Times are crazy so Buyers might throw out crazy propositions! They want your home, just as it is, furniture and all. This happens and it is happening more and more often as Buyers are seeking to get a deal. And we understand, it is hard to figure out what to do. Add personal belongings into an already personal sale, and now you have a hard decision ahead of you. So in Southern Athena style, we are going to unpack the whole Strategy for so you can make the best call. Plus, this type of sale condition is becoming more common and has been offered to us many times so we have the personal scoop to share.
You did it, you presented your home in such a way that a Buyer fell in love with it just as you have it. No changes needed, not even in style. Wow, you are Building a Beautiful South! You did such a good job staging it, they just can’t seem to take it any other way. So now they want everything – couch, art, even your grandmother’s vintage dresser. And they are willing to offer above list price to get it. At this point, your ego is so stroked, you may just say “YES!”
But wait….Is this a good deal? Where do you even start?
Our listing FOR SALE at 1100 Douglas in East Nashville has great staging and we always get asked, “Would the Seller be willing to include the furniture?”.
Knowing the value of your belongings may need to come into the equation, but that seems pretty tough to figure. After all, you don’t want to move them, try to fit all of your furniture into a new unknown space, and don’t have time to start all of those spreadsheets and pricing tables with a 5:00 pm Offer deadline TONIGHT. Argg, you are in a tight spot.. Should you say yes? It seems like a Win-Win.
If this is your 1st Offer and/or Above List Price, then we need to talk strategy ASAP because you are in for an even harder decision as both of these scenarios scream “Take it and RUN”.
But wait. Let’s get to the truth of it.
Staged Homes Sell for More and More Quickly
In 2015 the National Association of Realtors put out the following stats: For every $100 invested in staging, the potential return is $400. That’s a Home project with a 300% ROI! Even luxury condos in town are capitalizing on Furnished Sale tactics. Check out our Broker Sneak Peak at the 505 Condos where they are selling furnished condos for + $80K.
Compared to the highest Nashville remodel project, that tops out at a max ROI of 145%, according to the 2018 Cost Vs Value Remodeling Report, that is a crazy great number just for focusing on Staging. But that doesn’t mean that the gained return on your investment should then be negated and include the actual sale of your furniture or rented staging items. Ultimately, even if you invest in Staging, you shouldn’t feel as though the sale price depends on selling those items along with your home.
So you staged your home beautifully. Now you should reap the financial reward because you have an offer AND a buyer that is SOLD on purchasing your home. However, that Buyer is placing a lot of value on the staging (300% to be exact). This is the first hint that selling your home furnished may not be a good deal for you. It should be a tool to get you the highest price for your home, not your stuff. Check out our Southern Athena Staging to Sell Checklist for all of the details!
Distinguishing Fair Market Value vs. Perceived Value
These two are not often the same thing! We see clients all of the time perceive higher value for their homes than others because of the emotional connections people have with their space. They value the memories created there. They value the time and work they put into maintaining their property. In some cases, if the home as been a point of contention or strife, a Seller will just want it gone, even if they have to take a loss, it pales in comparison to the negative value they have experienced there. Take these instances and you can see, that Perceived Value is totally individual dependant and Personal.
Fair Market Value is what today’s market is willing to pay. It is Market dependant. This may not even equal the price paid for the home if the economy is down. Or it may be 3 times as high if the market is doing great. Our Nashville Market Median Home Value has risen 5.5% just over the last 3 months from $281,500 in January 2018 to $297,915 in March.
So if you have a Buyer looking to pay Fair Market Value, it will be independent of your furnishings. As that couch, piece of art, and vintage dresser will all have their own fair market value in addition to their place.
Offering your Home and Furnishings together ultimately discounts both. A Buyer expects to get Bulk Sale Pricing.
We SOLD Furnished and Regretted It
We hear this all of the time when a client decides to move on an offer. This is also most common in the office realm of Commercial Real Estate. And we understand why! After experiencing it first hand, we can tell you:
#AdventuresinRealEstate with Liz Gatlin
A couple of years ago my husband and I decided we needed to move. And even after adopting two dobermans, Snoop & Dre, from a college room mate, the area was fairly dangerous, and our alley behind our house had a tremendous amount of Criminal Activity. We have always been ahead of the curve in Gentrifying areas and this was a great opportunity to cash out AND continue to build the life we wanted with the proceeds.
The Buyers were AirBNB Investors and our home was their wet dream. It was close to downtown, central, new, and could sleep 12+ people. I had worked to rezone a portion of it to get a Commercial Permit for Office use, and knew it could cashflow well for any investor in either the Residential or Commercial arena. They offered us over list price with one condition – Everything Stayed.
My husband was thrilled! He was dreading moving everything with nowhere to put it, and we had an above price offer! I was sentimental about some of my furniture but also knew we didn’t even know where we would be moving so it was hard to imagine how to handle deciding what could stay and what needed to go. Plus it was our 1st Offer, almost always the Highest and Best you will get.
We negotiated and took the deal. Now almost two years later, I realize we could have been a little more diligent. After having to fully furnish another house down to our silverware, I have a better estimate of the actual replacement costs of our furnishings. Without seeing them all together like this, it was hard to tell the fair market value of those sold with our home. Even after discounting the price for being used, we should have squeezed between $10 – 20K more out of them. Bummer. I hate it when I learn the hard way,
I also now understand that this can be a great tool for Buyers to win out on the emotions of a Seller. It’s something that can benefit the needs of both. I also know that every client I have worked with that did something similar, like throwing in the office furniture or equipment, has ended up resenting having done it.
There is another way –
Solution: Negotiate Furnishings Independently
The best way to deal with offers regarding selling your real estate furnished is to separate the transactions immediately. This way, you can negotiate both independently for fair market value under separate contracts. This is a great way to visualize your assets to maximize your profit. By separating your Home and your Furnishings you are able to have a clear head about each and simplify your situation allowing you to get clear on your goals.
Something you can do NOW, before you decide to sell, is to make a list of items you want to move and those you don’t. From this list you should begin one or two things:
- Begin Selling or Donating Items Now
- Begin Pricing Items Out
If you start selling, then you will gain the fair market value and pair down the items in your home for better staging and marketing appeal. And if you begin pricing items out, you will be better informed about the replacement costs, values (high or low), etc, that your furnishings have attached to them. Either way, then you will have more information on the best way to get what you want during negotiations.
And of course you want to SELL with SOUTHERN ATHENA, because of A: We have been there done that, and B: We have your back! You can count on us to strategize your Sale for maximum success. Contact Us Today for more Home Selling Resources and stories like these.
Our awesome featured image is from Brina Blum and her cute dog on Unsplash.