Special offer

Personal Property in Real Estate Transactions - a different side

By
Real Estate Broker/Owner with Benton, Linn and Douglas Counties Call Terri today!

I recently read a blog post concerning Personal Property in a transaction.  The situation was comical and I do appreciate her take on why personal property should not be included in a transaction.  And, I read through several comments from agents who also agreed.  

While I am not trying to be disagreeable, I sell real estate in the real world and know that there are times in which personal property does become an important part of the transaction, whether value is assigned or not.  

Oregon allows agents to list personal property to be included in the contract, without value.  Usually, those lines are filled with items that are inclusions on the MLS (i.e. stove, refrigerator, outdoor lawn furniture, etc...).  However, there are times in which buyers want that custom made mirror that cost thousand of dollars, or that farm equipment.  They may even want that car in the garage.

So, to me, the real question is, how is the best way to handle personal property when it does become important to the buyer.  

I know, I know, a good agent will educate their client well enough so that personal property should not become in issue to the transaction. And yes, normally, the value compared to the transaction value is so minor, but we are dealing with people and their emotions during one of the largest dollar investments in their lives.  

I recently sold a small hobby farm with some small farm equipment, and a small cabin that was not attached to the property.  The cabin was declared in the listing as personal property and had great sentiment value to the seller.  I represented the buyer.  

This was one of those emotional transactions because it was a brother and sister acting as sellers of their deceased parent's property that had been in the family decades; the buying couple had several small children and were expecting (hormones) and they wanted to raise their family in the country...

As they were negotiating the personal property items, there were very intense times in which the deal could have gone sideways.  Thankfully, the listing agent was mature and solution oriented instead of problem instigating (Yes, we all know those agents) and we were able to work through a very high and emotional transaction.

Some items were addressed in the contract because they were included in the listing.  We then asked the seller (via email not in the contract) to supply us with a list of additional items for sale with the price.  My buyer was able to choose which items, negotiate a lump sum and everyone agreed that the money exchange would be after closing but those items would remain on the property.

Now, to add even more "drama" to the situation, the sellers retained possession of the barn and out buildings AFTER CLOSING.  Yes, it was sticky because we had emotional sellers working with emotional buyers after closing. So even after closing, personal items were being negotiated.  In the end, it worked out and now all the parties are friends.  I had to gently keep reminding my buyers what they agreed to via the contract and keep encouraging them to do the right thing.  

I have represented many buyers that would like for some personal property.  And sometimes it is a deal  breaker for the buyer if they don't get it. We have to acknowledge that there are times in which personal property are important to buyers.  We do our best to keep personal property out of a transaction and I would never recommend including any type of negotiations about personal property in the contract, however, when those times do arise, as they will do, we need to handle them with maturity and skill.  We are paid to be negotiators, right?

Kudos to all those mature problem solving agents who don't get caught up in the emotions while representing their clients.  

I would love to hear any tips from the pros.

 

Servicing Santa Cruz and Monterey Counties, Monterey Bay, Aptos, Watsonville, La Selva Beach, Pajaro Dunes

Thank you for reading my blog.

 

Comments (4)

Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Colorado Broker / Referral Services

Terri, what an intriquing process.  Yes, we DO keep personal property out of the "financed" transaction.  No sense in the buyer having to explain to their lender why they are getting thousands of dollars of personal property with a real estate home loan.  We all know the end result of that... BRING CASH to the closing to make up the difference. 

You are right to keep that out of the real estate transaction, and let the buyer and seller negotiate outside of the real property transaction and they can create their own bill of sale and tender process.  I do find it interesting that the sellers kept the barn and outbuildings... I am sure the removal of those created some interesting interaction.

Apr 03, 2013 01:54 AM
Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

Terri, I appreciate your other side and view point.

I still maintain personal property should be handled as a seperate issue from "real" property. In the situation, that I describe in my post. The buyers wanted to basically "steal" the car at a low ball price and force the seller to convert that money to a repair issue. 

They were essentially black-mailing her to sell the car under-value. I appealed to the common sense of their agent, and tried to convey things professionally to my client . When the other side got personal and petty - I left that out of the communicaton process to avoid fanning the flames.

With that said, I have had many successful "chattel" transactions during sales. I convey the information to the seller or buyer and they create a bill of sale - that doesn't cause issues with lenders or title. Obviously, it's easy to add a refrigerator or washer and dryer to a sales price and that is a less complicated scenario - even though the items are personal property.

Love the dialog and thoughts from you. It's fun to explore different opinions. :)

Apr 03, 2013 02:24 AM
Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

By the way, I have added a link your blog post in my comments section to encourage others to read your "perspective." I see you're a new member and I welcome you to Active Rain. I can tell you are going to be a wonderful addition to this community of Real Estate pros.

Apr 03, 2013 02:29 AM
Terri Woods
Benton, Linn and Douglas Counties - Days Creek, OR
Selling Homes and Land in Oregon

Hi Debb -

Thank you for your response. Yes, there is always more to the story so I do totally agree that if at all possible, leave personal property out of the transaction.  As we know, there are NO cookie cutter transactions.  :)  I did laugh when I read your blog because I can just see myself in this situation.  And my deal was crazy - with any other listing agent I think the deal would have crumbled.  I so appreciate working with great agents.  That is worth GOLD.  

Apr 03, 2013 02:39 AM