Selling your home is a huge endeavor -- so big that you might not think of all the details surrounding the sale, such as the home's furnishings. If you're looking to maximize profits, consider selling your furniture, because it's worth something too. But is this the right move for you?
Making a furniture plan
Furniture is often an afterthought in the home selling process. But it's a big consideration and deserves some thought before you list. Here are some possibilities for what to do with it:
- Sell your furniture with the home.
- Bring it with you when you move.
- Have an estate or garage sale.
- List it online, such as on Facebook (NASDAQ: FB) Marketplace or Craigslist.
- Sell it through a consignment sale.
- Donate it.
Let's explore what you should know about selling a furnished home. If you decide that isn't your best option, you can always choose one (or a combination) of the other choices.
Sell your furniture with the home
This method works best when you have furniture people want. For people to want the home furnished, your home with your furniture in it should look as good as a staged home does, so your furniture needs to be in good condition and have a cohesive look that fits well in the home. Also, the rooms should be uncluttered.
Note that if your furnishings are not up to par and you try to sell the home furnished, you might be repelling, instead of attracting, possible buyers. If you're unsure, enlist the help of a professional decorator.
Markets where selling furnished works best
One market where a furnished home is more popular is the second home or vacation property market. More buyers want a furnished home when they're buying the property as a vacation home or as a vacation rental property.
Another market where people might want to buy your furnished home is the luxury market. If you've had custom pieces made that fit in your space perfectly, like area rugs and curtains, and they're high-end furnishings, people might fall in love with your vision and want to buy the entire package.
First-time homebuyers often are interested in buying a furnished home. They might have stretched the budget buying the home itself and would welcome being able to move into a furnished home, making it their own over time.
How to sell a furnished home
An important aspect of selling a furnished home is to make the sale of the home and the sale of the furniture separate transactions. Here are two reasons why.
There will be no comps to determine price
It can be difficult enough to find a house close enough to yours to use for comparison purposes when trying to determine a list price for the home. But try finding an accurate comp for your furnished home, and you'll be hard-pressed to do so, as your furnishings will be unique to your home. By pricing your home and furnishings separately, you'll have solved this problem.
Furniture is chattel
In real estate, there is real property, which is the home and land, and personal property (or chattel), which are things like cars, boats, and furniture. Real property is transferred from the seller to the buyer by a deed. Personal property is transferred by a bill of sale.
When you sell a furnished home, you'll have a deed and a bill of sale transaction. Note you'll need to report to the IRS the furniture you sell as income earned. Also, banks grant mortgages on real property, not personal property, another reason for the two transactions.
Have realistic expectations about price
Many home sellers who have put a lot of money into a home through renovations or remodeling believe they can get back what they spent at least (if not more). That is rarely the case. Buyers pay what the market will bear, not what you paid to get something done.
The same goes for furniture. You probably understand used furniture depreciates. But you might not realize how much. Try using the Splitwise Furniture Calculator for a ballpark estimate. For example, a $5,000 leather sofa, after three years and still in good condition, is worth $2,335 today, according to the calculator. But that would be the price you could likely fetch if you sold all your furnishings separately. If you're selling a furnished home, you generally will need to offer a package deal, which discounts the price even further.
The Millionacres bottom line
Selling a furnished home could save you a lot of hassle, and you can earn some money. Keep in mind that even if selling a furnished home is worthwhile, you'll probably need to discount your furniture's price quite a bit. The convenience factor is worth something, though, as is the savings you'll have from not moving all your old stuff.