How does Personal Property in a Purchase Contract affect Lenders? Why are we talking about it?
Avoid pitfalls when personal property is tried to be made part of a purchase contract
It becomes problematic when it is viewed as a Seller Concession or type of Inducement for Purchase (& Seller just doesn’t CARE and wants it gone!!!)
Lender wants only the house to be the reason for the purchase because the house is what secures the loan.
What are the basic things to know? There Two Types of Property:
1 - Real Estate
Buildings & Land
Real Estate is also items that were purchased as personal property and then affixed to the property. Once you affix it to the property, it becomes a part of Real Estate.
Example: Built-In Book Case become real estate once they are affixed to the property
Example: Chandelier become real estate once they are affixed to the property
2 - Personal Property (Non-Affixed)
Can be defined as property that is not attached or affixed to the property.
Examples: Furniture; Painting; Grill, Lawn-Mower; Dishes, sheets, etc
What are the basic restrictions to be aware of? Any Non-Affixed Personal Property besides the following should be handled outside of the purchase contract
In Arizona purchase contract Lines 56 – 60 Dishwasher; Washer-Dryer; Refrigerator; Window Treatments;
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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST