Sometimes buyers will make an offer which includes the seller's furniture. Often times this will be for more than the asking price, to accommodate the furni­ture's cost. Usually, but not always, this is a mistake. If a seller has a good eye, the furnishings may make the place ever so appealing. But looking to the furniture instead of the home can be a costly error. The furniture will be old and worn out in a few years and, unless it's truly antique, will be virtually worthless. The home alone, however, if well bought, will appreciate in value.

 

I've seen deals where the buyers have made the purchase contingent on the furniture being thrown in and then offered less than full price, but not much less. For exam­ple, a friend recently bought a home in Honolulu, Hawaii. It was marvelously decorated in a tropical decor. The buyers asked the sellers if they would consider selling the furniture. The sellers said they would, but wanted $10,000 extra for it.

 

My friends checked out the market and felt the home was fairly priced. They then made an offer for slightly below full price, cash to a new loan, and included the fur­niture. The sellers wanted to sell, considered the cost of moving the furniture across the country to Maine, where they were going (and where the decor might not fit), and simply agreed. It was easier to just move on.

 

What's important to note here is that the offer my friends made was for the market price, or close to it. Yes, they might have forced the sellers to lower the price a bit more, but then my friends would have had to go out and spend around $10,000 on furniture. This way they got the house at a fair price (one they might have paid for a sim­ilar home without any furniture thrown in), plus they got a house full of furnishings. Sometimes, not always, it does work out.

 

Be wary of mixing personal property (furniture) with real property (the home) on the purchase agreement when you buy. It can be confusing to both you and the sellers and can mask the true value of the property as far as the lender is concerned. If personal property is included in the sales agreement, lenders may think the purchase price is based in part on furniture (which it may be). Since they are making a real estate mortgage, not a chattel (furniture or other personal property) loan, they may lower the amount they are willing to give accord­ingly. Sometimes a side agreement to buy the furniture works best in this situation.