Will The Seller Throw In The Ski Boat To Clinch A Sale?
HOME LOANS, TIPS FOR BUYERS, TIPS FOR SELLERS
November 23rd, 2010
A couple weeks back, while showing a home in Redding, a buyer tossed out this question as he was eyeing the seller’s boat parked under a canopy in the backyard. He was surprised when I told him that was not a good idea. In fact, I give my clients this same advice even if they are asking about the fridge, washer and dryer. Mixing personal property with real property as bargaining chips can backfire on the buyer for a number of reasons.
First, the buyer will have the privilege of paying property taxeson the personal property rolled into the purchase price. Let’s say the seller agreed to throw in the $10,000 ski boat in lieu of a reduced price to appease the buyer. The buyer could have taken $10,000 off the price of the home but got a boat instead. Assuming the buyer is not securing a mortgage to make the purchase, the buyer will pay property taxes forever on the value of the boat because it was rolled into the purchase price. Once the buyer gets title to the boat, the assessor will levy a personal property tax on the boat, so the buyer pays taxes twice on that one boat. Adding furniture, appliances, hot tub, plasma TV’s or anything else considered personal property can cause the same problem for the home buyer.
Secondly, if the buyer is getting a loan, the buyer gets the additional privilege of paying interest on the boat purchase since it was rolled into the price of the real estate. If the lender finds out personal property was included in the sale, the appraiser may put a value on the personal property and make a deduction from the appraisal in that amount, potentially jeopardizing the loan.
Thirdly, the seller and real estate agents have a potential headache if the buyer discovers a major problem with the personal property item included in the purchase. If the boat takes on water or the compressor on the fridge fails, the seller or I get an angry call from the buyer.
Bottom line-keep personal property out of a real property purchase to keep the taxable value to a minimum, prevent unwanted interest expenses and warranty issues from arising. I’ve never had a buyer or seller disagree with this explanation as to why mixing the two types of property is a bad idea.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
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