What Is a Bill of Sale? A Complete Guide

A bill of sale is a legal document that records the transfer of ownership of property from a seller to a buyer. It serves as a written receipt and proof that the transaction occurred, documenting the sale price, the description of the item sold, and the identities of both parties. Bills of sale are most commonly used for vehicle sales, but they apply to any personal property transaction — boats, equipment, livestock, electronics, furniture, and other tangible property. Whether you are selling a used car privately or purchasing heavy machinery for your business, a bill of sale protects both parties by creating a clear, dated record of the ownership change. This guide explains everything you need to know about bills of sale — what they include, when they are required, and how they differ from titles.

What Is a Bill of Sale?

A bill of sale is a document that confirms the transfer of ownership from one party to another in exchange for payment or other consideration. It is essentially a receipt with legal weight — it proves that a transaction took place, identifies what was sold, and records the terms of the sale.

Bills of sale have been used for centuries as the standard method of documenting property transactions. Under the Uniform Commercial Code (UCC), which governs commercial transactions in all 50 states, a bill of sale is a basic form of documenting the sale of goods. While the UCC does not mandate a bill of sale for every transaction, it provides the legal framework that gives these documents their enforceability.

There are two main types of bills of sale:

• Absolute bill of sale: This transfers ownership unconditionally and permanently. Once signed, the seller gives up all rights to the property. Most private sales use an absolute bill of sale — the buyer pays, the seller transfers ownership, and the transaction is complete.
• Conditional bill of sale: This transfers ownership subject to conditions — typically that the buyer completes all payments. If the buyer defaults on payment, ownership reverts to the seller. Conditional bills of sale function similarly to secured transactions and are used in installment sales or seller-financed purchases.

A bill of sale typically includes a warranty of title statement — where the seller affirms they legally own the property and have the right to sell it — or an as-is condition statement, where the seller makes no guarantees about the item's condition or their ownership. The type of warranty affects the buyer's legal remedies if problems arise after the sale. If you need a bill of sale for an upcoming transaction, Legal Tank's bill of sale generator creates a customized document covering all essential terms in minutes.

Do I Need a Bill of Sale to Sell a Car?

In most states, yes — you need a bill of sale to complete a private vehicle sale. The DMV in the majority of states requires a bill of sale as part of the vehicle registration and title transfer process.

A vehicle bill of sale serves several critical functions in a car sale. It records the sale price, which determines the sales tax the buyer must pay when registering the vehicle. It documents the date of sale, which establishes when the seller's liability for the vehicle ends. It identifies both parties, creating a clear record of who sold the car and who bought it. And it captures vehicle-specific information — the VIN (vehicle identification number), year, make, model, color, mileage, and condition — that ties the transaction to a specific vehicle.

Most states also require an odometer disclosure statement as part of the vehicle bill of sale. Federal law (the Motor Vehicle Information and Cost Savings Act) requires sellers to provide the buyer with an accurate odometer reading at the time of sale for vehicles less than 25 years old. Some states include the odometer disclosure on the bill of sale form itself, while others require a separate federal odometer disclosure statement.

Even in states that do not explicitly require a bill of sale for vehicle registration, creating one protects both parties. Without a bill of sale, the seller cannot prove they sold the vehicle — meaning they could remain liable for parking tickets, tolls, accidents, and other liabilities associated with the car after the sale. The buyer cannot prove the purchase price — which may result in the DMV assessing sales tax based on the vehicle's full market value rather than the actual price paid. A bill of sale eliminates these risks by creating a clear record both parties can reference.

For a deeper understanding of how property transfer documents work, our guide on quitclaim deeds and property transfers covers similar concepts in the real estate context — showing how different documents serve different transfer purposes.

Is a Bill of Sale the Same as a Title?

No. A bill of sale and a certificate of title are two different documents that serve different legal functions. Understanding the distinction is critical, especially for vehicle transactions.

A title (also called a certificate of title) is a government-issued document that proves legal ownership of a vehicle. It is issued by the state DMV and contains the vehicle's VIN, the registered owner's name, any lienholders (such as a bank that financed the purchase), and the title's status (clean, salvage, rebuilt, flood, etc.). The title is the definitive proof of who owns a vehicle at any given time.

A bill of sale, by contrast, records a specific transaction — the sale of the vehicle from one person to another. It documents the sale price, the date, and the parties involved. A bill of sale proves that a sale occurred, but it does not by itself prove current ownership. The title does that.

Here is how the two documents work together in a typical vehicle sale:

• The seller signs the back of the title, endorsing it over to the buyer. This is the formal transfer of legal ownership.
• The seller and buyer both sign a bill of sale recording the transaction details — price, date, vehicle description, and condition.
• The buyer takes the signed title and the bill of sale to the DMV, where they apply for a new title in their name and register the vehicle.
• The DMV uses the bill of sale to calculate sales tax based on the purchase price and to verify the transaction details.

You cannot register a vehicle with only a bill of sale in most states — the title is required. Conversely, having the title without a bill of sale can create complications. The bill of sale documents the transaction that explains why the title is changing hands. Both documents work together to create a complete record of the ownership transfer. You can download a free bill of sale template from Legal Tank to see the standard format and required fields before creating your own.

What Should a Bill of Sale Include?

A complete bill of sale should include all information necessary to identify the parties, describe the property, and document the terms of the sale. While requirements vary by state, these are the essential elements every bill of sale should contain.

• Date of sale: The specific date the transaction takes place. This establishes when liability transfers from seller to buyer and starts any applicable warranty periods.
• Buyer identification: Full legal name, address, and contact information of the buyer.
• Seller identification: Full legal name, address, and contact information of the seller.
• Description of the property: A detailed description of the item being sold. For vehicles, this includes the year, make, model, body style, color, VIN, license plate number, and current mileage. For other personal property, the description should be specific enough to uniquely identify the item — brand, model number, serial number, size, condition, and any distinguishing characteristics.
• Sale price: The total amount the buyer is paying, stated in both numbers and words to prevent disputes. If the transfer is a gift, the bill of sale should state that the consideration is "$0" or "gift" and note the item's fair market value for tax purposes.
• Payment method: How the buyer is paying — cash, check, bank transfer, or installment payments. If the payment is in installments, the bill of sale should reference the payment schedule or a separate promissory note template outlining the terms.
• Condition of property: Whether the item is being sold "as-is" with no warranties, or whether the seller provides any warranty of condition. Most private sales are as-is transactions, meaning the buyer accepts the item in its current state with no guarantee from the seller.
• Warranty of title: A statement from the seller affirming they are the legal owner, the property is free of liens and encumbrances, and they have the legal right to sell it.
• Signatures: Both buyer and seller must sign the bill of sale. Some states require a witness or notary acknowledgment as well.

For vehicle sales specifically, you should also include the odometer reading and disclosure statement, the title number, any existing liens, and whether the vehicle has a salvage or rebuilt title. These details protect the buyer from undisclosed problems and satisfy DMV requirements for registration and title transfer.

Does a Bill of Sale Need to Be Notarized?

In most states, a bill of sale does not need to be notarized to be legally valid. A bill of sale is effective once both parties sign it — notarization is optional in the majority of jurisdictions.

However, several states do require notarization for vehicle bills of sale. Louisiana, Maryland, Montana, Nebraska, New Hampshire, and West Virginia all require notarized bills of sale for vehicle transactions. In these states, the DMV will not accept an un-notarized bill of sale for title transfer and registration purposes. Some counties within other states have additional notarization requirements, so checking with your local DMV before completing the sale is advisable.

Even in states where notarization is not required, there are good reasons to have the bill of sale notarized:

• Prevents disputes about authenticity: A notarized document carries a presumption of authenticity. If a dispute arises about whether a party actually signed the bill of sale, notarization provides independent verification from a disinterested third party.
• Strengthens evidence in court: If you ever need to prove the transaction occurred — for example, if the seller claims they never sold the item or the buyer disputes the price — a notarized bill of sale is stronger evidence than an un-notarized one.
• Some DMVs prefer it: Even in states that do not require notarization, DMV clerks sometimes request or prefer notarized bills of sale, particularly for high-value vehicle transactions.
• Required for certain property types: Some states require notarized bills of sale for boats, aircraft, firearms, or other specific property categories, even if they do not require notarization for general personal property sales.

Notarization typically costs between $5 and $25 per signature and can be done at banks, UPS stores, law offices, or through mobile notary services. Given the low cost and the added legal protection, having a bill of sale notarized is generally worth the minimal expense. If you are concerned about protecting yourself in a sale, understanding liability waivers and your legal rights explains how legal documents affect your ability to seek recourse after a transaction.

Is a Handwritten Bill of Sale Legal?

Yes. A handwritten bill of sale is legally valid in all 50 states, provided it contains all required information and is signed by both parties. There is no legal requirement for a bill of sale to be typed, printed, or generated by a computer.

The UCC does not distinguish between handwritten and printed documents when it comes to contracts for the sale of goods. What matters is the content — whether the document identifies the parties, describes the property, states the price, and bears the signatures of both buyer and seller. A handwritten bill of sale that includes all essential elements is just as enforceable as a professionally printed one.

That said, there are practical reasons to use a typed or printed bill of sale when possible:

• Legibility: Handwriting can be difficult to read, which can create disputes about what the document actually says. If a court cannot determine the sale price, property description, or other terms from illegible handwriting, the bill of sale becomes less useful as evidence.
• Completeness: Typed templates and generators include prompts for every required field, reducing the risk of accidentally omitting critical information. Handwritten bills of sale commonly miss odometer disclosures, warranty of title statements, or as-is designations.
• DMV acceptance: While DMVs legally must accept handwritten bills of sale, clerks may scrutinize them more carefully or request clarification on illegible entries. A clean, typed document reduces processing delays.
• Professionalism: For high-value transactions, a professionally formatted bill of sale reflects the seriousness of the agreement and may provide greater comfort to both parties.

If you are in a situation where you need to complete a transaction immediately and do not have access to a printed form, a handwritten bill of sale on any piece of paper is legally sufficient. Write clearly, include all essential information (date, parties, property description, price, condition, and signatures), and both parties should keep a copy. For a more polished approach, Legal Tank's bill of sale generator produces a complete, state-compliant document that you can access from any device. If you are also creating other common legal documents for a transaction, our guide on writing lease agreements provides a similar walkthrough for another frequently used legal document.

Frequently Asked Questions About Bills of Sale

Who Keeps the Original Bill of Sale?

Both parties should keep a copy of the signed bill of sale. The buyer needs the original or a copy to register the vehicle or prove ownership of the purchased property. The seller needs a copy to prove they sold the item and are no longer responsible for it. The best practice is to create two original copies — both signed by both parties — so each party has a fully executed original. Alternatively, one party keeps the original and the other keeps a photocopy or digital scan. For vehicle sales, the buyer typically needs the original for DMV submission, so the seller should make a copy before handing it over.

Can I Write My Own Bill of Sale?

Yes. There is no legal requirement to use a lawyer, notary, or pre-printed form to create a bill of sale. You can write your own bill of sale on a blank piece of paper, use a downloaded template, or use an online generator. The document is legally valid as long as it identifies the buyer and seller, describes the property being sold, states the sale price, and is signed by both parties. For vehicle sales, you should also include the VIN, odometer reading, and whether the vehicle is sold as-is or with a warranty. Using a bill of sale template ensures you do not miss any required fields.

Does a Bill of Sale Prove Ownership?

A bill of sale proves that a sale transaction occurred, but it does not independently prove current ownership. For vehicles, the certificate of title is the definitive proof of ownership — a bill of sale supplements the title by documenting the transaction that transferred ownership. For personal property that does not have a title system (furniture, equipment, electronics, etc.), a bill of sale is often the strongest available proof of ownership, since there is no government-issued ownership certificate. In these cases, a bill of sale combined with proof of payment (such as a bank statement or canceled check) creates strong evidence of ownership.

Is a Bill of Sale Required by Law?

Requirements vary by state and the type of property being sold. Most states require a bill of sale for vehicle transactions as part of the DMV title transfer and registration process. Some states require bills of sale for boat sales, firearm transfers, and other specific property categories. For general personal property sales (furniture, electronics, equipment), a bill of sale is typically not legally required — but it is always recommended. Without a written record, either party may dispute the terms of the sale, the price paid, or even whether the sale occurred at all. A bill of sale costs nothing to create and provides invaluable legal protection for both the buyer and seller.