The bill of sale invoice is a document that includes a legal contract as well as an amount due by the buyer. The invoice is mainly used for vehicles but may be written for any property or good that is sold.
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A bill of sale is a document that is commonly used when transferring vehicles of transport (cars, boats, motorcycles, trailers) from one party to another. The document does not transfer title but rather shows proof that a transaction took place. By law, some states require the document to be signed and notarized. It’s all the little things that need to happen after a vehicle sells is what makes the bill of sale so helpful to have. Not only does it show a legal transaction but it helps the new owner obtain registration. The document allows third parties to see that the new owner is in fact the owner of the vehicle.
The following basic information is required in a bill of sale when transferring ownership of a vehicle:
- Odometer reading
- Vehicle Identification Number (VIN)
- Attach the Title and Registration
- Names, addresses, and signatures of the buyer and seller
The following information should be included when buying or selling a boat (watercraft):
- Make and Year of the Vessel
- Make and Year of the Boat’s Engine
- Registration/Hull ID Number
- Signature of Buyer and Seller
- Date Signed
Once both parties come to terms with a deal and are ready to make a transaction, a bill of sale should be brought into the occasion. The buyer is is the one who should be requesting a bill of sale, therefore all the information pertaining to the transaction should be handed over so that the bill of sale can be filled out.
Location of Sale
It’s important to cater the bill of sale to the state in which the item is being bought/sold. Because each state has their own laws regarding the use of a bill of sale in a transaction, the location (county, city and state) should be stated. Sales tax should not be included in the sale as it will be paid by the buyer when they register the vehicle in their state.
The legal names and mailing addresses of the buyer and seller should be clearly stated in the bill of sale. This is to help ensure that both parties are who they say they are and it also creates a point on contact if problems are to arise in the future.
Any legal descriptions of the item being sold must be entered into the bill of sale (Make, Model, Color, Year). ID, VIN, registration and all identifying descriptions need to be inscribed as well.
Finally, once all the information is entered into the bill of sale, all that is left is the transfer of money and signatures to finalize the sale. A vehicle can transfer via a cash payment, a trade-in, or by an act of giving (gift) – whichever method is used should be stated in the bill of sale.