RESIDENTIAL REAL ESTATE CONTRACTS: SECTION 23

This is a brief summary of real estate contracts. This summary does not cover all aspects of the contract. This video has been made specifically for Real Estate Agents to use as an unofficial educational resource. Nothing in this video is intended to convey legal advice or best practices in any field. This video is only intended to give general advice on broad topics relating to contracts and the closing process at large. For legal advice please contact an attorney and for lending advice please contact a lender.

23. FIXTURES

23

Most fixtures are obvious, such as built-in appliances in a kitchen, a toilet in the bathroom, or landscaping like a bush. Certain definitions of fixtures can be debatable, though. Overall, when something is fixed to a property it becomes part of the land and the house itself and therefore goes with the sale.

There have been situations where a seller remodeled the bathroom before a sale and installed new toilets, then during the month before closing the buyer and seller got very petty with each other and the seller ended up removing the toilets and taking them to their new house. Some have also spent $5,000 on landscaping to sell the property and then, the day of closing while everyone is at the closing table, the seller had a company on site to rip out all the landscaping and plant it at their new home. Neither of these situations is legal; once something goes into the ground, it becomes part of the land.

TIP: A refrigerator is one item that can go either way; it can be considered a fixture if it’s built in to the kitchen, but if it’s freestanding then it can be considered personal property. Sometimes in the Additional Provisions someone will state that they want the refrigerator, washer, and dryer to convey with the house since those ones are most commonly freestanding.

One way the seller can request to take common fixtures is by ascribing “sentimental value” to them. Some will assign sentimental value to things like the blinds and will offer to replace them with another better kind if they can take the existing ones with them. This can only be done with permission from the buyer. If it’s a fixture and is part of the reason a buyer is purchasing that specific house, then you have to allow them to have it if they want it.

If your seller wants to remove things from the property that would have otherwise been part of the sale, they are free to do so before the house is listed and under contract. Everything that is part of the house when the contract is signed has to stay part of the house. By removing those things after the contract is signed, you’re deducting their value from the home, therefore altering the value of the home and the existing deal.

Click below to download the documents from this class

contract
notes

Sample Real Estate Contract (highlighted)

Corresponding Notes
Sheet

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Section 24-27:

Seller Warranties
Defaults
Trust Accounts
Arbitration

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