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A horse bill of sale documents the sale between a buyer and seller, recording the purchase price, relevant information, and signatures from both parties. This official document confirms the transfer of ownership. The video discusses essential details about horse Bill of Sale forms and how to find a free official template. It emphasizes the importance of following best practices in purchasing a horse, as ownership entails significant responsibility. Key steps include locating a suitable seller, setting a budget that includes expenses for space, food, and care, handling and testing the horse, and negotiating the price.