Thursday, August 1, 2013

What items are included, OR specifically excluded from a home sale?

I am frequently asked -- what items typically are included in the home sale? The answers may seem obvious, but you might be surprised how often buyers and sellers are not clear on what stays and what goes. What is considered personal property, and what is considered part of the "real property", meaning part of the house, or aka, a "fixture." A few years ago, I blogged about a seller who wanted to take a hard-wired fountain and an arbor that was rooted into the ground...

First, I generally refer folks to review paragraph 8 in the California Residential Purchase Agreement; "Items Included or Excluded from the Purchase Price." This paragraph describes what is included or excluded from the sale and formalizes anything out of the ordinary that is included or specifically excluded from the sale.

To quote the language in paragraph 8 of the contract:
"8. Items Included or Excluded from the Purchase Price
A) Note to Buyer and Seller: Items listed as included or excluded from the sale in the MLS, flyers, or marketing materials are not included in the purchase price or excluded from the sale unless specified in 8B or C.
B) Items included in the sale
(1) All EXISTING fixtures and fittings that are attached to the property;
(2) EXISTING electrical, mechanical, lighting, plumbing and heating fixtures, ceiling fans, fireplace inserts, gas logs and grates, solar systems, built-in appliances, window and door screens, awnings, shutters, window coverings, attached floor coverings, television antennas, satellite dishes, private integrated phone systems, air coolers/conditioners, pool/spa equipment, garage door openers/remote controls, mailbox, in-ground landscaping, trees/shrubs, water softeners, water purifiers, security systems/alarms; (if checked () stove(s), () refrigerators;
(3) The following additional items:__________________
(4) Seller represents that all items included in the purchase price are, unless otherwise specified, owned by seller.
(5) All items are to be transferred free of liens and without seller warranty.
C) Items excluded from sale: Unless otherwise specified, audio and visual components (such as flat screen TVs and speakers) are excluded if any such item is not itself attached to the property, even if a bracket or other mechanism attached to the component is attached to the property; and _________________."

Just to point out a few key items in that paragraph...first regarding 8A -- just because the seller and listing agent discussed excluding something from a transaction, that doesn't mean it's actually excluded from the sale UNLESS it is noted in your contract with the party buying the home. You might note in MLS that your antique dining room chandelier doesn't stay, but if it's not in your contract, you will have a problem.

Regarding 8B2 -- you would be shocked how many sellers think it's ok to remove these things after entering into contract with a buyer. Or perhaps they lease their alarm system and can't include it in the sale. Discuss these things with your Realtor up front, or the seller may end up buying out the remaining lease on the alarm system at the last minute so it can be included in the sale to the buyer. Yikes!

To add items into the contract that may not otherwise be included, they need to be specifically included on the fill-in line on 8B3. So for example if you want to include the washer, dryer, and refrigerator in the sale, or a free-standing hot tub, it should be written in there. Include specifics and if you run out of space, reference an addendum.

To exclude an item that would typically be included in the sale, it should be written into 8C. If you received that rose bush as a wedding present and want to dig it up and take it with you, make sure it is written into that space. Or your specially made curtains. Or your dog-shaped mailbox. Or your built-in kegerator. You get the idea...

My typical suggestion to buyers or sellers -- when in doubt, just put it in the purchase contract. It's awful to have to deal with these sorts of disagreements at the close of escrow.

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