We often hear of the term “Bill of Sale” but do you ever wonder: why it is important to request one as a buyer or issue one as a seller to avoid future disputes? Well, this document is issued when a property or item of value is transferred from one person to another, and it states certain information regarding the item in question.
But do you need a Bill of Sale if you wish to sell a house or other real estate? Let’s find out.
A Bill of Sale is a document used to reduce financial risks, especially those associated with the fraud. Many buyers will demand this document to protect future disputes regarding ownership. It ensures that the sale is fair and legal and that both parties accept the terms and conditions. In many states and provinces, a Bill of Sale is a priority for car ownership transfers. But what about real estate sales?
Real Estate Bill Of Sale
Real estate sales also require a Bill of Sale in some states, but they go by a different name in some places. They are called a House Sale Contract or a House Bill of Sale. This document is not a legal document but merely a form that can be used as a testament to prove that the house or property has changed ownership from the old owner to the owner. In some cases, the Bill of Sale can be a receipt confirming the transfer of ownership.
Once it is signed by both parties, it is considered a binding contract to prove that the new owner paid the full price for it. A Bill of Sale is permissible in court during a dispute.
Components Of A Bill of Sale
Now that you know that a Bill of Sale is required to sell your house to a buyer, you will have to draw one up to show all relevant information. Contrary to what you may think, there is no legal template for a Bill of Sale. So to use one, you will have to prepare one yourself as the seller. It is similar to a Sales And Purchases Agreement but solely designed for real estate ownership transfers.
The document will reflect the type of property and the local legal requirements to effect the sale. The document should include
- The name and address(es) of the seller
- The name and address of the buyer
- Date of purchase
- Seller and buyer signature (two witnesses’ signature and a notary is required in some states)
- Shirt description of the property
- Full amount paid
More: The above is the information required so you can draft your Bill of Sale in any particular order as long as it reflects this information and is in line with local laws.
Tips For Drawing Up A Bill Of Sale For A House
Put A Name And Address
When preparing your Bill of Sale, always include the address and any other personal details of the buyer that you can find. While the buyer’s name is important, including other contact details like their phone number, email, and house address will provide more legal proof. If they have more than knew the address, like a work address, include it as well. But the buyer must agree to extra information to make it legally binding.
State The Full Price
The full price of the real estate must be clearly written in the contract. If you are sure of the price, wait for the final price to be negotiated before you draw the contract. An incorrect amount will render the document invalid and may cause future disputes.
Sign It In Front Of Witnesses
The contract should be signed in front of witnesses. Find out what your local law says about witnesses. In many States, the law requires two witnesses (one from the buyer’s side and the second from the seller’s side). Include a column for the witnesses and their names. If the law allows it, let them sign as witnesses also.
Be Clear About Liabilities
If the property has incurred any liabilities like taxes, utility bills, or insurance that has not been paid for, relying on word-of-mouth negotiation is not enough as this may lead to future disputes. Let your Bill of Sale include brief information about the liability and its financial cost. If the buyers agree to it and affix their signature, they cannot raise disputes in the future regarding the cost.
Property Information
The address of the property and the property type should also be included in the Bill of Sale. If possible, attach a colored copy or copies of the property to the contract for reference purposes.
A well-written Bill of Sale protects buyers and sellers of real estate from disputes and fraud. If you need more information, consult your lawyer or local laws so that you will prepare one in accordance with legal requirements. If you include all the above information mentioned in this article, you will have nothing to worry about.
