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New York real-estate agent Jason Saft recently sold a one-bedroom condo in the Chelsea neighborhood. At least a dozen comparable units were for sale in the area, including five in the same building. But this property sold quickly and for close to the asking price, while most of the others are still on the market. (Bing: Smart home-selling strategies)
The reason? It came with everything the new owner would need, from furniture to towels and detergent.
"The buyer came a few times and liked the space," Saft says. "But he lived in Dallas and was going back and forth (between the two cities). He wanted something easy. So I spoke with the owner about selling it furnished at the same price, instead of three months down the road dropping the price."
In some markets, offering a condo or town home furnished could set it apart from other similar properties, which could mean a faster sale.
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In southern New Jersey, where Bob and Bobbie Kelly form a husband-and-wife home-selling team, furnished condos sell as quickly as they come on the market. Bobbie Kelly, the real-estate marketing specialist of the couple, says this type of property would appeal to first-time homebuyers and to people who may be downsizing because of a divorce or other circumstances.
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How sales work
Technically, furnishings will not increase a property's list price because they are considered personal property. But "selling a furnished condo could most likely generate more interest than its competitors, and therefore could conceivably be the recipient of a bidding war, which can drive the price up," Kelly says.
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Of course, she notes, that would depend on the furnishings. "If one is selling a condo with new or barely used furnishings that are in today's style and colors, obviously that is much more desirable than someone including an overused teal velour reclining sectional sofa and mismatched tables and chairs," she says. "A condo that is tastefully decorated and appealing to buyers will certainly be the one that will gain the most number of showings and offers."
When a property is sold furnished, the seller should include a personal-property bill of sale that lists each item of personal property included, with each item's price as $0 if it is included in the property's sale price. If a buyer pays the seller for furniture, the transaction would be done the same way, but with the price paid listed for each item. The key is to have a separate agreement on paper, because furnishings cannot be included in the appraisal or loan for the property, and lenders don't want to see any mention of furnishings in the paperwork they receive.
In the case of the New York condo, the owner was an investor and had been renting the unit furnished, so it was an easy decision to include those items in the sale.
"And the buyer saw it as an opportunity to get what he wanted and not spend the time buying everything," Saft says. "It's not easy to get everything in New York. It made complete sense, like buying a hotel room. He could close, go home, unpack a suitcase and not have to worry."
Where to find furnished units
Chicago real-estate agent Fran Bailey says furnished condos don't pop up frequently in her market, but they are out there. In one case, an owner bought a new condo from a developer and furnished it, but then was transferred for work and decided to make the move easier by selling the unit furnished.
Bailey says it can be tough for buyers to find a furnished unit online.
"With the [multiple-listing service] system we have, if they are looking for a furnished rental, the system is set up with that field," she says. "Unfortunately, that doesn't exist when a property is listed for sale." She recommends that buyers work with an agent, who will have access to more powerful search tools to find furnished units.
In Seattle, agent Lin Shih recently sold a condo with furnishings that were passed down through three generations of buyers. All three owners were single men, she says.
For at least one of those owners, the condo was a second home. It's more common for a buyer to seek a furnished residence as a second home, which means more properties in vacation markets are sold furnished.
Finding the right fit
Mary and Ben Russell live in New York but purchased a furnished town home in Murrells Inlet, S.C., last year. Mary Russell says they weren't looking for a furnished place and had just purchased two rooms' worth of furniture at a moving sale. But they fell in love.
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"Ours was not the typical furnished home," she says. "We really had a designer town home with barely touched, professionally decorated contents that caused our mouth to drop. We couldn't afford this quality if we had to purchase it new. I never had a home with more exquisite taste."
The couple put the furniture they had purchased in storage and sold it a few months later. Russell says she thinks that they were in the right place at the right time and that finding a property with quality furnishings that fit a buyer's personal style is rare.
"And the appeal extended to practicality, as being furnished provided us the ability to begin using and enjoying the unit immediately," she says.
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They visit their vacation home twice a year and rent it out the rest of the time. Russell says their guests love the location — and the furnishings.
In markets that aren't hot vacation destinations, furnished condos and town homes make up a much smaller portion of sales. But the transaction can be a perfect fit for certain buyers and sellers.
In New York, furnished condo sales are still pretty rare, but Saft says he "has a feeling it will become a very popular trend in the next decade. The condo boom has really opened up the New York City market, with people coming from overseas and other states.
"This could be the new cottage industry for selling condos."
