How do we sell appliances and other non-realty items?

“Non-Realty Items” are personal property and can be about anything – refrigerator, pool table, furniture, boats, jet skis…you name it! These items can find their way into a contract on the Non-Realty Items Addendum. If they are more than what is customary (like a refrigerator), these items can be viewed as an inducement to purchase. In the lending world, non-realty items are not typically allowed and have a negative impact on appraisal valuation. Appraisers are trained to appraise real property not personal property. Mortgage loans are long-term financing for real estate property not for personal property. Personal property items are not expected to hold their value for 15 or 30 years making them bad collateral. 

If a buyer knows you have personal property items to sale, or they see items they wish to include in the purchase, buyers weave them into negotiations in an attempt to get them for free or for a nominal amount using the Non-Realty Items Addendum.

If a seller wants the most value for their personal property they should wait until all negotiations are complete before offering them to a buyer. This is typically after the option period has passed. The seller can price the items offering them first to the buyer, if the buyer declines, selling them to someone else.  

If a seller wishes to offer non-realty items as an inducement, they can do so if they are customary and minimal. Refrigerators are the best example. Many first time home buyers do not have one of their own and getting one with a home is a big out-of-pocket cost savings. Offering expensive flat screen TV’s, furniture, media systems, etc. can cause loan problems.

What can a seller do to address the buyer and seller needs and not create a problem for the loan? A separate bill-of-sale could be sufficient. Keep it off the contract and leave the Agents and Non-Realty Items Addendum out of the picture.

Notice: This website contains general information about possible legal and financial matters. The information is not advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal or financial advice from your attorney, accountant, or other professional legal services provider. If you have any specific questions about any legal and financial matter you should consult your attorney, accountant, or other professional legal services provider

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