In real estate, the terms "real" and "personal" property come up regularly. What exactly do they mean? REAL property is land and everything permanently (more or less... Father Time has a tendency to assure nothing is really permanent) attached to a piece of land, like buildings, trees, or that maypole you installed that was inspired by the local Renaissance fair.
This is where the term real estate comes from. Sometimes things like crops are considered "personal" property, but that's another topic for another day.
Personal property, on the other hand, is anything that's not real property. This almost always includes everything that isn't real property. Got it?
Excellent!
The Hot Tub Saga
Way back at the turn of the millennium, I was a young high school teacher in Michigan purchasing my first house with my practice wife (aka "first marriage".) We had hired an experienced agent as our buyers' agent to help us find our dream house. After searching through the MLS (that's the database we use to list houses for sale), we identified about seven houses that met our criteria.
We toured all seven. None were spectacular, though one house was interesting. It was a 2,200 square foot house that took up the entire lot. The only other space not occupied by the house was narrow driveway on one side... which happened to be the opposite side of the house where the door was located.
It was one of the dumbest designs ever.
Anyway, since it was the cream of the crop, we were preparing to make an offer. Hours before submitting the offer, another house came on the market. It was owned by a couple that both taught in my same school district. We decided to hold off on the offer for a day and look at this new house.
We were glad we did.
The new listing was spectacular. It was filled with ornate, turn of the century woodwork and thick oak floors. We fell in love instantly. The best part? It had a hot tub on the deck in the back yard. In Michigan at the time, that was a bit of a rarity in our price range. I absolutely love hot tubs, especially those that aren't communal. What can I say; I like being naked. The hot tub was listed as a feature of the property on the MLS, so we assumed it was part of the deal. It looked something like this:
We decided to write an offer for the new listing. Because we had already looked at every house in the price range, we knew this was undoubtedly the best of the best, so we wrote a full-price offer. The sellers were ecstatic to receive a full-price offer (in a buyer's market at the time) in a matter of hours. In fact, they were so excited, they decided to submit a counter-offer for the same price but without the hot tub.
Needless to say, I was pissed. I wanted that hot tub, damn it! Our agent went to bat for us by arguing that the hot tub was a fixture, which is personal property that's attached to the real property, much like a furnace or dish washer. They were arguing that it wasn't a fixture because it was only wired to the house, not actually secured to the deck.
Their agent, sensing this particular house was the best in the price range given our immediate interest, wisely advised the sellers to wait and see if more offers would be coming in.
We were kinda screwed.
Even though the hot tub should have been included given it was included in the MLS listing, we knew fighting for it legally would be an expensive endeavor that may cost us the house. We relented and allowed them to exclude the hot tub from the offer because we really wanted that particular house. The sellers, feeling bad for the whole issue, let us "keep" the hot tub for a few months before moving it to their new house.
The Lesson Learned
The loss of the hot tub taught me an important lesson about the difference between real and personal property, and what is considered a "fixture" that would normally be included in the purchase agreement. The rule of thumb: If it's permanently attached, it's real property. If it's movable, it may be considered a fixture in which case it's negotiable (like in the case of the hot tub.) If it's not attached, it's considered personal property. If it's considered personal property, it could still be included in the purchase, but I would recommend the sale be executed separately from the real estate deal.
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