“Real property” is the land and everything that connects to it. That includes the dirt, the trees, the house, the pipes in the house, the sinks at the end of the pipes, the wires in the wall, the light fixtures at the end of the wires, and all else that its “affixed” to the home and land.

“Personal property” is any item not affixed. This includes the furniture, art, rugs, dishes, shovels, cans of paint and gym equipment. Some items are borderline affixed and need to be worked out in a written agreement at the time of contract. These items include wall-mounted televisions and planters with attached drip lines.

Personal property can make an otherwise straight forward transaction go sideways. The buyer thought the seller would leave the trash can that fits in the pull out kitchen trash cabinet or the microwave the fits perfectly on a kitchen shelf. On move-in day, those items are gone and the buyer feels cheated. Avoid this problem by writing in the sales contract what items are included in the sale.

Personal property can be introduced as a bargaining chip during the due diligence period. After the buyer’s professional home inspection, she learns that the roof needs to be repaired. Instead of asking for the seller to fix the roof, she will schedule repairs herself after she owns the house. She wants compensation for this unforeseen issue, however, so she asks the sellers to give her the living room furniture at no cost. This is a common practice, and can be a win-win for both parties.

The buyer benefits because she gets furniture that suits the home. She no longer has to purchase furniture for the room, so she can use the saved money on the roof repair. She can choose her own roofer and monitor the repair. The seller benefits because he does not have to bother with repairing the roof while preparing to move, besides, the living room furniture may not fit the seller’s next home anyway, whether space-wise or aesthetically. If this win-win is used as a solution to repairs, it is important that the living room furniture is carefully itemized. The buyer and seller may have different ideas of what is included.

Second home buyers often buy a home with all the personal property included. In this case, the personal property should be placed on a separate Personal Property Sale Agreement, and photographed or videoed. The personal property should not be included in the contract to purchase the real property. A home’s entire contents is a large transaction, and is better kept separate for two reasons.

• The Personal Property Sale Agreement must include an itemized list of the personal property being sold. This is done in words and pictures, and can be a fairly lengthy document when complete. Both parties sign the Personal Property Sale Agreement, verifying their agreement. The wording of a home purchase contract is directed to the purchase of real property. The wording of a Personal Property Sale Agreement concerns the purchase of personal property. As both purchases are sizeable, they should be kept separate. This separation prevents over complicating the purchase of both real and personal property. A Personal Property Sale Agreement states that the sale is concurrent with the sale of the real property sale. If the home sale falls apart, the buyer does not want to be forced to buy the personal property. See the Resources Page for a Personal Property Sale Agreement.
• The second reason to keep the purchase of the home’s personal property on a Personal Property Sale Agreement is financial. If the amount being paid for the personal property is added to the real property purchase amount, then the agent’s commission is based on a higher amount. By keeping the purchases separate, the commission payer saves money. In addition, lenders will normally refuse to loan on a contract that includes personal property in the purchase price. Lenders are offering financing on real property, not personal property.