But how much should you charge for the furniture in your home? We asked Redman for her take on what to consider when pricing home furnishings and negotiating with a buyer. We\u2019ll also detail potential pitfalls to watch out for when structuring the sale of a fully furnished home.<\/p>\n Redman says that in most cases, the seller comes up with a starting figure for their furniture. Then the buyer and seller negotiate from there. Here are some tips for homing in on a price:<\/p>\n Set realistic expectations. <\/b>Don\u2019t expect a high resale value for most secondhand furniture. \u201cFurniture is very much like vehicles. The minute you take them out of the showroom, they\u2019ve lost value considerably.\u201d Homeowners often receive less than 50% of their furniture\u2019s original purchase price, Redman notes.<\/p>\n Consider the furniture\u2019s age, condition, and design style. <\/b>These factors all affect resale value. A sold-out dining table from Restoration Hardware\u2019s latest catalog will garner more interest than a stained Ikea lounge chair bought 15 years ago.<\/p>\n Compare pricing on online marketplaces.<\/b> Search websites like Craigslist and eBay for an idea of what similar furniture sells for in your area.<\/p>\n Reference antique price guides and auction websites.<\/b> Not sure if your Chippendale desk has value? Compare values on the Kovels<\/a> price guide, WorthPoint<\/a>, or Ruby Lane<\/a>.<\/p>\n Hire a furniture appraiser. <\/b>It may be worth hiring a professional if you have high-end, high-value pieces, such as rare antique furniture. Contact an appraiser or dealer who specializes in the type of furniture you\u2019re selling. Sotheby\u2019s also offers a complimentary online estimate<\/a>.<\/p>\n Once you have an idea of what your furniture is worth, use that data to negotiate with buyers. \u201cGenerally, the seller has a figure in their head [of] what they want to get for the furniture,\u201d says Redman. But that number isn\u2019t usually what the seller ends up getting, she adds.<\/p>\n When negotiating the deal, keep these factors in mind:<\/p>\n Look at the sale from the buyer\u2019s point of view.<\/b> Find out how motivated the buyer is to secure a furnished home to determine how much leverage you have in negotiations. Buyers looking to have the home furnished quickly are more likely to pay for the convenience of a furnished home.<\/p>\n For example, say the buyers plan to buy the home as a vacation rental. Keeping the furniture in place makes it easier for them to rent out the property as soon as they take ownership, rather than removing it from the rental market to order furniture and redecorate.<\/p>\n On the other hand, if the buyers are planning to live in the home and would rather redecorate the space to their tastes, you\u2019ll probably need to be flexible with your furniture pricing strategy.<\/p>\n Consider how market conditions may influence the deal.<\/b> The real estate market can also come into play with furniture pricing. If it\u2019s a seller\u2019s market<\/a>, with low home inventory and high buyer demand, a buyer may be more willing to meet your price \u2014\u00a0 for both your home and the furniture. But in a buyer\u2019s market<\/a>, where the buyer has several properties to choose from, negotiating a top price can become more challenging.<\/p>\n Sell the \u201csizzle.\u201d<\/b> In some instances, furniture can act as a marketing tool for a home sale. The buyer could fall in love with the furniture, giving it incalculable value. \u201cThat plays a big part in higher-end [homes],\u201d Redman says, \u201cwhere people \u2018buy the dream.\u2019\u201d<\/p>\n If you have next-level interior design skills or hired a professional designer to spruce up your space, some buyers could be willing to pay a premium for design work that\u2019s already done for them. If the buyer \u201cloves the layout of the home and how the furniture fits in it, that becomes priceless in a way to them,\u201d Redman comments.<\/p>\n Redman advises homeowners to work with a real estate agent who has experience selling fully furnished homes. Improperly structuring the sale could cause lending issues for the buyer, putting the entire transaction at risk. We dug into three different methods real estate agents use to structure furnished home sale deals.<\/p>\n Sellers can list the home as a turnkey property<\/a>, with all furnishings included in the sale. In Redman\u2019s market, this is the most common way to sell a furnished home.<\/p>\n When pricing the home, the agent markets the home as a package under a single sales price rather than itemizing the furniture. The agent allots zero value for the furniture on the purchase agreement<\/a>.<\/p>\n The reason for valuing the furniture at zero? When buyers and sellers itemize the furniture\u2019s value, lending guidelines categorize the amount as a sales concession<\/a>. The lender then reduces the home\u2019s value by the concession amount, which could affect the buyer\u2019s ability to complete the sale.<\/p>\n For example, a purchase agreement for $500,000 that includes $25,000 of itemized furniture would result in a lender value of $475,000. When calculating the buyer\u2019s loan amount, the lender would use the lower market value, reducing the buyer\u2019s loan amount. Instead of borrowing 80% against $500,000 ($400,000), the buyer could be limited to 80% of $475,000 ($380,000). Assigning the furniture zero value eliminates the sales concession<\/a> reduction, keeping the lender\u2019s value at $500,000.<\/p>\n But there\u2019s one caveat. The home will still need to appraise<\/a> at the purchase price<\/a>. In our example, the home must appraise at $500,000.<\/p>\n With this method, used less frequently, the seller and buyer itemize the furniture on the purchase agreement.<\/p>\n If this pricing method applied to our example home sale above, the lender would deduct the furniture valuation as a sales concession<\/a> from the property value and reduce the buyer\u2019s loan amount to account for the value of the furniture which they will not include in the loan. The buyer would borrow $380,000 instead of $400,000. To complete the sale, the buyer would then need to contribute an additional $20,000 in cash to the seller for the furniture.<\/p>\n Redman points out a potential tax implication of selling furniture this way: Selling a furnished home could trigger sales tax requirements<\/a>, depending on your local jurisdiction. The seller or real estate agent could collect the sales tax based on the furniture value and remit payment to the local taxing authority.<\/p>\n You can also sell your furniture as a separate sales transaction, apart from the contract on your home. Instead of including the furniture on the home\u2019s purchase agreement, the seller draws up an itemized bill of sale. Then the buyer and seller coordinate payment for the furniture outside of the home sale.<\/p>\n This separate sale would take place alongside but not be incorporated into the sale of the home. The furniture transaction would not show up on the final settlement statement<\/a> at closing. Instead, the seller would be responsible for negotiating the sale of the furniture and collecting the subsequent payment from the buyer.<\/p>\n Is it worth selling your furniture along with your home? That depends. Consider these factors before agreeing to include your furniture with the sale of your home:<\/p>\n![\"a](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/08\/selling-your-house-furnished-666x381.png\")
<\/a>1. Research your furniture\u2019s value<\/h2>\n
2. Negotiate the value of your furniture alongside your home sale<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/08\/selling-your-house-furnished-1-666x381.png\")
<\/a>3. Logistics: Structure the furniture sale carefully<\/h2>\n
Option #1: Include the furniture as a package sale with the property<\/h3>\n
Option #2: Itemize the furniture as a sales concession<\/h3>\n
Option #3: Sell the furniture as a separate transaction, apart from the home sale<\/h3>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/08\/selling-your-house-furnished-2-666x381.png\")
<\/a>4. Think twice before offering to sell the furniture<\/h2>\n
\n
Selling a furnished home doesn\u2019t have to be a minefield<\/h2>\n