What Is a Real Estate Bill of Sale?
A bill of sale is a legal proof or evidence that a sale was made between two parties. Real estate bills of exchange, on the one hand, are specified and targeted in recording transactions that involve all kinds of real estate property. It provides emphasis on the description of the property as it can be highly diverse and specific. When selling condominium units, the bill of sale will reflect your contact details together with the seller. With all these details in one document, both parties must have a copy of this form.
How Do You Write a Real Estate Bill of Sale?
One glance at a bill of sale form can lead people to think that it is a straightforward form. It requires the essential details, such as the contact details and purchase arrangements. But, there are still other things to take into account when creating this form. State and Federal laws play an integral part in the validity of the form, so it is essential to review them before finalizing the transaction. Below we have gathered tips and steps on creating a valid bill of sale form.
Step 1: Know the Property
The most vital information in this particular bill of sale is the description of the property. Make sure to provide an accurate image when asked to describe the property. From its type, whether commercial, residential, industrial, or raw land, down to its exact location, all these details are necessary. If the property has an established name, it should also be provided in the document. The property name is especially helpful when it comes to determining commercial and residential properties.
Step2: Identify the Parties
Apart from the details of the property, the details of the parties involved must also be disclosed. It usually requires the name of the individual or entity and the mailing address of each. These pieces of information must be factual and accurate. Seemingly simple mistakes in these data may compromise the legitimacy and use of the document. Moreover, each party is also assigned to their roles in the transaction. Each camp is labeled and recognized as the buyer and the seller.
Step 3: Acknowledge the Transaction
After organizing the fundamental details of the parties and the property, the next details to include is the purchase price of the property. Payment arrangements for real estate properties are more complex and complicated than regular items, so another document solely focuses on presenting these details. Once the purchase price and payment method are agreed upon, the seller acknowledges the transaction by agreeing to sell the particular property at the reflected price.
Step 4: Research on the State and Federal Laws
Different states may require additional stipulations, so it is best to review your state’s existing laws or ordinances that poses a significant impact on the sale. Some states may require the inclusion of other essential documents to ensure the authenticity of the transaction. Moreover, taxation regulations can also affect the agreement on the purchase price. As much as checking these laws are primarily the concern of the seller, the buyer must also have a general overview of these laws and ordinances.
Step 5: Affix Your Signatures
The signatures from the representatives from both parties seal the deal. Just like other formal documents, the signature represents their agreement to all the aforementioned stipulations. For states that require notarization for this particular type of bill of sale, it is important that both parties must be present before a notary public before signing the document.
Frequently Asked Questions
1. Is a bill of sale a legally binding document?
A bill of sale acts similarly to contracts and other legal documents, which records the details of the transaction. It is a legally binding document that serves as evidence of the sale.
2. Does a bill of sale release the seller’s liability over the property?
Although the bill of sale shows the transfer of ownership, it is not enough to prove the release of the seller’s liability. Another form is responsible to validate this information, which is the release liability form. It shows that the seller agrees to surrender their ownership and liability of the property and agrees to hand it over to the buyer.
3. What documents should you keep after making a real estate purchase?
Apart from the bill of sale, here are the other documents that the buyer must keep after the sale: purchase agreement, seller disclosures, home inspection report, title insurance policy, property deed, and closing disclosure.
4. Why is a bill of sale important?
There are three primary reasons why a bill of sale is important. First and foremost, it protects both parties from possible fraudulent activities. Next, it is foolproof evidence of the transaction. As it is meant to reflect all the details of the property’s current condition, the bill of sale is an extremely useful document if in case the seller fails to include other necessary details.
5. How does the bill of sale protect the seller?
As stated, the bill of sale protects both parties but one can question how it can protect the sake of the seller. The execution date can determine when the liability of the seller to the item ends. The bill of sale form can also be used by either party in determining the price paid for taxation purposes.