❓ Frequently Asked Questions

Do I need a bill of sale?

While not always legally required, a bill of sale is highly recommended for any private transaction, especially for vehicles, boats, and high-value personal property. It serves as proof of purchase, protects both parties, and is often required by the DMV for vehicle registration.

Is a bill of sale legally binding?

Yes, a properly executed bill of sale is a legally binding document. Once both parties sign it, it creates a legal record of the transaction and the transfer of ownership. However, it must include all essential elements (parties' information, item description, price, date, and signatures) to be valid.

Can I handwrite a bill of sale?

Yes, handwritten bills of sale are legally valid as long as they include all required information and are signed by both parties. However, typed documents are preferred because they're easier to read, look more professional, and are less likely to have errors or ambiguities that could cause problems later.

How many copies should I make?

Create at least 3 copies:

• One for the buyer
• One for the seller
• One for DMV/government records (if required)

All copies should be signed by both parties. It's also smart to take photos or scan the signed document for digital backup.

Does a bill of sale replace the title?

No. A bill of sale does NOT replace the vehicle title. The title is the legal document that proves ownership. The bill of sale is supplementary documentation that records the details of the sale transaction. You need both the signed title and a bill of sale to transfer vehicle ownership properly.

What if the seller lost the title?

The seller must obtain a duplicate title from their state's DMV before completing the sale. Do not purchase a vehicle without a title unless you understand your state's bonded title or other alternative title processes, which can be complicated and expensive. A bill of sale alone cannot transfer ownership without a title.

Should I buy a car "as-is"?

"As-is" means the seller provides no warranty and the buyer accepts the vehicle in its current condition, including any defects. This is common for used private-party sales. Before buying as-is:

• Get a pre-purchase inspection from a trusted mechanic
• Run a vehicle history report (Carfax, AutoCheck)
• Test drive thoroughly
• Understand you have no recourse if problems arise later

Can I sell a car with a lien on it?

Yes, but it's complicated. The lien (loan) must be paid off before the title can be transferred to the buyer. Typically, this involves:

1. Buyer pays the seller
2. Seller pays off the loan to the lender
3. Lender releases the lien and sends the clear title
4. Seller transfers the title to the buyer

Some buyers and sellers handle this by meeting at the lender's office or using an escrow service.

Do I need a bill of sale notarized?

It depends on your state. Some states require notarization for vehicle bills of sale, including: Florida, New York, Georgia, Ohio, Louisiana, Montana, and others.

Even if not required, notarization is always recommended because it:

• Adds legal weight to the document
• Prevents fraud (verifies identities)
• Makes disputes easier to resolve

Where can I get a document notarized?

Common places to find notary public services:

• Banks (often free for customers)
• UPS stores and shipping centers
• Public libraries
• Real estate offices
• Mobile notary services (come to you for a fee)
• Online notary services (RON - Remote Online Notarization)

Important: Both buyer and seller must be present with valid photo ID when signing before the notary.

Can I make changes after signing?

No. Once a bill of sale is signed, it should not be altered. Any changes, cross-outs, or additions made after signing can invalidate the document or raise fraud concerns. If you need to make changes:

1. Create a new bill of sale with the correct information
2. Have both parties sign and date the new document
3. Mark the old document as "VOID" and keep it for records

What if the buyer or seller refuses to sign?

Do not proceed with the transaction. Both parties must willingly sign the bill of sale for it to be valid. If someone refuses to sign, it's a major red flag that could indicate:

• The item may be stolen
• There are undisclosed problems
• The seller doesn't actually own the item
• The terms are not acceptable to one party

Walk away from deals where either party won't properly document the transaction.

Should I report the actual sale price or a lower amount?

Always report the actual sale price. Intentionally misreporting the price is tax fraud and can result in:

• Fines and penalties
• Criminal charges
• Problems if you need to make an insurance claim
• Difficulty proving the actual value later

Sales tax is based on the declared value, and most states have systems to detect underreported prices.

Can I leave the price field blank?

No. Never leave the price blank. This could allow someone to fill in any amount later, leading to fraud or disputes. If the item is a gift, write "$0" or "GIFT" in the price field.

What's the safest payment method?

For private sales, the safest payment methods are:

• Cash: Immediate, no chargebacks, but risky for large amounts
• Cashier's check: Secure once verified at the issuing bank
• Bank transfer/wire: Immediate and secure
• Escrow service: Best for high-value items (e.g., $10,000+)

Avoid: Personal checks (can bounce), money orders (can be faked), payment apps from strangers (can be reversed), and PayPal "Goods and Services" (buyer can dispute).

When should payment be made?

Payment should be made at the time of signing the bill of sale and exchanging the item. Never:

• Hand over the item before receiving full payment
• Pay before receiving the item and signed documents
• Accept "I'll pay you next week" arrangements

The transaction should be completed in full: money, item, title (if applicable), and signed bill of sale all exchange hands at the same time.

How long should I keep the bill of sale?

Keep your copy indefinitely, or at least:

• Sellers: 5-7 years (for tax records and liability protection)
• Buyers: As long as you own the item (proof of purchase, warranty, resale)

Store both physical and digital copies (scan or photo) in a safe place.

Do I need to report the sale to the DMV?

Sellers: Yes! Most states require sellers to notify the DMV within a few days (usually 5-30 days) after selling a vehicle. This protects you from liability if the buyer gets tickets, has an accident, or abandons the vehicle before transferring the title.

Buyers: You must transfer the title and register the vehicle in your name within the timeframe required by your state (typically 10-30 days). Failure to do so can result in penalties and late fees.

What if I discover a problem after the sale?

If the item was sold "as-is" (most private sales), you generally have no recourse unless the seller:

• Committed fraud (knowingly lied about the condition)
• Provided false documents or misrepresented ownership
• Violated specific laws (e.g., odometer tampering)

This is why pre-purchase inspections and due diligence are critical. Once you sign an "as-is" bill of sale and take possession, the item is your responsibility.