Real vs. Personal Property

We have seen numerous deals over the years hit a snag based on the misconception or miscommunication of what stays with a home and what is leaving with the seller. The answer begins with knowing the difference between real and personal property.

In the broadest sense, real property is ownership of real estate, and the bundle of rights associated with owning the real estate. Another way to think of it is that it’s immovable property, like a garage, a tree, or a permanent shed.

Personal property is ownership of anything which is not real estate, or things which can be moved and are not affixed to the property. Most buyers and sellers intuitively know the difference between what is real and what is personal property.

The lines blur when sellers begin converting personal property to real property by affixing the personal property to the real property. These items are known as “fixtures”. Fixtures, such as ceiling fans, chandeliers, toilets, etc. transfer with the property and the buyer acquires the rights to the fixtures at closing.

When the parties have different expectations and those expectations are not communicated to the other parties, issues arise. The sellers are within their rights to exclude certain fixtures from staying with the home and the buyers are within their rights to ask for personal property to stay with the home. This can all be part of the contract negotiations. The key to transparency is ensuring that all parties are on the same page. A little communication can avoid big misunderstandings.