You’re selling your home or condo in Florida and moving back North to be near family. You own a boat, a convertible car that’s fun in Florida but could never handle ice and snow, and 2,000 square feet of furniture, and you want to sell it all rolled into the sale price. Sounds easy, right? Maybe if it’s a cash deal, but if your buyer is applying for a mortgage, it can be a little more complicated.

As we know, second homes and vacation homes in Florida frequently come furnished. If the buyer is purchasing the property for cash or is paying the seller separately for the furnishings, there is no problem, but if the buyer is obtaining a mortgage, it could raise a red flag to the bank appraiser.

Typically, the lender will not object if the furnishings are not above the home’s appraised value. This usually works fine, unless the furnishings are designer level high end items that have added substantially to the purchase price. In that case, the lender will back out the estimated value of the furnishings, set the purchase price lower and grant a mortgage based on a percentage of the downgraded purchase price.
What’s included in the sale of a property is sometimes subjective, and in the case of mid range homes and condos, properties are sold without it ever becoming an issue. Usually lenders will include in the loan personal property if it is either physically attached to the property or something that would normally go along with a sale. For instance, refrigerators, draperies, light fixtures and other appliances are considered fixed, but sofas and tables, even if they were specially designed for the space, are not.

Even more difficult to roll into a mortgage are boats and cars, which are viewed as personal property by lenders and need to be excluded from the purchase price. In addition, these items are subject to local and state sales tax that can’t be ignored. And if a buyer is applying for both a mortgage and a boat or car loan to finance the personal property items he wants to purchase, it would affect his debt-to-income ratio, possibly impacting his ability to qualify for the mortgage.

So as you can see something as simple as a package deal on the sale of a property turns out to be not so simple. My advice is to negotiate separately for personal property when selling your home; it keeps the transaction a lot cleaner without involving lenders and real estate agents.

On another note, I read recently that the poor people of Flint, Mich., whose drinking water is contaminated, are facing another problem. Several large lenders have announced that they will not be approving loans for homes that don’t have potable water.

This is not the first time this has happened in other parts of the country. After other disasters like fire, earthquakes and hurricanes, lenders frequently adjust their requirements involving the condition of a property before approving a mortgage. Lenders generally require that a home meet certain minimum stands of livability, and unfortunately, for the residents of Flint who are attempting to sell their homes in an already depressed market, this is just one more nail in the real estate coffin.

The message here when selling is to keep personal stuff separate from the property value and hope there are no disasters man-made or otherwise. Oh and one more thing – why are you moving back North anyway?