BIC TIP #1175: The Bill of Sale
Good observation: Stephen Long is on a boat again. He records these on Sundays, he likes the lake, so why not work while he is there? This tip covers a form every broker should know: the Realtor Bill of Sale. If personal property is changing hands in your deal, this is the clean way to document it, and it comes with a built-in safety feature: it is contingent upon the Offer to Purchase and Contract.
When Personal Property Is Part of the Deal
Plenty of transactions include more than just real property. The seller is leaving the riding mower, the patio furniture, the pool table that nobody can get down the stairs, or the hot tub. Sometimes those items are being sold for a price, and sometimes they are being transferred at no additional value.
Either way, you want it documented. And sometimes the lender will not allow those items to be listed on the real estate contract itself. That is where the Bill of Sale comes in.
Keeping It Off the Real Property Contract
The Realtor Bill of Sale form lets you list all of those items and note the amount being paid for the personal property being transferred from seller to buyer. It is a nice way to document the deal without putting it on the Offer to Purchase and Contract for real property.
That keeps the real estate contract focused on the real estate, while still making sure everyone has a written record of what personal property is conveying and for how much.
The Contingency That Saves the Day
Here is the part Stephen stresses as very important. Imagine a buyer and seller sign a homemade bill of sale for a dollar covering the seller’s furniture and equipment. Then the real estate contract falls through. Technically, the buyer may now hold a bill of sale for all those items for a dollar. That is not a place anyone wants to be.
The Realtor Bill of Sale form avoids that mess because it is contingent upon the Offer to Purchase and Contract. If the house does not close, the personal property sale does not go forward either.
The Practical Takeaway
When personal property is part of the deal, skip the napkin agreements. Use the Realtor Bill of Sale form, list every item clearly, state the amount, and rely on its built-in contingency to tie it to the real estate contract. If you have questions about how a lender will treat personal property, check with the lender and your broker-in-charge.
