A company’s ability to sell and purchase property is essential to its long-term life and vitality. A business saddled with excess merchandise or equipment lacks efficiency, directing critical funds towards maintenance, storage, or repair of unneeded property. A properly-drafted bill of sale can help dispose of assets quickly and conveniently.
Quitclaim bills of sale are important business documents. Although they do not afford a buyer the same protection from third-party ownership claims provided by warranties, they do allow for quick and simple transfers of property. In certain situations, sellers cannot specifically prove their title to assets, but this does not mean that they do not own that property. A quitclaim deed allows those sellers to transfer their interests without an exhaustive and expensive search for ownership documents, documents that may seldom be needed. Moreover, bills of sale, whether quitclaim or warranty, are a required part of a company’s financial documents, useful for tax reporting and general accounting purposes.
If you follow the enclosed model and guidelines, you will have a written acknowledgment of your property sale, which will provide essential documentation of your ownership rights, and you will be well on your way to establishing a new record of title for any property purchased.
2. Dos & Don’ts Checklist
- It’s not necessary to fill out a bill of sale for every deal made in the ordinary course of business. In many situations, a simple receipt will suffice. However, if you are buying or selling expensive or unique property – or anticipate that ownership of a piece of property may come into question at a later date – it is important to make sure that a complete bill of sale is signed and witnessed.
- Keep a log of property exchanges, whether you are the buyer or the seller. We recommend that you create a numbering system - this will prove valuable when you are searching for a specific sale.
- Be sure to keep a copy of every bill of sale issued, either by saving an electronic copy on your hard drive or by making a physical copy of the document given to your customer. An itemized record will be useful for tax and accounting purposes.
- Getting the correct name and physical address of the other party to your deal is essential. If a question emerges, you’ll need to get in contact with that person or company.
- Bills of sale (like the one contained in this package) are generally used to transfer personal property, like furniture and equipment, and not real estate. The sale or purchase of real estate requires different documents entirely, and the recordation of those documents with local government offices. In addition, some types of personal property (like cars or boats) require more information and separate forms to complete an official transfer of title.
- To transfer intellectual property (like copyrights, trademarks, or patents), the seller can only transmit his or her interest using a document called an “assignment.” A bill of sale will not suffice to convey that interest.
- If you are selling the property, give the buyer a completed bill of sale only after you have received your money and the transaction is complete. Since the bill of sale states that you have already been paid, it may be difficult to collect any outstanding amounts if the buyer has written evidence that its payment obligations are complete.
3. Quitclaim Bill of Sale Instructions
The following provision-by-provision instructions will help you understand the terms of your quitclaim bill of sale. Please review the entire document before starting your step-by-step process.
- Purchase Price. Write the purchase price in the first blank provided. Be sure to include the full price paid, including any previous down-payments that were made on the property.
- Names of Parties. Identifies the parties and the date of the agreement. One party to this bill is called the “Seller” and the other is called the “Buyer.” As you probably guessed, the Seller is the party that will sell the property and the Buyer is the party that will purchase it. If real estate, intellectual property, or titled goods (like cars) are being sold, use a more specific bill of sale and not the enclosed form.
- Property Information. The blank space provided allows you to describe fully the property you are buying or selling. Be as specific as possible, making sure that the item being sold can be identified clearly from the description. If there is a serial number on the property, write that down as well.
- Property Title. This paragraph is what makes this bill of sale a “quitclaim” document. The Seller specifically notes that it is transferring only what it has, and makes no guarantees about what that is or whether any other individual or company has ownership rights or liens on the property.
- Condition of Property. The Seller is not making any promises about the condition of the items being sold. Under the enclosed bill of sale, the property is being sold “as is” – in other words, what you see is what you get. Note, however, that if there are defects or problems with the property that the Seller knows about, the Seller should disclose those problems to the Buyer. This will limit future claims that the sale is void because the Buyer was misled or defrauded.
- Signatures. Only the Seller needs to sign the bill of sale. The sample form includes space for a witness’ signature as well, although this is not necessary in all states. However, if a third party witnesses the execution of the bill of sale, it may protect the parties from later claims of invalidity or lack of agency