Real Property vs. Personal Property – What’s the difference?

When you buy a home, you are buying real estate, often called real property. Real property refers to land and things that are permanently attached to the land. The other sort of property that you may buy is personal property, which is pretty much anything that is movable and not part of the land. Understanding the distinction between the two can help avoid disputes during a home sale.

real propertyLet’s say you own an acre of land that has a house and shed built on the lot. You also park your cars there. The land and the two attached structures are clearly real property, and the cars are movable, so they are personal property that doesn’t come with the sale of the home. Most interior fixtures in a home are also considered part of the real property if they are permanently attached to the home. Sinks, toilets, cabinets, flooring, etc. are all affixed to the home and considered real property. All of your belongings like furniture, clothing and pictures are not permanently attached and are personal property that does not convey with a sale.

There is plenty of gray area on what stays with the house during a sale. Some appliances are built-in, and likely considered real property, while their free-standing brethren are probably personal property. Light fixtures are generally real property, as they are affixed to the house, but what about a hot tub or swing set? Neither is particularly movable, but both may not actually be permanently affixed to the land. Wall-to-wall carpet is affixed to a home, but barely. It is easy to remove, but clearly feels like a necessary part of the home. There is plenty of room for misunderstanding on some of these items.

There are varying local customs for what comes with the sale of a home, and the real estate contracts used in each locale usually spell out areas that may be cause for disagreement. In Seattle, our contracts specify exactly which appliances are included (whether affixed or not). The contracts also spell out that items like wall-to-wall carpet, curtains, window treatments, screens, antennas, fireplace doors/logs, awnings and water heaters are included in the sale by default. If the buyer or seller want something different, they need to agree to it in writing when negotiating their contract for sale.

If you are selling or buying a home, it is important to spell out your expectations in writing for items that will or will not be included with the sale of a home. If you are selling, you should be clear about appliances, curtains or other fixtures that you intend to take with you when you are marketing the home. If you are buying a home, err on the side of caution and make sure that your contract addresses items that you expect to come with the home.