Making Sense of Personal Property Clauses in Real Estate Contracts: What You Need to Know Before Closing

Including Personal Property in a residential real estate contract is not only common, it’s expected. In fact, both versions of the FAR/BAR contracts used in Florida real estate spell this out clearly. These contracts have a section listing standard Personal Property items that are presumed to transfer with the sale—unless the buyer and seller agree in writing to exclude them.

More importantly, the contracts state that Personal Property is included in the Purchase Price, has no separate value, and should remain at the property for the Buyer. In simple terms, these items aren’t priced out individually; they’re just bundled into the overall sale price.

But here’s where things often go sideways: sections 1(d) and 1(e) of the contracts, dealing with what’s included and what’s excluded, are frequently glossed over. This oversight can lead to headaches, especially toward the end of the closing process, when emotions (and timelines) run high.

To help avoid some of the most common pitfalls, here are a few important tips when it comes to handling Personal Property in your residential contract:

1. Be Cautious in Financed Deals

If your Buyer is using a conventional loan, it’s best practice to avoid assigning a dollar value to any Personal Property. For example, let’s say the Seller agrees to include furniture in the deal for an extra amount above the sale price. That arrangement shouldn’t go in the contract. Instead, draft a separate Bill of Sale that outlines the terms outside of the closing process. Lenders typically won’t allow Personal Property to be factored into the loan since their interest is in the real property, not the stuff inside it. Including it may cause delays or require you to revise the contract entirely.

2. Think Twice Before Saying “Turnkey Furnished”

This phrase might seem straightforward, but ask ten people what “turnkey furnished” means and you’ll get ten different answers. That’s a recipe for miscommunication. Buyers often show up to the final walkthrough expecting more than what’s been left behind—and disappointment can quickly turn into conflict. A smarter approach is for the listing agent and Seller to create a detailed inventory of exactly what stays and what doesn’t. That way, there’s no ambiguity and both parties have a clear reference point.

In Summary

The Personal Property sections in residential real estate contracts are often an afterthought, but they shouldn’t be. Failing to pay attention to them is one of the most common and avoidable mistakes we see in real estate transactions.

The two issues above are just the tip of the iceberg, but keeping these tips in mind can help you steer clear of last-minute surprises and make for a much smoother closing.

Have questions about Personal Property or need help reviewing your next real estate contract? Reach out to a trusted real estate attorney. It’s always better to ask early than to fix things later.

VISIT US