Real Property VS Personal Property

In the real estate world there are two types of property. There is the real property from which real estate gets it’s name:

all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all “interests” in the property which may be the right to future ownership (remainder), right to occupy forperiod of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another’s property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items.

That’s kind of long and convoluted. Here it is distilled to its essence:

fixed property, principally land and buildings.

Did you notice there isn’t anything about sofas, TVs, or bedroom furniture?  That kinda stuff is what we in the real estate biz refer to as personal property:

movable property; belongings exclusive of land and buildings.

When you’re selling your house and transferring ownership from you to someone else, you’re selling the real estate or real property.

This doesn’t mean you can’t sell you’re personal property, too. Lots of people have garage sales, yard sales, estate sales or whatever you want to call them.

Of course, not everything is salable. Not everything will get the amount of money people want for their personal property.

There are other methods of disposing of personal property, of course.  You can donate it to charity through some pick up services like Donation Nation or you may end up having to trash it.

Maybe The Buyer Will Want It

Personal Property vs Real PropertyThis is the path a lot of home owners take and it is the absolutely wrong path to take.

I have gotten sucked into personal property negotiations more times that I care to remember and each time I swear I’ll never do it again.

My most recent adventure involves selling a house that had been owned for decades by the sellers.  The real estate was priced competitively, it was in a good location and it got a couple of offers that were attractive.  What made the winning offer most attractive was the buyer’s offer to “take everything” in the house along with the house.

Oh, sure. They would be willing to pay for the stuff. After all some of it was legitimately valuable. A backup generator for the house, riding lawn mowers, lots of furniture (some better than others), a nice flat screen TV and more. However, when the seller came up with a price for all the personal property that was being left behind, the buyer got a little bit of “buyer’s remorse”.  Now, they want to review all the stuff they supposedly wanted to “buy” from the seller.

Real Property VS Personal Property Value

For us real estate types, it’s fairly easy to recommend a selling price for the real estate. We have lots of data we can rely on to guide us to a price range that’s pretty accurate.

Personal property is another story. I have no idea what a 60″ flat screen that’s two years old is worth. I have no idea what 20 year old dining table is worth. Plates and dishes? No clue. Carpets? Beds? Etc.?

You see where I’m heading with this?  One person’s treasure is another person’s trash.

Get Rid Of Your Personal Stuff

So my recommendation is that when you’re getting ready to sell your home, get rid of your personal property. Clear it out. Dispose of it.

In fact, the Contract of Sale (in Maryland) speaks directly to this:

At settlement, Seller shall deliver possession of the Property and shall deliver the Property vacant, clear of trash and debris, broom clean and in substantially the same condition as existed on the Date of Contract Acceptance. (emphasis mine)

Did you catch the part about vacant, clear of trash and debris? That’s all your personal property. The only thing the buyer is buying is the real property.

It might be OK to leave a garden hose or a ladder or maybe some paint cans with the paint colors you just used to paint the house. The safe thing to do is just to make sure the house is as empty as possible and deal with the personal property way in advance of moving out. Way in advance.

About Ken Montville

Ken Montville is a Realtor® and Associate Broker with RE/MAX United Real Estate in the beautiful Maryland Suburbs of Washington, DC. He has been selling nice homes since 1999. Way back in the 20th Century.

When Ken Is not doing the real estate thing he can be found all over social media in places too numerous to mention and he listens to jazz, reads a little (mostly non-fiction), hangs out with the Rotary Club of Parole (Annapolis), MD and can be found blogging at MDSuburbanHomes.com