Selling Personal Property with Real Estate

Sometimes when real estate is sold, it involves more than the real estate. Things physically attached to buildings are generally considered “real property”  anything else is not real estate. It’s “personal property.” In residential sales, it is customary for most free-standing appliances, carpeting and window treatments in the property to convey to the buyer, even though they are generally personal property items. Sometimes, specific pieces of furniture are also included in the sale.  As a general rule in real estate transactions, for a sales contract to convey anything other than just the real property (i.e. the land, the structures and the attached fixtures), the agreement must specifically include, by name or description, any accompanying personal property items. In the absence of such specific provisions, personal property items do not convey to the buyer. In a mortgage transaction the mortgage is based solely on the value of the real property.  That being said, if you have personal property included in the transaction the appraiser and underwriter will deduct the assigned value noted in the real estate contract from the purchase price or may assign value to the items and deduct it from the purchase price. The mortgage company will loan money based solely on the value of the real property. Keep this in mind when writing purchase contracts if you're using a mortgage company.