were never paid. Without documentation, it becomes a "he said, she said" situation that is difficult to resolve.
For vehicle sales, not having a bill of sale can create problems with registration and title transfer. The motor vehicle department may refuse to process the transfer without one, or it may delay the process. If the vehicle is later involved in an accident or crime, and there is no clear record of who owned it and when, both the previous and current owner could face liability issues.
For expensive items, the lack of a bill of sale can also affect insurance claims or resale. If you try to insure something you bought and cannot prove you own it, the insurance company may deny coverage. If you try to resell it, the buyer may be hesitant without proof of your ownership.
Notarization and when it matters
Notarization is not required for most bills of sale, but some situations call for it. If you are selling a vehicle and your state requires a notarized bill of sale, you must have a notary public witness the signing. Some lenders also require notarization if the buyer is financing the purchase. If you are selling something as part of an estate or a legal settlement, the court or attorney may require notarization.
To get a bill of sale notarized, both the seller and buyer must go to a notary public together with the signed document. The notary verifies that you are who you say you are (usually by checking a government-issued ID), watches you sign, and then adds their official seal and signature. Notary services are available at banks, law offices, UPS stores, and other locations. The cost is usually between five and twenty dollars.
Frequently Asked Questions
Do I need a bill of sale if I am selling a used car?
Most states require a bill of sale for vehicle sales or make it part of the title transfer process. Check your state's motor vehicle department website to learn the specific requirement. Even if it is not required, having one protects both you and the buyer by documenting the sale and the price.
Can I use a bill of sale template I find online?
Yes. Many state motor vehicle departments provide free templates on their websites. You can also find templates through legal document sites. Make sure the template matches your state's requirements, especially if you are selling a vehicle. A handwritten bill of sale is also legally valid as long as it includes all necessary information and is signed by both parties.
What if the buyer and I disagree on the price after we sign the bill of sale?
Once both parties have signed a bill of sale stating the price, that price is the documented agreement. If a dispute arises, the bill of sale is the evidence of what was agreed to. This is one reason it is important to make sure the price is correct before signing.
Does a bill of sale need to be notarized?
Notarization is not required for most bills of sale, but some states require it for vehicle sales, and some lenders require it if the buyer is financing the purchase. Check your state's motor vehicle department or ask your lender whether notarization is needed for your specific transaction.
Can I sell something without telling the buyer I still owe money on it?
No. If there is a lien on the item (meaning a lender has a claim to it until you pay off a loan), you must disclose that to the buyer. The buyer needs to know they cannot take full ownership until the lien is paid off. Some bills of sale include a line to note whether there are any liens on the item.