Bill of sale

Key Takeaways

• A bill of sale transfers personal property. Real estate cannot move that way, because RCW 64.04.010 requires every conveyance of real estate to be by deed.
• A bill of sale is not recorded with the county auditor. It is signed and handed to the buyer, while the deed goes into the public record.
• Anything the parties negotiate into a Washington sale that is not attached to the land, such as a free standing refrigerator, patio furniture, or artwork, should leave closing on a bill of sale.
• A Washington manufactured home stays personal property, titled under chapter 46.12 RCW, until the owner eliminates the title under chapter 65.20 RCW.

What It Means

A bill of sale is the short written document that moves ownership of Personal Property from a seller to a buyer. It names the parties, describes the items, states what is being given in exchange, and carries the seller's signature. That is all it has to do. Nothing about it is recorded, and no government office issues one.

It matters in a real estate deal because a closing usually moves two different kinds of property at the same time. The land, the house on it, and everything permanently attached travel as Real Property and pass by deed. The washer and dryer, the seller's riding mower, and the painting the buyer talked the seller out of are personal property, and a deed does nothing for them. They pass by bill of sale.

Brokers get into trouble when an item's category is unclear. A ceiling fan bolted to the joists is a Fixture and goes with the house automatically. The same fan sitting in a box in the garage is personal property and goes nowhere unless the contract says so. When the parties are not sure which side of the line an item falls on, the fix is cheap: name the item in the purchase agreement, then hand over a signed bill of sale at closing.

How It Works in Washington

Washington draws the line in statute. RCW 64.04.010 provides that every conveyance of real estate, or any interest therein, and every contract creating or evidencing any encumbrance upon real estate, shall be by deed. Personal property sits outside that rule, which is why a bill of sale needs no acknowledgment and no trip to the county auditor. In practice the deed gets recorded and the bill of sale gets handed to the buyer with the keys.

The sharpest Washington application is manufactured housing. RCW 65.20.030 says a manufactured home becomes real property only when the new owners eliminate the title under chapter 65.20 RCW, and it adds that the home shall not be real property in any form, including fixture law, unless the title is eliminated. If the title has not been eliminated, ownership is based on chapter 46.12 RCW, the vehicle title chapter, so the home changes hands the way a titled vehicle does rather than by deed. License law tracks the same split. RCW 18.85.301(4) permits a commission to be shared with a manufactured housing retailer licensed under chapter 46.70 RCW on the sale of personal property manufactured housing sold in conjunction with the sale or lease of land. Firm licensing and compensation rules are administered by the Washington State Department of Licensing.

Example

Dana and Miguel Ortiz list their Everett house at $585,000. The buyers, the Chens, tour the home and ask for two things that are not part of the building: the stainless refrigerator in the kitchen and the framed oil painting above the fireplace. The Ortizes agree, and the broker writes both items into the Purchase And Sale Agreement instead of leaving them to a handshake.

At closing the escrow officer records a statutory warranty deed conveying the house and the land to the Chens. The refrigerator and the painting are not on that deed and cannot be. Instead the Ortizes sign a one page bill of sale that lists both items, states that they are included in the $585,000 purchase price, and carries the date and their signatures. The Chens receive it with the keys. Two documents, two kinds of property, one closing. If the painting is off the wall when the Chens walk in, they hold a signed writing saying it was theirs. Our walkthrough of what to expect at a Washington closing shows where each document lands in the file.

Common Mistakes and Exam Traps

• A bill of sale transfers personal property and a deed transfers real property. An answer that has a seller deeding a refrigerator to a buyer is wrong.
• A bill of sale is not recorded. Recording exists to give notice about title to real estate, so a question about notice to the world is asking about the deed.
• A fixture passes with the deed and needs no separate paperwork. A bill of sale is only needed for items that were never fixtures or that the parties agreed to treat as personal property.
• A Washington manufactured home does not become real estate just because it sits on a lot the owner owns. Under RCW 65.20.030 it stays personal property until the title is eliminated.