I read a post by Paula Hamilton about not selling non Realty items which inspired me to share a couple of tips on what to do when the seller wants to sell the whole kit and caboodle.
While I absolutely agree that non realty items should be negotiated separately and conveyed via a bill of sale, handling this type of transaction is sometimes unavoidable. This comes up a lot in Florida because a large percentage of homes and condos especially on or near the beach, are sold furnished turnkey. What to do in this situation?
Apart from trying to separate the sale of realty and non realty items, other issues and disputes can arise on the actual personal property
For Buyers - I recommend buyers interested in a home that is offered furnished turnkey to take lots and lots of pictures of EVERYTHING, BEFORE making their offer. Over the years i had heard countless stories from associates until one day it happened to me where tv's, linens, and appliances etc had been switched out for lesser quality items with nothing for proof other than he said/she said. My solution: open up anything that contains items that are included in the sale: kitchen cabinets, linen closet etc and snap away. Any discussion or dispute post sale over personal property is then immediately squelched or resolved because you have proof.
For Sellers - If you are selling your property furnished but want to keep a few things, pick up some little round neon colored stickers, go around your home and place stickers on items you want to keep that are NOT included in the sale. The time to do this is before the home is shown to prospective buyers. The best place to display the sticker is facing out so it is obvious at a glance and is displayed if a photo is taken.
Nowadays Photoshop savvy people can add or remove items from any picture, to resolve this i take pictures myself while encouraging the Buyer or Seller to take their own, for their own reference.
As Paula suggested in her post a good way to handle this type of transaction is to negotiate the furniture separately and convey it via a bill of sale. I've found this can at times be impossible to accomplish because the seller does not want or need the furniture nor do they want to move it all back to their home state. The furniture must convey with the sale.
This creates a dilemma for the Realtor, if the property is advertised as furniture negotiable, the seller could get stuck with the furniture if the buyer does not want to negotiate the furniture. Yet it would be misleading to advertise the property as furnished and add furniture negotiable in the marketing comments. Doing so could deter potential buyers from even looking at the property.
Another potential problem is the property may not appraise at the amount negotiated to include furniture and must then be separated and renegotiated.
In my opinion, the best way to handle this is to cover all of these points with the seller prior to an offer. After reviewing closed sales in the area, establish a price based strictly on Real Estate. On a separate paper itemize the furnishings (It is best if the seller prepares this so there is no confusion over what is conveyed with the property) next, establish a REALISTIC range for the personal property. The average life of personal property is seven years, check e-bay and craisgslist to get an idea of what used furniture sells for, adjusting price for age and condition. This way everyone is prepared once an offer is received for your property that is advertised as furnished turnkey. Ego's are less easily bruised and there is a strategy in place to handle the situation should one arise.
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