In a residential real estate transaction, personal property is often a big discussion — especially when it’s unclear what people really want to take with them once the deal has closed.

When I think about the common miscommunication between buyers and sellers as to what is or is not included, or a seller’s sentimental connection to the property and some of the items in the home, the image of Navin Johnson and a specific scene from the movie “The Jerk” pops into my head.

In case you are not well versed in or have not even seen the movie “The Jerk,” allow me to set the tone for you. Navin, played by Steve Martin, is leaving the home he shares with his significant other. As he leaves, he states, “And I don’t need any of this. I don’t need this stuff, and I don’t need you. I don’t need anything!”

But Navin doesn’t stop there. He continues, “… except this. And that’s it, and that’s the only thing I need, is this. I don’t need this or this. Just this ashtray. And this paddle game. The ashtray and the paddle game, and that’s all I need. And this remote control. The ashtray, the paddle game and the remote control, and that’s all I need. And these matches. The ashtray, and these matches, and the remote control and the paddle ball. And this lamp. The ashtray, this paddle game and the remote control and the lamp, and that’s all I need. And that’s all I need too. I don’t need one other thing, not one — I need this. The paddle game, and the chair, and the remote control, and the matches, for sure,” he mumbled as he hobbled toward the door, looking disheveled in his bathroom robe with pants at his ankles. He continued, “and this. And that’s all I need. The ashtray, the remote control, and this paddle game, and this magazine and the chair.”

This scene with Navin always reminds me that it’s not until we have to leave, do we really know what we want. And I find this is often true of sellers.

As sellers begin to look around their home, they realize there is sentimental value to the light fixture over the dining room table — perhaps it was given to them by a late relative who procured it from his or her childhood home. The light fixture by definition in the offer to purchase is a fixture. Therefore, it stays with the property. However, if negotiated in the agreement between the buyer and seller, the seller may be able to take the light fixture with him.

Five things to remember when dealing with fixtures and personal property

1. At the time of listing the property, discuss with the sellers which items they wish to have stay at the property and the ones they don’t.
2. Address those issues in the listing contract, or have the sellers remove the items before you take listing pictures and/or begin to schedule showings. 
3. The offer to purchase controls what’s in or out. Fixtures are defined on lines 185-192 of the WB-11 Residential Offer to Purchase. When in doubt, address the item. 
4. Make sure the buyer and seller review the terms of the offer before submission and acceptance, respectively, to ensure they understand what’s in or out of the transaction. 
5. Don’t forget to address rented items — sellers cannot sell what they don’t own. 

So, if the buyer loves the mirror in the dining room, the counter stools in the kitchen, the snow thrower, the fireplace hearth set and the kitchen table, then the buyer’s offer can be drafted to reflect those items as included. The sellers then can decide if they want to include those items or counter to exclude them from the offer.

What is a bill of sale?

A bill of sale is a document used to transfer title to personal property. The WB-25 Bill of Sale is the state-approved form that licensees should use for this purpose. The WB-25 warrants free and clear title to the personal property, except for any liens and encumbrances that are made exceptions. It does not, however, provide any warranties regarding the condition of the personal property. If such warranties are desired, the parties must provide for them in the contract.

Personal property that is being transferred as part of a real estate or business opportunity closing — all personal property included in the purchase price — should be conveyed at closing by bill of sale. If a schedule of personal property has been prepared as part of the offer to purchase, as in a rental property offer, a business offer or a commercial offer, the schedule may simply be attached to the updated WB-25 and referenced at line 26.

How is personal property conveyed from the seller to the buyer?

When personal property is negotiated as part of an offer to purchase, the proper way to handle the personal property would be to declare in the offer the value of the personal property and the real estate separately, and then do a WB-25 Bill of Sale at closing for the personal property. Although the WB-25 does not say exactly what the purchase price is, it does state “for good and valuable consideration.” Any attempt to label the value as $0 when that is not the case could be considered fraud, and a licensee could face discipline along with the seller and buyer.
If a buyer wishes to purchase a boat or car, then the seller would likely have a title to sign like a vehicle, and the title would have a spot to indicate the value of the property.

In addition to avoiding fraud, it would benefit all parties to clarify the value of the personal property. If it does get lumped together with the value of the real estate, the municipal assessor may assess the real estate at a price higher than the actual real estate value, creating a continuing obligation for the buyer to pay property taxes on that amount year after year.

In December 2017, Gov. Walker signed 2017 Wis. Act 110 into law. Act 110 made a number of changes to Wis. Stat. Chap. 452, including clarifying licensees may negotiate the sale, exchange, purchase or rental of personal property when it’s related to the real estate transaction.

To ensure a licensee clearly has the statutory authority to negotiate the sale of personal property when it’s related to the real estate transaction, Act 110 provides:
452.133(3)(d) Negotiate the sale, exchange, purchase, or rental of personal property unless related to the transaction. The licensee may use a form approved by the board under s. 452.05 (1) (b) for the conveyance of the seller’s interest in the personal property. In this paragraph, “use a form” has the meaning given in s. 452.40 (1) (a).

The current form created by the REEB referenced in the statute is currently the WB-25 Bill of Sale.

See “Recently Passed Legislation Opens Up OSL Commercial Cooperation,” in the December 2017 Wisconsin Real Estate Magazine at www.wra.org/WREM/Dec17/OSL relating to a Wisconsin real estate licensee’s ability to cooperate with an out-of-state licensee.
For more information about the advertising changes made to Wis. Stat. Chap. 452 in Act 110, see “Five Things to Know About the New State Advertising Rules” in the January 2018 issue of Wisconsin Real Estate Magazine at www.wra.org/WREM/Jan18/Advertising. 

Resources

• Pages 8-9 of Legal Update 00.03, "Cancellation Agreement and Mutual Release; and Bill of Sale," at www.wra.org/LU0003.
• Pages 9-11 of Legal Update 01.11, "Best of the Legal Hotline: Offer to Purchase Issues," at www.wra.org/LU0111.