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A horse bill of sale is a document that officially records the purchase of a horse between a buyer and a seller, detailing the purchase price, relevant information about the horse, and the signatures of both parties. This document formalizes the transfer of ownership. The video tutorial discusses key aspects of horse bill of sale forms and where to obtain a free official template. It emphasizes the importance of following best practices when buying a horse, such as identifying a suitable seller, establishing a budget for care, and personally testing the horse's temperament and suitability before finalizing the purchase. Proper preparation ensures responsible ownership.