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Recent Cases, Real Estate:  April 17, 2013

Should a Homebuyer Include Furniture in a Purchase Agreement?

When a client became wary of his realtor, he turned to Chauvel & Glatt to determine his legal rights as a home-seller.

The client was closing on a home in Hillsborough. The purchase contract provided that the buyer would receive inadequately identified furnishings – and there was considerable confusion in the contract as to the rights of the parties. Our seller client was not sure of his obligations under the purchase agreement, and he didn’t think his realtor was acting in his best interests.

So he turned to us and let us review his contract and provide advice regarding his obligations to transfer furniture to the buyer. We told him the purchase price of his house should not include furniture and advised a separate purchase agreement solely for the furniture.

“If the buyer were to allocate the entire price to the house and have a large amount in furniture,” explained Mr. Chauvel, “he would end up paying property tax for that furniture.”

“A homebuyer doesn’t want expensive furniture in the purchase contract,” added Ms. Glatt. “The banks won’t lend him money for furniture. They’ll lend him money based on what the value of the house is – not what the house is with furniture.”

When a home purchase involves the transfer of expensive furniture, we suggest buyers work with their representatives to create separate purchase agreements for furniture. This act will make the transaction easier to finance, as well as specifically identify exactly what furniture will be required to be transferred at closing.

Has your purchase agreement left your head spinning? Let us know and we’ll work with you and your real estate agent to make this transaction easier to understand and lighter on your wallet.


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