One of my golden real estate rules is never negotiate on the personal property at the same time you’re negotiating on the price of the home. Not only can that create some real hard feelings between the buyer and seller, it can even kill the sale. It happened to me twice on the same home which I’ll share later.
What’s Considered Personal Property?
Think of anything owned by the seller but not attached to the home. For example, a lawnmower, furniture, paintings, etc. Those are not considered part of the real estate but sellers are sometimes eager to sell it to the buyers.
Why Not Just Roll the Personal Property in With the Price of the Home?
- First and foremost, personal property artificially inflates the contract price of the home putting the lender at risk. The buyers wouldn’t have paid that much for the home if the personal property wasn’t part of it. Lenders don’t want to see any mention of personal property on the contract. They are providing the loan on the home, not the furnishings.
- The buyer and/or seller can get their feelings hurt. The buyer might believe they’re paying top dollar for the home so they want a “good deal” on the personal property. The seller might believe they’re selling too low so they’re darn sure not going to “give away” the furnishings they paid good money for. Now you’ve just added another layer of negotiations and have made the negotiations on the home that much more difficult.
So When and How Should You Negotiate Personal Property?
I’d wait until the option period has expired. The buyer has done their inspections on the home and they’ve reached an agreement on repairs to be made, if any. That’s the time to say “OK, now let’s talk about the personal property”. Nine times out of ten the buyer and seller will come to terms on the price, but it’s no longer about the home. It tends to diffuse the personal feelings. They can execute a personal property agreement outside of the contract.
The Cabinet That Cost Me A Sale
I was listing a home in the $1.5 million range in Fairview. In the living room was a very nice cabinet that fit perfectly against the wall from one side to the other. It really looked like it was built in.
When the offer came in, the buyer asked the seller to “throw in” the cabinet to make the deal. The seller took umbrage to that request and said no. The buyer then came back and offered to buy it. The seller said no again. The buyer in his final appeal asked if the seller would throw in the kitchen table. It was obvious the buyer just wanted to feel like he’d won the negotiations and my seller was now understandably upset. Long story short, that deal never happened.
The ironic thing is if the buyer had offered $10K less from day one and had never made that darn cabinet part of the deal, we probably would have sold the home. But once egos come into play, money almost becomes less important.
That Same Cabinet Almost Cost Me A Second Sale
A month or so later, the second buyer comes along. I told the agent right up front we had come close but not been able to make the deal because of the cabinet. I made sure he knew that was a sore topic with this seller and to please not make it part of the negotiations. This buyer said he didn’t even like the cabinet so it wasn’t an issue.
We placed the home in title and sure enough, the buyer decides they really do like the cabinet. They want the seller to throw it in in lieu of repairs. My seller is now understandably exasperated and again said no, nor did he want to sell it. Luckily, we made the deal anyway.
Oddly enough, shortly after the closing the seller asked me to ask the buyer if they’d like to buy the cabinet and to make him an offer. WTH?