Tuesday, March 2, 2010

Terminology Tuesday - Bill of Sale



(Sample Bill of Sale). Source: Documatica Forms

(Note: I think it's important to know the terminology and words used when learning any new business including mobile home investing. I came up with 'Terminology Tuesday' as a way to go over the terminology used in the mobile home business. It's important to know the terminology when talking to people in the business so you're all on the same page).

As defined in Wikipedia:

"A bill of sale is a legal document made by a 'seller' to a purchaser, reporting that on a specific date, at a specific locality, and for a particular sum of money or other "value received", the seller sold to the purchaser a specific item of personal, or parcel of real, property of which he had lawful possession".

Definition Link

Simply put, a Bill of Sale is like a receipt the seller provides the buyer at the time of purchase. Think of it more as a receipt for good purchased, just like purchasing items from a store. When you go to a store and buy items, you receive a receipt.

But, that is all it is - a receipt. A Bill of Sale IS NOT title.

Many people confuse Bill of Sale and think it is the same thing as title - it is not. (Notice in the definition above the word "possession" is used, not ownership).

When titling a property for mobile homes (as personal property), the transaction must accompany the physical title (in most cases, some states vary) and be recorded with the local authority in charge of manufactured housing. (Usually, this is as simple as filing a piece of paper and paying a fee).

Without "recordation," in the eyes of the government and the public whoever is in the record database of the local authority in charge of manufactured housing is the owner of the home.

So, before even exchanging funds when purchasing a mobile home you must first make sure you see a physical title from the seller (in most cases, some states vary) and check with the local housing authority as to who their records on who title currently belongs (according to public records) to if you would like to obtain title to the home.

I've spoken to so many sellers who think Bill of Sale is the same thing as title. What I find is that a lot of people I've encountered in this business do not really know the proper way of titling a mobile home.

Most folks assume that if you exchange funds and receive a receipt, then you own the home. (If only it were that simple!) So, then it becomes an education process.

Depending on your area, the process of titling a mobile home will vary. It's a good idea to get acquainted with the local housing authority in charge of manufactured homes in your area so you get to know the process and how things work. It's a great source of information for learning about the industry in your area.

Happy investing!

1 comment:

ranthiv said...

just linked this article on my facebook account. it’s a very interesting article for all.


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