Home being sold furnished

[Jonathan C]

Got an order for a SFR being sold furnished. Contract states "other personal property included..." ALL FURNISHINGS LEFT IN THE HOME. The MLS listing for the subject states home is being sold furnished.

I'll probably remember what to do, but its Sunday, it's late, I'm tired and feeling lazy. I appreciate any advice. Hope everyone is doing peachy.

BTW- this order is a full fee, not an AMC crapaziod.:new_smile-l:

 

[Tom Woolford]

Ignore the personal property. You are a Real Estate Appraiser. Its not your job to place a value on used furniture. If your value comes up less than the contract price with the furnishings, so be it.

 

[SpartanAG]

I get those every now and then. I make sure the lender/client understands that I'm a real estate appraiser only. If they want the personal property valued, they will have to contract with someone who can value personal property.

 

[Michigan CG]

You are appraising the Real Estate only. the personal property does not matter. In this case the personal property is furniture. It is no different than if the personal property was a Mercedes.

Nobody makes a 30-year loan on a couch or a Mercedes.

Disclose the PP and state that the value of those items are not included in the report.

 

[Jim Hill]

How about the comps

Here in Florida it is very common in many areas to include the furniture and just about everything else that's in the home.

Many times when snapping a picture of a comp if a homeowner is standing outside I stop and explain why I am taking a picture of the their home and since I am talking to them I mention that the home sold for whatever the price was was and at least 50% of the time they would tell me that was the price with either the car, furniture, or some other things included such as a years taxes.

We all take plenty of comps with us but more and more in order to get homes sold people are making all kinds of concessions these days. What comps are you using?

The big problem I have with programs like Zillow is that they just report the sales price that is listed for public records and they never know about all the other stuff that was included to get the home sold. I have $25,000 dropped into deals to make them work.

Our market today is a world away from the market we had in 2006!!!!!!!!!!

Jim Hill

 

[Financially Feasible]

It may state on the contract the allocated "value" of the furnishings being left behind. If not, talk to the agent. In reconciling your value opinion, you'll want to mention where your value falls in comparison to the RE-only price in the AOS. Aside from that, everyone else is absolutely correct - you are not there to value the personal property, only the RE.

With regards to the personal property of any comparables, this is a part of the verification process. Call the agent/broker and find out what, if any, concessions or inclusions were being offered. If personal property is being included, it is a downward adjustment in the sales grid. Sometimes I have found that the recorded deed price has been slightly lower than the MLS sales price. 100 times out of 100, the agent/broker verified that the difference in the two prices was the personal property. In these cases, buyers will not record the total contract price (including furnishings) because they do not want to pay transfer tax on non-realty items. Again, this is part of the verification process for the comparables.

 

[J Grant]

State something to the effect of "Although furniture is included in the contract along with the house, the appraisil does not include any value of furniture in the report"

 

[RSW]

Tom is correct. We have a lot of overnight rental cabins in the Gatlinburg, Pigeon Forge, TN area that are sold fully furnished. Many appraisers around here have no idea how to appraise them. The don't even mention the PP and the lender thinks they are loaning on the real property. I, on the otherhand find comps that have sold unfurnished so that I can abstract the real property value from the market. It usually takes about six sales and several listings to do so. Just make sure you note that the subject is being sold furnished and that you are not considering the PP in the final value opinion.

 

[J Grant]

Sometimes there are good comps that are furnished. If so, see if the furniture added to the price. Sometimes the new buyer essentially pays nothing for the furniture, in which case you can explain it was included but added no value to the price of a comp. If per paired sales it added value, adjust for it. I don't trust a realtors value of furniture, they don't know anymore than we do what it's worth (if anything). If furniture added anything to price over an unfurnished sale you'll see it in the price of paired sales after all other adjustments are made.

 

[Peter LeQuire]

What has been posted above is on point and correct. However, we're also required to "analyze" the current purchase agreement. There may be differences of opinion about what is contemplated by the word "analyze" but it seems to me that analysis of the contract ought, at a minimum, address the fact that furnishings are included and the perceived effect on price of those furnishings. There are times when the influence on price of furnishings is substantial, others in which it is not discernible.

For example, furnishings are essential to the operation of a large rental cabin in Pigeon Forge, and the effect on price might be significant. OTOH, the price of a cabin not used for rental purposes, it being a weekend/vacation second home furnished with cast offs and thrift store purchases, might show no influence on price because of its being furnished.

Were Jimminy Cricket addressing appraisers, he's chirp, "Always let your market be your guide."