What is the difference between real property and personal property? If you’re a home buyer or seller, understanding this distinction is crucial. And, it can impact your sale or purchase in some pretty significant ways. So, let’s break it down, shall we?
Real Property: More Than Just Land
When we talk about real property, we’re referring to the land and anything permanently attached to it. This includes your home, of course, but also any other buildings or structures on the property. Think along the lines of a garage, a shed, or even that treehouse you built for the kids.
What makes something a part of real property? It’s all about attachment. If an item is physically and permanently attached to the property – like built-in bookcases or that fancy chandelier – it’s considered real property.
Personal Property: It’s Personal!
Personal property, on the other hand, is pretty much everything else. These are the movable items that aren’t permanently fixed to the property. Your furniture, some appliances (if they’re not built-in), and your beloved potted plants are classic examples of personal property.
Why Does This Matter for Buyers and Sellers?
For Home Buyers:
1. Know What You’re Getting: When you buy a home, ensure you understand what’s included in the sale. That gorgeous mirror in the living room might seem like it’s part of the deal, but it could be personal property the seller plans to take with them.
2. Home Inspection Insight: Your home inspection will cover real property aspects, but don’t forget to check the condition of any personal property included in the sale, like the washer and dryer.
3. Negotiation Power: If there’s something you love that’s not technically part of the real property, don’t be shy to negotiate its inclusion in the sale. Purchasing personal property outside of your Real Estate contract may also be done on a Bill of Sale for some consideration. There may be loan implications here, so be sure to consult an experienced Real Estate Professional like yours truly.
For Home Sellers:
1. Clear Expectations: Be clear about what you’re taking with you and what you’re leaving behind. If you intend to take that heirloom chandelier, have your Real Estate Professional state it upfront in the listing.
2. Staging Smartly: Remember, staging your home often involves using personal property to make it more appealing. Just be sure potential buyers know what’s not included.
3. Value-Add Opportunities: Including certain personal property items can make your home more attractive to buyers. Talk to your Listing Agent about throwing in the high-end grill or big screen TV.
A Few Extra Tips:
USE A REAL ESTATE PROFESSIONAL! Seriously – Deals can live or die by whether or not the refrigerator or something else stays or goes, and it’s important to know what and how to create the appropriate documents so all parties are informed and agreeable. Also, Real and Personal property distinctions can vary based on local laws, so how things worked when and where you or your parents bought or sold a house last time may not apply.
Update Your Inventory: Whether buying or selling, keep an updated inventory of what’s staying and what’s going as part of the real estate transaction.
Personal Property Insurance: For buyers, remember to insure your personal property. Just because it’s not part of the real estate doesn’t mean it’s not valuable. And, don’t even get me started on considerations you should have around insurance if you have to do or allow early and/or late occupancy – that’s another blog post.
Understanding the nuances between real property and personal property can smooth out the buying or selling process significantly. As always, if you’re ever in doubt, reach out to a real estate pro for guidance. #LetsMove!
Hey, Wait! So What IS “Real” In That Picture?
Well, as with most things, it depends! But, assuming this house conveys without anything written into the contract, these items are Real Property:
- The structure of the room/house, i.e. ceiling, walls, floors, windows, etc.
- The chandelier
- The window treatments (Yes, really, to the letter of the State of Arkansas approved Real Estate Contract (Residential))
- If the painting is “permanently affixed” to the wall – then, the painting as well
Or, if you’re my husband, I would also accept, “Nothing is Real. That’s an AI generated image,” as a technically correct answer. 🤦♀️