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A horse bill of sale is a document that formalizes the purchase of a horse between a buyer and seller, recording the purchase price, relevant details, and signatures of both parties. Once completed, it officially documents the transfer of ownership. The video discusses essential information about horse bill of sale forms and provides a free official template. It begins by emphasizing best practices for buying a horse, which is a substantial responsibility. Key steps include finding a seller with a suitable horse, determining a budget that covers space, food, and care, and personally testing the horse's behavior before making a purchase.