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A horse bill of sale is a document that formalizes the purchase of a horse between a buyer and a seller, detailing the purchase price and essential information along with the signatures of both parties. This document ensures the transfer of ownership is properly recorded. The video tutorial covers key aspects of horse Bill of Sale forms and advises where to obtain an official template for free. It emphasizes the importance of following best practices when buying a horse, which entails researching sellers, establishing a budget that includes ongoing care, and personally testing the horse to gauge its suitability. Negotiation is also highlighted as a critical step in the buying process.