Real vs. Personal Property

Posted by Jo-Anne Larre on Friday, August 16th, 2019 at 11:24am.

 

Both buyers and sellers should make a detailed list of items included in the sale of a property and reach an agreement on disputed items before closing. Most buyers take very little time to look at the “extras” in a home before they make an offer. Consequently, they may discover that beautiful antique mirror in the bathroom they thought came with the house has been loaded onto the moving van and heading to a new home.

Everyone has a slightly different concept of what should or should not be included in the home. Reaching an agreement on the definition of property can be the most difficult part of a sale. Many items can fall into dispute especially if they were special ordered, custom-made, expensive or have some personal significance.

General rules of real vs. Personal property are established to avoid confusion. Real property refers to all items, which are part of the property and cannot be removed without causing damage, anything immovable by law, or anything that is minor or associated to the land. Personal property is simply anything that which belongs to, or leaves with the homeowner, such as tables or sofas.

Legally, the method an article, fixture, or piece of equipment is attached to the property is used to determine if the item is real or personal property. You may be familiar with the rule of thumb: anything screwed in can be removed but items, which are nailed in place, cannot. Since the intention of the owner at the time of installation is almost impossible to determine, it is important that everything be in writing. The seller making a list of their personal property is the easiest way to avoid any misunderstandings.

Once you have completed the checklist and decided which items will stay and which will go should be noted in sale documents. Give a list of all personal property items, which will remain, in the home such as chandeliers, built-in bookshelf, or appliances to the closing agent.  

It's also a good idea for the buyer to make his or her own checklist. House hunters can save time by taking inventory of fixtures and all property, which might fall into a disagreement on second viewing of a home or even at open houses.

Remember that both buyers and sellers can negotiate on property transfer. A seller may be happy to leave a flamboyant light fixture if the style is unsuitable for their new home. Buyers who have their heart set on an item are free to try to work in into the asking price, condition, or sale.

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