Personal property must be deducted from the “selling” price, to reach the true purchase price.
Lenders don’t lend on personal property.
Purchase loans are based on appraised value, with a max of the purchase price.
In above example, if the appraisal was $900K you would need financing based on $900,000K. You would have to pay $100,000 separately for the personal property, and may have to pay sales tax on top of that!
(If appraisal was higher than $900K, you could juggle)
On a purchase, the appraiser will review the purchase contract.
No lender “requires” 80% LTV. Depending on doc type, credit score and reserves, 100% financing is still possible.
IF the home appraised for $1M, the personal property could be included, HOWEVER it should not be listed on the purchase contract.
Property tax should be based on the value of the home.
(not the personal property)
Also, when buyers ask for a seller concession for closing costs etc, as long as the property appraises at the higher amount, lenders will accept a max of 3% or 6% depending on the loan program. That will result in a higher selling price, and property taxes will be based on the total purchase price, as the property did appraise for that.
