Quitclaim Deed: Your Guide To Understanding

Life is full of exciting milestones. Graduations, weddings, and big promotions are just a few examples. Amongst these milestones, some people will make the big decision to buy a house. Becoming a homeowner is an exciting step in life. However, owning a home is a huge responsibility. From the very beginning, buying a house involves a lot of paperwork. No property transaction is complete without a deed. Moreover, did you know that there are different types of deeds? In this article, you are going to learn everything you need to know about a quitclaim deed.

What is a Deed?

Before we dive too deep into the different types of deeds, let’s cover the basic definition of a deed itself. A deed is a document that displays ownership of a specific property. The property at hand can be a home, a parcel of land, an office building, or even an island. Any physical property that can be bought and sold will have a deed to prove ownership. When a property changes hands, the previous owner must sign the property deed to transfer the right to ownership to the buyer.

It is important to note that simply signing a deed does not magically officiate new ownership. A title transfer also must occur (more on that later). Additionally, many states require that the deed be submitted on the public record in order to be officially recognized.

What does a Deed Involve?

Like many matters of legal and financial importance, laws and regulations vary by state. Be that as it may, generally speaking, a property deed document will include the following information:

A written indication that the document is, in fact, a deed
Contact information for both the buyer and the seller
Signatures from both of the above parties
A detailed description of the property itself

In most cases, the deed must be physically transferred from the previous owner to the new owner. This action can be as simple as handing it to them.

What is a Quitclaim Deed?

Now that we know what a deed is, let’s tackle the mysterious quitclaim deed. A quitclaim deed (QD) transfers a sellers interest in a specific property to a potential buyer. A foundational element of a QD is unwarranted and unprotected. That is to say, a quitclaim deed does not ensure that the seller actually owns the property they are selling. Certain types of property transactions may benefit from using this type of deed.

Grantor vs. Grantee

In matters pertaining to property ownership transfers you will inevitably hear the terms “grantor” and “grantee”. What is the difference? Which is which? Read on to find out!

Grantor Definition

Simply put, the “grantor” in terms of real estate, refers to the seller. The grantor typically carries more liability in transactions dealing with important assets (such as houses). Therefore, it is an important step for a seller to sit with a lawyer to discuss terms of sale and the type of deed and title transfer best suited for the sale of their property.

Grantee Definition

Conversely, the “grantee” is the buyer. Once ownership has been officially transferred, the grantee will become the grantor in any future sale of the property.

When is a Quitclaim Deed Used?

More than likely, the notion of someone trying to sell something they don’t actually own sounds strange to you. As it should! However, this type of deed is typically used in matters pertaining to families or close friends. Therefore, making quitclaims a bit safer. Some scenarios in which a quitclaim deed may be appropriate:

Simple property transfers between siblings
Ownership transfers from parents to children and vis versa
Adding a spouse to a deed after getting married
Transferring ownership to one person after a divorce (this can save time and money for couples parting ways in an amicable fashion)
The transfer of property to trust.
Changing your name on a current deed (such as after getting married, etc)

Additionally, here are some examples that are non-familial:

Tax deed sales – In the event that a house is seized due to outstanding tax debts, it will sometimes be sold in a public auction. In this case, the seller (i.e. the local government) does not claim any interest in the property itself. Instead, they are looking to recoup the previous owner’s tax debts.
Transferring a property from personal to business use

Quitclaim deeds should be used between two parties that know and trust one another. Exercise caution if a seller you don’t know is encouraging you to use a quitclaim deed for your transaction.

Quitclaim Deed Form

Anyone can easily generate a quitclaim deed form online. Rocket Lawyer, for example, provides an easy to use quitclaim form deed generator. After selecting the state of the property sale, you will need to accurately provide the following information:

Address of the property
Current contact information and marital status of both the seller and the buyer
Date of property sale/transfer
The State where the deed will be signed and notarized
The State tax exemption status
Purchase price (if applicable)
Preference of the grantor to maintain any gas, oil, or mineral rights to the property

Naturally, the above list is just a skeleton of the deed. Requirements vary by state. Be sure to check your local laws to ensure you properly execute your quitclaim deed form. To help illustrate some of the differences by state, we have detailed some state-mandated quitclaim deed requirements below.

Quitclaim Deed California

Once you have filled out a California quitclaim deed, you will need to get it notarized. Next, you will need to need to visit your appropriate local government office to file some paperwork. Depending on your county of sale, that may be a Recorder’s office, a County Clerk’s Office, or an Assessor’s office. There you will file submit your quitclaim deed and file three forms:

Documentary of transfer tax
Notice of Exempt Transaction
Preliminary Change of Ownership Report.

The cost to file a quitclaim in California starts at roughly $15, with the possibility of additional fees of up to $87 dollars. To enumerate, in California requirements can vary on a county to county basis. In other words, the regulations regarding quitclaim deeds in California are not uniform statewide.

Quitclaim Deed Texas

Texas is notoriously fickle when it comes to quitclaim deeds. While the regulations for filing quitclaim deeds vary from state to state, it federally recognized that a quitclaim deed does not guarantee a grantor owns the property they are trying to sell. Texas has a problem with this notion, particularly on the insurance front. If you are smart about purchasing property, you will likely want to acquire title insurance. In Texas, title insurance companies are very unlikely to take on a client involved in a quitclaim deed sale.

If you are on either end of a quitclaim deed transaction in Texas, Deed Claim has a very thorough breakdown of requirements.

Quitclaim Deed Arizona

A properly filled out quitclaim must be notarized to be considered valid in Arizona. It is essential that the grantor and grantee sign the quitclaim in the presence of a notary public. Then, the grantee will pay the appropriate fees to file the quitclaim with the appropriate county recorder’s office.

In some cases, the state of Arizona may mandate the filing of an affidavit of property value. This affidavit would require a separate notarization to be filed properly.

Other Types of Deeds

What do you do if you are purchasing a piece of property from someone you do not know? What type of deed do you need? Well, there are three alternative deeds used in the transfer of property ownership: general warranty, specialty warranty, and bargain & sale.

General Warranty Deed Definition

One of the more common types of deeds in a property sale is a general warranty deed (aka warranty deed). In this case, a grantor does, in fact, hold the title of a property and has the proven right to sell it as the owner. Additionally, the grantor takes responsibility for any possible liens of creditor issues with the property. This guarantee goes as far back as the origin of the property – whether or not the grantor owned the property since then.

A general warranty deed offers the best protection for the buyer. When the grantor signs the general warranty deed, they protect the grantee from any possible title issues. For this reason, mortgage lenders prefer the use of general warranty deeds are used in the sale of residential property transactions.

Elements of a General Warranty Deed

A proper general warranty deed will include:

The name and contact information of the grantor
The name and contact information of the grantee
A written statement that the current owner is selling the property to the buyer
A legally acceptable description of the property (which can typically be found on the previous owner’s deed)
A written statement that the current owner (grantor) is the current legal owner of the property and therefore has the ability to sell it
Written confirmation that should claims arise, the grantor will cover them instead of the grantee
A written statement that the grantor does not know of any current legal claims or liens on the property

You will likely notice the above list does not include any financial details, such as the sale price or property value. A general warranty deed legally portrays the intent and ability to transfer ownership.

Specialty Warranty Deed Definition

Similar to a general warranty deed, a special warranty deed guarantees that the seller owns the property and therefore has the legal right to sell it. The primary difference is that a specialty warranty deed only holds the grantor liable for warrants that occurred during the grantor’s period of ownership. This type of deed helps protect the grantor aka the seller. This type of deed is commonly used for transactions dealing with commercial properties.

Both special warranty deeds and general warranty deeds protect the buyer by guaranteeing:

The seller actually owns the title to the property
The seller has the legal right to sell the property
That the property is still available for purchase
To the knowledge of the seller, the property is debt-free (unless otherwise stated in the deed)
The seller is liable for any problems with the property (unless an agreement has been made to the contrary)

Bargain and Sale Deed

Like specialty and general warranty deeds, a bargain and sale deed guarantees that the grantor owns the title and right to sell the property. However, a bargain and sale releases the seller of any liability regarding possible warranties outstanding on the house.

This type of deed is most often used in the event of tax sales and foreclosures. In this case, a bank or government body typically takes over the property in question. The said authority has it typically less informed regarding the history of the property. Therefore, they do not want to be held liable for any outstanding warranties.

Elements of a Bargain and Sale Deed

The following provisions are likely to be detailed on a bargain and sale deed:

Date of sale
The names of the grantor and grantee
The purchase price of the property
Type of property sold (residential, commercial, etc)
A legal description of the property
Verbiage releasing the seller of liability in regards to any possible outstanding warranties such as: “grantor grants and releases or grants, bargains, and sells”

How do I get a Deed Notarized?

As you may have noticed, all types of deeds require notarization in order to be valid. What does that mean exactly? Notarization has existed, in some form or another, for countless centuries. In modern America, a notarization is done by a certified notary public. A notary public is an official representative of the secretary of state.

A notary public acts as an impartial witness to the signing of documents of great value. Therefore, it is not just property deeds that require notarization. Divorce papers, prenuptial agreements, and affidavits are just a few other documents commonly requiring notarization.

A notary not only witnesses the signing of documents but validates the signer’s identity. Furthermore, a notary ensures that the signer understands the contents and is signing willingly. The primary purpose of notarizing documents is to prevent fraud. A notary is not allowed to give legal advise or act as an attorney.

Where to find a Notary Public?

Fortunately, you should not have to look too far to find a notary near you. Depending on where you live, you can likely find the services of a notary at several local businesses. Some good places to look are:

Your office – Several companies offer onsite notaries to streamline internal company paperwork processing. As an employee, you should be able to use these services for personal matters as well
Banks – Arguably the most common place to find a notary is a bank. Better yet, if you are an account holder, sometimes they will offer free notary services as an added benefit of being their client
Real estate or insurance offices – Whether or not you are a customer at these establishments, if they have a notary, they have to help you. Notary publics serve the public
Local Government establishments – From public libraries to city hall, there is a notary at a local government office waiting to help you
Military Bases – If you or a relative are active military, you should be able to access free notary services at your military base
Mobile notaries – Better yet, why run around trying to find a notary when they can come to you! This option is especially common for those living in large cities

Bear in mind that notary hours and ability are subject to the establishment. Do some research on your area to find the best notary service near you.

What do I Need for a Notarization?

Save yourself valuable time and money by coming prepared to your notary appt. State notary laws and requirements vary from state to state. However, the following list is a good place to start.

Proper Identification

The cornerstone of a successful notarization is proper identification of the signer. Therefore, the presentation of a proper form of identification is crucial. The most commonly accepted forms of i.d. are a valid passport or driver’s license. Essential elements of a valid i.d. for a notary include:

A recent photo
Your signature
A brief physical description (hair and eye color, etc)
The issuing authority (i.e. Texas, California, U.S.A, etc)

If you have an alternative form of identification, be sure to check with your local notary to make sure it is acceptable.

The Document

This should go without saying, but don’t forget the document you need notarized! Be sure to fill out all the required fields beforehand to save time. However, resist the urge to sign! Most states require you to sign in front of the notary.

All Required Parties

Most documents require signatures from more than one person. If all the necessary parties attend the notary appt at the same time, you can save time and money. In the event that is not a possibility, it is legal to have signatures notarized at different times, even by different notaries. However, this process adds considerable time delays and fees along the way.

The Notary Fee

Prices of notary services depend greatly on a number of factors. Fortunately, most states do not allow notaries to charge more than $10 per signature. Some notaries can, and will, charge extra fees for certain services. For example, mobile notaries typically charge for time and mileage to cover their travel expenses. If you suspect someone is overcharging you for notary service, be sure to report it to the proper authorities.

Deed vs. Title

It is vital to understand the difference between a deed and a title. Both deeds and titles are legal instruments used in the transfer of property. However, they carry entirely different weights in terms of actual ownership.

A title is a document that proves ownership of a property. If your name is on the title of a property, you have the right to access, alter, and sell the property as you please. Some titles detail the partial ownership of a property or entity. For example, your name may be on the title for a condo in a large residential complex. You would have the right to modify and sell that particular unit as you see fit. You would not, on the other hand, have the right to sell the building in its entirety.

Conversely, a deed is a written document that details the transfer in the interest of a property title from a seller to a buyer. A deed must be notarized and filed with the county registrar to be officially recognized by the state. It is important to understand that a deed does not legally officiate an exchange in ownership. The buyer must apply for a new title to officially bear ownership to the property.

How to Apply for a Title

The title process is different in every state. To protect your assets, be sure to specifically research the title process for the state where you purchased a property. Fortunately, Discover has some wonderful general best practices regarding property titles.

Quitclaim Deeds: In Summary

First and foremost, it is essential to take the time to understand the deed and title process recognized by your state. Rules and regulations vary widely across state lines. Avoid expensive legal troubles by abiding by the appropriate state guidelines regarding transfers of property ownership. Nationwide, quitclaim deeds do not guarantee that a seller has any legal right to the property in which they are selling. Therefore, quitclaim deeds are primarily useful in matters dealing with family and trusted friends. Anyone could draft a quitclaim deed for the Golden Gate Bridge, but that doesn’t mean they own it and have the right to sell it! If you are buying property from a third party, be wary of a seller with a quitclaim deed.

Sources

https://www.realtor.com/advice/sell/need-quitclaim-deed/

https://www.legalzoom.com/articles/what-is-a-quitclaim-deed

https://www.thebalance.com/definition-of-grantor-1798565

https://www.deedclaim.com/texas/quitclaim-deed/

https://www.discover.com/home-loans/blog/6-things-know-property-titles

https://www.rocketlawyer.com/article/whats-the-difference-between-a-property-deed-and-a-title-ps.rl

https://legalbeagle.com/6240558-file-quit-claim-deed-arizona.html

https://www.legalzoom.com/articles/california-requirements-for-quitclaim-deeds

https://www.superiornotaryservices.com/blog/what-need-document-notarized/

https://www.thebalance.com/definition-of-grantee-1798564

https://www.realestatelawyers.com/resources/real-estate/deeds-and-trusts/bargain-and-sale-deed.htm

https://www.investopedia.com/terms/s/special-warranty-deed.asp

https://thismatter.com/money/real-estate/deed-types.htm

https://www.investopedia.com/articles/personal-finance/051614/five-things-know-about-quitclaim-deeds.asp

https://definitions.uslegal.com/g/general-warranty-deed/

https://www.deedclaim.com/warranty-deed/

https://en.wikipedia.org/wiki/Quitclaim_deed

https://www.rocketlawyer.com/article/difference-between-a-general-warranty-deed-and-a-special-warranty-deed.rl

https://smartasset.com/mortgage/house-deed

https://www.rocketlawyer.com/form/quit-claim-deed.rl#/

http://help.legalnature.com/articles/what-you-need-to-know-about-deeds-and-property-transfer

About The Author

Chelsea Rivera

Bill of Sale: Your One Stop Shop Guide

/ Uncategorized / By Chelsea Rivera

Daily life is full of countless transactions. Swiping a credit card to buy groceries, paying cash for knick-knacks at a garage sale, or exchanging money for various types of services like a doctor’s appointment. Occasionally, certain transactions will involve a bill of sale. What does that mean? When do you need one? How do you get one? All of these questions and more will be answered in this article. Read on to find out everything you need to know about the mysterious bill of sale.

What is a Bill of Sale?

The concept of a bill of sale (BoS) is centuries old. In fact, various drafts of bills of sale documents have been traced back to the middle ages. At its foundation, a BoS officially records an exchange of assets. Naturally, as time has progressed bill of sale documents have evolved in content and use.

Originally, a BoS documented transactions involving shipping. Specifically, detailing the goods that were shipped from place to place. Such as food, animals, or raw materials like steel and cotton. Now, a BoS is most often used to track the sale of modes of transportation. For example, a car, watercraft, or motorcycle.

Traditionally, a bill of sale is initiated by the selling party. The document will include the necessary details of the exchange. The purpose of a BoS is to protect both the buyer and the seller.

When is a Bill of Sale Needed?

As previously mentioned, a BoS in modern times is frequently used in the exchange of transportation vessels. A motor vehicle is the most common example. Vehicles can include cars, trucks, tractors, buses, limousines, and eighteen wheeler trucks, to name a few. Additionally, bills of sale are used in the sale of boats, motorcycles, and certain large animals or livestock.

Nationwide, requirements for bills of sale vary. However, most states to require a mandatory BoS document the exchange of considerable assets of value. However, less financially significant sales do not require always require a bill of sale. The sale of certain items such as furniture, inexpensive jewelry, or clothes may include a bill of sale at the discretion of the seller. Although, a buyer can also initiate a bill of sale if that makes them more comfortable with the transaction.

Bill of Sale Template

To better illustrate a bill of sale, it is helpful to note what is included in the document. The exact appearance of a bill of sale can vary, but the information included is usually the same. A typical BoS will include the following information:

Type of vehicle (i.e. car, boat, airplane, etc)
Vehicle specifications – Make, model, year, odometer reading, VIN (Vehicle identification number)
Name, Address, and signature of both the buyer and the seller
Purchase price (at time of exchange, not the original value)
Date of sale
Guarantee from the seller that the item is free from all claims and offsets.
Any representations or warranties
Signature and stamp of a notary public

This list is a good jumping off point, but official requirements can vary nationwide.

Bills of Sale Across the Country

As you may suspect, the above requirements can vary depending on the state in which the sale is taking place. To ensure your bill of sale is accurate, consult your state’s requirements. Be sure to review the requirements for the state in which the sale is taking place. It is quite common for people to travel out of state for the purchase of motor vehicles, so the requirements may be different in that state than your home state. Below are some examples of different states, as a jumping off point. If your state of sale is not listed, consult the DMV bill of sale requirements by state list.

Bill of Sale Texas

A bill of sale is not required in the sale of vehicles in Texas. Instead, an official vehicle title transfer is mandatory for a legal vehicle sale in Texas. However, that is not to say you should not consider exchanging a BoS. Especially in car sales, bills of sale can prove quite useful in the event of an automobile mishap. A proper BoS can sometimes help prove the seller is no longer liable for possible damages caused by the car they sold. Texas is the second largest state in America, with consistently high statistics regarding car accidents. Therefore, the extra precaution of drafting an official bill of sale is a wise move.

In addition to the aforementioned bill of sale elements above, a Texas document may also include the known vehicle history report.

Bill of Sale Florida

In Florida, a BoS is a mandatory requirement of the state in private party sales of vehicles. The Florida Department of Highway Safety and Motor Vehicles (DHSMV) even provides an easy-to-use, state-approved bill of sale template. The state of Florida recommends getting the bill of sale notarized. However, notarization is not required. In addition to the standard elements of a bill of sale, Florida also requires the title number of the vehicle.

Furthermore, Florida encourages sellers to submit a Notice of Sale to the DHSMV. In the state of Florida, you must submit your notice of sale to your local tax collector’s office. This simple act frees you from liability in regards to the asset exchanged.

Bill of Sale Oregon

Like Texas, the state of Oregon does not require an official BoS for most motor vehicle transfers of ownership. However, the completion of a bill of sale is recommended to protect the seller. Without a bill of sale, Oregon may hold you, the previous owner, liable for outstanding vehicle registration fees. A proper bill of sale will confirm the date in which you released financial responsibility to a new owner.

Oregon bills of sale, in addition to the standard requirements, should include the license plate number of the vehicle. Furthermore, the new owner (i.e. purchaser) is required to apply for a new car title within 30 days of purchase. Failure to oblige with result in a late fee that gets more expensive the longer the buyer waits.

Bill of Sale Georgia

Officially, Georgia does not require a BoS. However, the state does provide a free online template. Like Texas and Oregon, research suggests that while not required, a bill of sale is a smart idea (seeing a trend here?). Sellers have been held liable in the past for abandoned vehicles they had sold. As a seller, you cannot control what the buyer does with the asset after the sale. The best way to save yourself legal trouble and release liability is with a handy dandy bill of sale.

Bill of Sale Colorado

Like Florida, the state of Colorado does require a bill of sale in certain instances. Specifically, when the title does not have space to record the odometer reading, or if the purchaser needs to drive the vehicle prior to official registration. In any case, it is always best to fill out a BoS to protect both the buyer and the seller. Most local Colorado county motor vehicle offices will provide an acceptable bill of sale form.

Bill of Sale Form

Some states, whether they require it or not, provide an official form for bills of sale. A quick google search with your state followed by “bill of sale form” will likely churn out a template for you. If not, there are countless free generic templates online. Most will include a variation of the aforementioned listed requirements such as sale price and buyer/seller contact information. Less is more does not apply in this case. When in doubt, include as much information regarding the sale as possible.

Once all the required information is filled out, both the buyer and the seller must sign and date the document. While not required by all states, it is a good idea to have the BoS signed and stamped by a notary as well.

What is a Notary?

A notary, or notary public, is a certified representative of the secretary of state. A notary serves as an unbias witness to the signing of important or significant documents. An important element of notarization is the proper identification of all parties signing the document. A notary not only confirms the identity of the signer but that they understand the document and are choosing to sign at their own will.

Some version of the notary public has been around for centuries. A notary is intended to prevent fraud and ensure the validity of the people signing the document. It is vital to understand that a notary is not intended to prove the authenticity of the contents of the document.

Notary Public vs. Attorney

In fact, a notary is not allowed to legally advise on the contents of the document they are signing. This is an important distinction because in some cultures a notary acts as a lawyer for clients. For example, in Hispanic cultures, people commonly seek legal advice from a notario publico. While notario publico directly translates to “notary public” the two occupations have very different job descriptions. A notario publico can legally draft, advise upon, and notarize documents for clients. They undergo rigorous legal training, with a minimum of five years of legal education and experience. On the other hand, anyone over 18 without a criminal record can become a notary in the U.S.

An attorney in America can, however, also be a certified notary public. So long as the attorney is not notarizing a document that they drafted, or advised, they can notarize documents.

Where to find a Notary?

Fortunately, when in need of a notary, you likely do not have to look too far. There are millions of notaries in the United States. More often than not, you can probably find a notary in a place you regularly visit when you run errands. When seeking a notary in your town or city, consider checking in these places:

Car dealerships – Due to the high volume of notary needs on site, most major car dealerships have a notary on site and available for public use
Insurance offices and real estate agencies – For the same reasons as car dealerships!
Banks and credit unions – Whether or not you are a paying client/account holder of a financial institution, they have to provide notary services to you. Notaries serve the public, therefore they have to be available to everybody
Your place of business – Some larger companies have a notary on staff for business and employee convenience
City Hall or County Clerk – Check with your local government offices about notary service availability
Public Library – You can get more than books and old movies at your local library!
Universities – Many college campuses offer notarization services for students and faculty

Naturally, pricing and availability vary widely depending on your place of residence. Save yourself time and money by calling and confirming availability first.

How much does a Notary Cost?

There is no standard cost for notary services. However, there is a legal cap to how much a notary can charge. For example, some states mandate a notary cannot charge more than $10 per signature. That is to say, if you have a document requiring multiple signatures from multiple parties, notarization services can start to add up.

At the same time, some of the aforementioned notary services come with a low-cost or free price tag. For instance, if you are an account holder at some larger banks, they may offer complimentary notary services.

On the other hand, some notaries charge additional fees for certain services. For example, larger metropolitan areas often have mobile notaries. This on-demand, notary at your doorstep service is an increasingly popular way to save the consumer time. However, it comes at a higher price tag as the mobile notary will charge extra for travel time.

Title Transfer vs. Bill of Sale

Clearly, all states have different requirements involving a bill of sale. However, it is undoubtedly always a good choice to have one, just in case. Legally speaking, a bill of sale can, in some cases, be an effective tool for releasing liability and marking an exchange in ownership. Although this may be true, a bill of sale does not officially make the buyer the owner of the asset. Instead, the buyer will have to apply for a title transfer in order to officially become the owner. This fact is true in every state.

What is a Title Transfer?

A title is a document that officially marks ownership of certain assets, such as cars and boats. There are several instances when a title transfer is required. For example:

Buying or selling
Transferring ownership between family members
Paying off a loan
Inheritance
Changing the name on the title
Donations or gifts

The above list applies to a variety of items, such as cars, boats, planes, and more. However, every state has different rules and regulations regarding which assets have titles and therefore would require a title transfer to occur. Be sure to check your state’s requirements regarding your asset’s documentation.

How to Get a New Title

As a buyer, once you have procured your bill of sale, you will need to apply for a new title to confirm ownership. Specific steps vary by state, but the general flow is as follows:

Make an appointment at your local department of motor vehicle office (the notorious DMV)
Be sure to select “title transfer” as the reason for the visit
Fill out the appropriate paperwork, and provide the bill of sale
Pay a transfer fee (price varies by state)
Be prepared to complete addition state-required tasks (such as state inspection and/or smog testing)

Types of Bills of Sale

To better understand bills of sale, we need to break down the various types that exist.

Vehicle Bill of Sale

A vehicle bill of sale is easily the most common type. To enumerate, while a number of states do not require them, it is always a good idea to have one. If something goes sideways with the transaction and/or the asset exchanged, you will find yourself relieved to have a notarized bill of sale on hand. These simple documents have saved many people the headache of lawsuits and liability.

To reiterate, a BoS does not indicate an official exchange of ownership. In all fifty states, it is mandatory that the buyer applies for a new vehicle title to legally and officially bear ownership to the asset.

Quitclaim Bill of Sale

A quitclaim bill of sale transfers the interest of ownership from the seller to the buyer. However, a quitclaim specifically makes no guarantee that the asset in question is owned by the seller and/or is free of adverse claims or outstanding liens against it.

This type of sale presents both pros and cons. For the seller, this can make it much easier to sell a car that, perhaps, belonged to their deceased relative. As for the buyer, assets being sold with a quitclaim are typically more affordable for the buyer due to the risks involved. This same reason is a con for the seller, as they will not profit as greatly from the sale. If you are a buyer involved in a quitclaim sale, do not skimp on your due diligence. Do your research and try to confirm that the asset and seller are legitimate.

“As is” vs. Warranty Bills of Sale

Cars are notorious for breaking down, especially when they are used and/or an older model. Therefore, as a seller, you may want to include the words “as is” in your bill of sale. These two words can protect you from having to pay for vehicle repairs, should they arise after the sale took place.

Conversely, some sellers may include a limited warranty provision. This type of sale is more likely to occur when buying from a pre-owned car dealership. In this case, the bill of sale would state a warranty that covers certain repairs for a restricted period of time. It is vital that the document state explicitly the terms of the warranty.

Absolute Bill of Sale

In the event that a sale happens outright, an absolute BoS would be appropriate. For example, if the buyer pays for a car in full at the time of sale. In this case, the seller relinquishes the right to the car to the buyer immediately, and cannot request any more money.

This document should include all the fiscal details of the sale. Such as:

The agreed upon, and paid price
Form of payment (i.e. $500 cash, $2500 check)
…plus all the previously mentioned details regarding the item exchanged, signatures, etc.

A sale in the manor is common amongst private sales of assets.

Conditional Bill of Sale

As you can probably infer, a conditional sale is subject to various provisions. To carry on with the example of a vehicle, a conditional sale would involve a payment plan. If you purchase a car from a dealership, it likely comes with a higher price tag than buying an old car privately off of Craigslist. You will pay a certain amount down, and then pay the remaining balance in monthly installments over an agreed upon time period.

In the event that you default on your payments, you can have the car taken away, or incur a serious of fees. Therefore, in a conditional sale, the buyer does not fully own the asset until the conditions have been met.

Bill of Sale: In Summary

A bill of sale is a simple document used to detail the sale of an asset. Anything from a motorcycle to a live horse may use a bill of sale. Like many facets of state law, bills of sale requirements vary widely across the country. However, even if your state does not require one, it is always a good idea to properly complete, and notarize, a bill of sale. These easy to use documents are designed to protect both the buyer and the seller when exchanging assets.