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Bill of Sale
A bill of sale is a legal document that records the transfer of ownership of personal property, such as a vehicle, appliances, or chattels, from a seller to a buyer. In real estate, it refers to the movable items included in a sale, separate from the deed that transfers the land and the home itself.
Bill of Sale Quick Facts
- Legal record of a personal property transfer
- Names the buyer, seller, item, and price
- Covers chattels, not the land or building
- Separate from the deed or transfer of title
- Serves as proof of ownership and sale terms
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What Is a Bill of Sale
A bill of sale is a written document that transfers ownership of personal property, also called chattels or movable property, from one party to another. It identifies the buyer and seller, describes the item, states the price, and records the date, standing as proof that the sale took place and on what terms.
In a home purchase, the deed or transfer conveys the real property, the land and buildings, while a bill of sale handles movable items such as appliances, window coverings, or a shed’s contents. Keeping the two straight matters because only real property secures your mortgage.
Why a Bill of Sale Matters for Mortgages
Your mortgage is secured against the real property, not the chattels, so lenders and lawyers separate the two at closing. Items transferred by a bill of sale are generally not financed by the mortgage, which is why assigning a large share of the price to chattels can affect how much a lender will actually advance for your mortgage.
A clear bill of sale also prevents disputes. Listing exactly which appliances or fixtures are included and confirming they are owned outright, not leased or financed, protects the buyer from inheriting someone else’s loan or losing an item they assumed came with the home.
Common Uses of a Bill of Sale
A bill of sale appears in a few situations around a home.
Included chattels in a home sale. Appliances, light fixtures, or other movable items named in the bill of sale as part of the property transfer, separate from the property itself.
Private vehicle and equipment sales. A bill of sale documents the transfer of a car, boat, or piece of equipment, recording the price and condition as proof of ownership.
As-is transfers. A bill of sale often states that an item is sold as-is, indicating that the buyer accepts its current condition without warranty.
For example, you buy a home for $600,000, and the deal includes a fridge, stove, and washer, all valued at $4,000. The land and house are transferred by deed, and the mortgage is secured, while the appliances are transferred by bill of sale, confirming they are owned outright and included in the purchase.
Common Mistakes and Misunderstandings About Bills of Sale
- Confusing a bill of sale with the deed to the property
- Assuming the mortgage finances items sold by bill of sale
- Skipping the written proof that chattels are owned outright
- Overlooking leased items like a furnace or water heater
- Leaving the appliances vague in the agreement
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Frequently Asked Questions (FAQ) About Bills of Sale
What is a bill of sale?
A bill of sale is a legal document that transfers ownership of personal property from a seller to a buyer, recording the item, price, and date as proof of the sale.
What is the difference between a bill of sale and a deed?
A deed transfers real property, the land and buildings. A bill of sale transfers personal property, such as appliances or a vehicle, that is included in or attached to the home.
Does a bill of sale affect my mortgage?
Your mortgage secures the real property, not chattels, so it does not finance items on a bill of sale and may indirectly affect the amount your lender advances.
Is a bill of sale legally binding in Canada?
A properly completed bill of sale is a legally binding record of the transfer, and requirements such as signatures or notarization vary by province and item.
What should a bill of sale include?
A bill of sale includes the names of the buyer and seller, a description of the item, the price, the date, and any terms such as an as-is condition or confirmation of clear ownership.