Considerations When Selling Your Home Furnished
If you are selling property, you may want to keep everything in it and bring it with you. But you don’t have to do that. You can also sell the furnishings with the home. There are pros and cons to this strategy, and some things to consider when you make that choice.
Why Sell Furnished?
Selling your property as furnished has a number of benefits, which make the property more attractive to potential buyers. Seasonal buyers who may just want a second home, may appreciate getting a home with the property already there. Some buyers who may be moving from far away, may like the idea of not having to move their property.
You may even be able to increase the purchase price of the home, when you sell it furnished, and increase it more than what the actual value of the furniture actually is—many buyers will not take the time to do a thorough inventory and analysis and valuation of every price of furniture in the home.
If you do want to do this, there are some legal considerations to keep in mind.
The first thing to remember is you will want a separate agreement to sell the property. Yes, you could just increase the purchase price, and add something about the furnishings in the real estate contract. But the problem with that is that now the home has to appraise at the increased value (increased to take into account the furnishings), and it may not do that—and if it doesn’t, including the furniture could kill the entire deal, if it’s all in the same contract.
You’re also potentially increasing taxes and other fees, such as doc stamps and transfer taxes, that relate to the purchase price of the home.
That means you will need a separate agreement relating to the sale of the property. This agreement must be carefully written so that it is incidental to the sale of the property, so as not to trigger anybody owing sales taxes on the sale of the furnishings.
The first step is an inventory—what is exactly included in the sale of the home? Many people want to exclude certain items—perhaps, things with personal meaning—from the sale. Everything sold needs to be included.
What condition does the property have to be in? With a home, a professional inspector inspects the property. But you will need to provide the buyer the chance to inspect the furniture as well if you’re selling it.
You also will need to decide if a problem with the furniture kills the entire deal. If so, be wary—you don’t want a broken arm on a couch killing your entire real estate purchase deal. The better practice is to have some method to resolve problems, alter the price, or have some negotiation process that doesn’t affect the purchase of the entire deal.
Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today for help today with your real estate closing or real estate law issue or problem.