A quitclaim bill of sale is like a detailed receipt for the sale of an item. It states the buyer and seller, item, and price. However, a quitclaim bill of sale makes no promises about the type of title the seller holds to the property. The seller transfers only the ownership rights they have to the buyer, and the buyer accepts the item understanding that no guarantees are being made about the title. There are pros and cons to using a quitclaim bill of sale.
Quitclaim Bill of Sale vs. Deed
It's helpful to understand the different types of documents used in transferring property. A quitclaim bill of sale, for example, is not interchangeable with a quitclaim deed:
- A quitclaim bill of sale transfers personal property from one person or company to another.
- A quitclaim deed is a document used to change the title to a piece of real estate.
Quitclaim Bill of Sale vs. Warranty Bill of Sale
There also are different types of bills of sale:
- A quitclaim bill of sale transfers only the ownership interest that the seller has to the buyer. The seller makes no guarantee that the property is owned free and clear without any claims against it.
- A warranty bill of sale transfers ownership, while also promising that the seller holds a clear title to the property. Should a claim later emerge that was in existence when the sale was made, the seller is liable to the buyer.
Information to Include in a Quitclaim Bill of Sale
A quitclaim bill of sale should include:
- The names and addresses of the seller and buyer
- A clear, detailed description of the item being sold
- The sale price
- A description of the condition of the item, including a statement that the item is sold "as is"; this means that the item is not brand new and it is sold with any existing defects or problems
- A statement that the sale is made without warranty, which makes the sale a quitclaim sale
- Signatures of both buyer and seller, notarized or witnessed according to state requirements
Pros of a Quitclaim Bill of Sale
Using a quitclaim bill of sale can have benefits for both seller and buyer. A seller is able to sell the property without having to ensure the title is clear. They sell it without guarantees, so if, for example, there is a lien against the property, that lien passes with the property to the buyer.
A quitclaim bill of sale can be beneficial for a buyer as well, because the property is priced lower to reflect the fact that there are no warranties being given, so it can present a good deal.
Cons of a Quitclaim Bill of Sale
A quitclaim bill of sale also presents some downsides. Because the bill of sale makes no guarantees at all, a buyer may find themselves owning property that is tied up with liens, or even property the seller didn't actually own at all. As a buyer, it is important to do your research and make careful decisions when it comes to accepting a quitclaim bill of sale.
The downside for the seller is that a quitclaim bill of sale will reduce the sale price significantly.
Creating a Quitclaim Bill of Sale
You can create a quitclaim bill of sale on your own by looking at what your state's requirements are. You also can use an online service provider who can help you create one.
A quitclaim bill of sale is a useful way to transfer property from seller to buyer when there are no guarantees being made about the seller's ownership rights to the item.