top of page

Four Reasons NOT To Sell Florida Real Estate "Furnished" - Part 1

By Christopher Carter - Real Estate Broker Associate

June 13, 2024

Mostly due to the many seasonal residents and second homes in Florida, thousands of houses and condos here are offered and sold Furnished or Turnkey every year. While this might sound convenient for some sellers and could even appeal to some buyers, it complicates multiple aspects of the transaction.

And some of those complications extend long past the sale's closing.

Emptying a house or condo before selling can be time-consuming, inconvenient, and cost money, especially for second home sellers who don't plan on returning to Florida from "up north" before the sale closes. Many sellers also seem to think that offering their property Furnished adds value and makes it more attractive to buyers, justifying a higher price. That is not usually true.

In most buyers' minds, furnished real estate asking prices already include additional costs which they may or may not be willing to pay. If they don't want the furniture, why should they be forced to pay for it, then go through the effort of giving it away or selling it? Maybe they already have enough furnishings for a new place, maybe what's there isn't in their style and taste.

Personal property (like furniture) should never be written-in and added to a residential real estate purchase contract or an addendum to the contract. Even when a buyer wants the furniture and is willing to pay for it, any agreement for leaving personal property in the house or condo should describe that property in a completely separate document unrelated to the contract. The contract's purchase price should never reflect any added or implied value for included personal property.

It is important to recognize that fixtures attached to a residence usually convey without issue. These include lighting fixtures, ceiling fans, window treatments, wall TV brackets, built-in shelving and cabinets, storm shutters, and similar items that are considered part of the house or condo, and specified in the contract's pre-printed language. It is widely accepted that kitchen appliances and water heaters are part of a house or condominium sale.

Laundry washers and dryers are included if the contract being used specifically mentions them (some do, some don't). It is important to carefully read the purchase contract to identify which fixtures and appliances convey with the sale.

Today we are discussing 2 of the main reasons that furniture and other personal property complicate real estate deals:

• Financing
• Appraisals & CMAs (current and future)

In Part 2 we will go into the reasons which result in higher costs to both sellers and buyers in Florida:

• State "Doc Stamps" - transfer taxes on residential real estate
• Property taxes - higher from the start due to inflated purchase price

There is even a 5th reason in some circumstances:

• Sales tax on the personal property's separate value (yes, really)

Also in Part 2 we will discuss a few methods to let furniture and personal property remain in the house or condo without violating all the reasons not to do it!

Mortgage Financing

Banks and Mortgage Companies lend money to buy real estate, not furniture and personal property. In the signed and recorded mortgage document, buyers/borrowers pledge the house or condo to the lender as collateral for the loan. This means if the borrower defaults for any of the reasons laid out in the mortgage agreement, the lender can start the foreclosure process to take back the property.

Personal property can be physically removed from a residence at any time, and lenders need to know that if they have to foreclose, all the pledged collateral for the loan amount will still be there. Houses, condos, and the fixtures attached to them usually stay where they were when purchased, which is not always the case with couches, beds and dressers, golf carts, cookware, or pool deck lounge chairs.

This is where people (usually real estate licensees) complicate things. When they include furniture, dishes, artwork, towels, golf carts, or write "See attached inventory sheet" in the listing, on the contract, or an addendum, the buyer's mortgage lender will likely red flag the deal and require removal of any reference to personal property, causing delays to the closing timeline.

If something didn't have value, it would have been thrown out before the house or condo was offered for sale. Some sellers try to justify including furniture and personal property by saying it is just "for convenience," that any remaining personal property has no contributory value to the transaction. This comment usually involves a wink and a nod between all parties.

Everything has value. There are used furniture stores in just about every city and town charging money for items that used to be in other peoples' residences.

Lenders require independent verification of a property's value (an Appraisal) before approving a purchase mortgage. This is to establish the Loan-To-Value (LTV) ratio, an important measure in their risk management.

To calculate LTV, lenders divide the loan amount by the lower of the contract price or the appraised value. More on Appraisals in a minute.

When furniture and other personal property are included in the purchase price, how much of the loan amount is for the house or condo, and how much is for the contents?

Another reason mortgage lenders don't allow personal property on a real estate contract is that it is often seen as an added inducement to purchase. This means that a seller may have included personal property to "sweeten the deal," encouraging buyers to make an offer they may not have made without the added value incentive.

Appraisals & CMAs

As mentioned above, lenders don't just accept the contract price as a property's current value when committing to lend money. An Appraisal is an independent opinion of current real property market value performed under a strict set of standards and methods by a State-licensed Appraiser. Appraisers apply the Sales Comparison Approach which involves comparing similar properties sold within the last 4-6 months or so (comparables).

For real estate Appraisals, personal property must be backed out of the purchase price when it is mentioned or referred to in the contract. Licensed Appraisers look closely at the transaction details on how those comp properties were sold. Furniture or other personal property on the contract and/or the MLS listing causes them to investigate further and subtract value from the settled sale price in order to give that particular comp an accurate usable value. When there is no stated value to mention personal property, Appraisers put a reasonable replacement value on it, then deduct that from the comp property's contract sale price. Note that replacement cost is deducted (usually higher), not a rough-guessed value for used furniture (usually lower).

Here is an earlier article on property Appraisals: Understanding The Basics Of Property Appraisals -

A Comparative Market Analysis (CMA) is an informal range of probable property prices (not values) prepared by real estate licensees to use when talking with sellers and buyers about asking and offering prices. CMAs use previously closed sale prices from the local MLS. Comparisons and adjustments between the subject property and comps are up to the individual preparing the CMA, with NO strict guidelines and standards like there are in Appraisals. It is up to the individual licensee's discretion as to what properties are similar enough to be used and what adjustments are made between them.

Real estate licensees and online platforms are known to focus on number of rooms, square footage, updates/upgrades, and features rather than closed transaction details. Rarely do Sales Associate-generated CMAs or online AVMs (Automated Valuation Models) take into account whether any comps used were sold Furnished, Turnkey, or with Seller concessions to the deal.

Disregarding closed transaction details can significantly affect CMA and AVM results, and buyers need accurate information when making a decision to purchase Florida real estate. Would they offer the same price if they knew some of the properties used for comparison were sold with furniture?

So far we have briefly discussed current and future valuation problems when personal property is included on a real estate sales contract.

In Part 2, we will discuss additional costs incurred when personal property is made part of a real estate purchase and sale - closing costs, transfer taxes, increased property taxes, and even State sales tax on the itemized personal property. Stay tuned, Part 2 comes out in a week or so.

Editor's Note: Christopher Carter is NOT an attorney. He does not give legal advice. For interpretation and application to specific circumstances of anything you read in this article, you must speak with a Florida-Licensed attorney.

Have a question or comment about anything you see here, if so, visit: (•Parentheses "members" added)

bottom of page