Say you're selling your 2018 Honda Civic to a coworker for $12,000. You shake hands, they hand you a cashier's check, and you toss them the keys. Done, right? Not quite. Without a bill of sale, there's zero paper trail proving that car changed hands. If your coworker gets into an accident next week and the title hasn't transferred yet, guess whose name is still on record? Yours.

A bill of sale is a signed document that records the transfer of ownership from one person to another. It covers who sold what, to whom, for how much, and on what date. Think of it as the written handshake — the thing that makes a private transaction legally real. And it's not just for cars. People use them for boats, trailers, horses, furniture, electronics — basically anything worth enough that you'd want proof you no longer own it.

Most states actually require a bill of sale to transfer a vehicle title at the DMV. Show up without one and you'll get sent home. But even for stuff that doesn't need a title — like a $200 couch from Craigslist or a riding mower — having one protects you if the buyer later claims you never sold it, or the seller says you never paid.

Don't confuse it with a receipt. A receipt just says money changed hands. A bill of sale goes further — it transfers ownership rights, describes the item in detail, and typically includes warranty language. It's the difference between a sticky note and an actual legal document.

Private car sales are the obvious one. You're selling your truck to a neighbor for $8,500 — both of you need a bill of sale before either one sets foot in the DMV. Most states won't process the title transfer without it, and some require notarization on top of that.

But cars aren't the only scenario. Selling a boat or RV privately? Same deal. Marine titles and RV registrations follow similar rules, and lenders or insurance companies will ask for the bill of sale too.

Businesses use them constantly. A restaurant buying $15,000 worth of kitchen equipment from another restaurant that's closing down? That transaction needs documentation for tax records, depreciation schedules, and liability reasons. Same goes for construction companies selling off old machinery.

Livestock sales — horses, cattle, breeding animals — almost always involve a bill of sale, especially when the animal has registration papers or brand inspections tied to it. And in states where private firearm sales are legal, a bill of sale creates a record that both parties walked into the deal voluntarily and at an agreed price.

Even smaller stuff matters. Selling a $3,000 diamond ring, a vintage guitar, or a whole garage worth of tools? Put it in writing. It takes five minutes and saves you from a potential he-said-she-said nightmare down the road.

Start with the basics — full legal names and addresses of both the buyer and seller. Not nicknames, not business names alone. If a company is involved, include the company name and the authorized person signing on its behalf.

Next, describe the item thoroughly. For vehicles, that means year, make, model, color, mileage, and the VIN — all 17 characters of it. For other property, include serial numbers, model numbers, or any identifying marks. The more specific you are, the harder it is for anyone to dispute what was actually sold. "Blue couch" won't cut it. "Blue three-seat sectional sofa, Ashley Furniture model #B497, purchased new in 2021" will.

The sale price needs to be spelled out — both in numbers and written form. Include how payment was made: cash, check, wire transfer, or a payment plan. If there's financing involved, reference the promissory note separately.

Here's the big one — the "as-is" clause. Most private sales are as-is, meaning the buyer accepts the item in whatever condition it's in right now. No returns, no refunds, no "but you said it worked fine." If the seller is offering any kind of warranty, spell out exactly what's covered and for how long. Vague promises don't hold up.

Lien disclosure is another must-have. The seller should confirm there are no outstanding loans, liens, or claims against the property. For cars, the buyer can verify this through a lien check with the DMV — and honestly, you'd be foolish not to. Finally, both parties sign and date it. Some states want witnesses or a notary too, so check your local requirements before you finalize anything.