When selling a home, sometimes a seller will want to include certain items of personal property, either:
1) as an enhancement of the terms of the sale, or
2) because the seller would prefer the convenience of not having to pack up and move
furnishings and household goods (or has no place to put or store them).
Where do I include language in the Contract describing personal property to be included/excluded in a sale?
When considering how to prepare the Contract (either the “Standard” or the “AS IS” version), Section 1(d) defines what items of Personal Property are usually and customarily included in a home sale. Any items not included within the standard “definition” can be included explicitly in Lines 21 and 22. You can exclude specific items of Personal Property by utilizing Lines 24 and 25.
How detailed should my description of included personal property be in a sale?
Take great care to avoid being overly general or too restrictive when describing items to include or exclude. Many times, an agent will use the term “turnkey” or “furnished” in Lines 21 and 22 to describe personal property intended to convey with the home. The terms “turnkey” and “furnished” mean different things to different people and can also be a “term of art” with a presumed meaning.
What’s the difference between “Turnkey” and “Furnished”?
A “turnkey” property is typically a move-in ready home that doesn’t require significant repairs or improvements or can be a newly renovated property that doesn’t need additional work. Sometimes, “turnkey” is intended to describe a home that is also fully furnished. “Furnished,” on the other hand, means furniture, fittings, window coverings, and other accessories. When using this term, be mindful that household furnishings usually include rugs, cooking utensils, art objects, and linens (i.e., bath and dish towels, table linens, shower curtains, bathroom pieces, sheets, pillowcases, blankets, comforters, bedspreads, mattresses, and toppers). Using the term “turnkey furnished” can result in a double whammy! Many people often interpret this as including everything in the sale! And by everything, it means everything right down to the knick-knacks in the catch-all drawer – if it’s in the house at the time of listing and showing, then it “comes with.” The buyer just needs to “turn the key” to move in.
How does one deal with items of personal property that are unusual or unique?
Be prudent and avoid uncertainty. Consider giving attention to family heirlooms, such as “my wife’s mother’s rolling pin,” a “baby’s rocking chair given to the sellers by their father-in-law,” an “inflatable bed,” and a “pop-up tent stored in an upstairs closet,” as well as a “second kettle,” a “favorite frying pan,” a “ceramic bowl made by a friend,” and a second set of “fancy” silverware. These are actual instances of disputed items that came up during the walkthrough. Be careful to remember items in the garage – such as bicycles, beach chairs, a beach umbrella, a motorcycle helmet, and the families’ frisbee golf game, not to mention the BBQ grille that does or does not have an associated propane tank. These are also real examples of disputed items that the Contract did not carefully itemize.
Is artwork a part of a “furnishing” or “turnkey” sale?
Artwork (like beauty) is in the eye of the beholder. “Artwork” can be as simple as framed photographs on an end table or wall (notwithstanding that the photos may be of the current occupants) or as elaborate as rare paintings or sculptures. Are crystal glass art bowls, crystal candlestick holders, crystal and china figurines, or an outdoor holiday polar bear statue “art” or “furnishings”?
How can one prevent a last-minute dispute over one or more articles of personal property?
The lesson from this story is clear: whether you are the listing agent or the selling agent, it’s crucial to create a detailed written list or inventory (or a photo album) that accurately represents what you intend to include or exclude from the real estate. While preparing such a list can be tedious – compared to refereeing a dispute on the eve of closing where neither party will concede an article of personal property – an ounce of prevention is worth a pound of cure.* In a perfect world, sellers will remove personal property items from the property before the home is listed, photos taken, and showings held. This approach removes any uncertainty about categorizing items as “turnkey” or “furnished” when they are either not present on the property or stored in boxes marked as “personal, not for conveyance.”
* Benjamin Franklin prophetically counseled Philadelphians over the threat of fires in the mid-1730s that “an ounce of prevention is worth a pound of cure.” Suggesting that preventing fires is better than fighting them.
Should you have questions or concerns regarding the inclusion or exclusion of personal property from a real property conveyance, we urge you to contact or consult your local real estate attorney for additional guidance.
