Home Buying in Dennis>Question Details

Meg, Home Seller in Dennis, MA

We are going to put our home on the market and have two questions. One about rental income and the other about "furnished" sale.

Asked by Meg, Dennis, MA Mon Aug 6, 2012

This fall we are putting our Cape Cod home on the market. We are wondering if these items below can present any problems.

Our home is an exact duplicate to my brothers home next door except for decor and landscaping (just plantings) . Believe me when I say exact. Our dad built them both. He rents his and has slightly older more durable furnishings and our home has significantly better landscaping)
We do not rent ours).
He earns approx 35-40K annually for seasonal rentals. If we offer our home and in the listing say that it has the potential to earn 30-40K in rentals is that overstating or fibbing? Also, is it some sort of red flag for the IRS as we have never rented.

2. Also we are selling furnished (all furniture) but wish to remove many of the artwork and some decorator items. Is this the norm or do we need to disclose this.

Thanks
Meg

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Answers

9
Hi Meg,
I don't know if you have already listed your home or not but I thought I would give you a response. In regard to rental income I would not overstate the potential income. It would be best to get a professional opinion on the current going price for seasonal, yearly , and winter rentals. Also, if possible, have some evidence of what your brother is getting.
As for the furnishings, if the buyer is purchasing the home as a rental property or 2nd home then offering the furniture is a plus. If the buyer is buying it solely for personal use then it is often a negative as they may want their own choice of furniture.
If you need any further help please contact me. I would love to get your home sold.
0 votes Thank Flag Link Wed Oct 23, 2013
Hello Meg,

As Sellers Agents we take into consideration all the advantages and possible disadvantages of the home - then we market accordingly, there is no one formula as each home should have it's marketing customized to that property.

As Buyers Agents we know what Buyers are looking for in the market today and know to set up the home to appeal to as many people that may be attracted to such a home. We stage the home with the owners belongings, so I would advise to take out any personal Items prior to selling - especially photographs of family and friends. It is very important to Create a Neutral Space - so the perspective Buyer can imagine themselves in the home and not be distracted with personal items.

As Investors, we know what appeals to a Buyer looking to earn an income and have their mortgage paid by the rental income - we understand the tax liability and possible issues as a landlord and can answer any objections in a professional and positive way.

There would be no issue with you and the IRS as you have not actually earned any money.

Quiet Frankly, selling a home furnished or not may be a positive or negative depending on your style. Please keep in mind that you will be paying a Professional for their honest Opinion of how to sell your home and if they advise you that the decor may need a tweaking etc - do not be offended - they are just helping you.

If there is anything in your home that is a fixture and you wish to take it with you - I would replace it now and not even worry about saying it will not convey with the property - If you have too many items that will not convey with the property and of course you will have to disclose this information - it just sets a negative tone.

I would gently advise the potential Buyer that the furniture may be negotiable.

Happy to help you further and please consider me as you are interviewing Brokers.

Kind regards,

Deirdre Conway

Broker-owner

http://www.SchoonerProperties.com

508-945-1788
508-896-1788
0 votes Thank Flag Link Mon Aug 6, 2012
Stating "potential income" is not stating that you have had actual income. I doubt that the IRS is perusing MLS. The agent should be able to present some facts about the neighboring home and how you justify the amount. For renters, the landscape and furniture matters so be careful you don't overstate your potential

Furnishings pertains to the furniture not your personal items. A simple disclosure statement with the listing can take care of any confusion.

Be happy to anser any further questions.
0 votes Thank Flag Link Mon Aug 6, 2012
Hi Meg:

1) Your agent can market the property using the term potential rental income for marketing purposes. This is not stating you have earned income, it is suggesting another plus to your listing.
2) It is very normal to add exclusions to the listing descriptions. I recommend removing some of the items especially if they are dear to you. This is just to avoid a disappointed buyer. Of course, some items will be used to stage your home, but I don't think you should make the list too long.

I wish you the best,
Terri Gordon
Kinlin Grover, Yarmouthport
508-362-3000 ext. 127
0 votes Thank Flag Link Mon Aug 6, 2012
Remove anything you are not selling that is attached, hung, or may be considered part of the house. That will give you time to repair holes, repaint , etc. as necessary.
Writing a disclosure is not the same as removing, repairing, and never having any confusion.
If the items are personal, it will help new owners see their own items in the space more easily, too.

Stating possible rents is normal.
A good rental broker, and many listing brokers, can verify your info.
Most full time pros will know what is really possible anyway.

I am not sure how the IR S would become involved with a rental estimate. They look at what is on paper, filed, and signed.

My company, Robert Paul Properties, not only lists and sells nice homes, we also have a rental department.
See our web site at http://www.RobertPaul.com

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0 votes Thank Flag Link Mon Aug 6, 2012
You can state that the house next door which is the same builder and design as yours has a rental income between 30-40k. You are stating the truth and there are no red flags for anyone.

Regarding the furnishings, you state that it is being sold furnished minus personal items and art work.
0 votes Thank Flag Link Mon Aug 6, 2012
Hi Meg

Stating that your home has the potential of earning 30 40k in rentals is not fibbing if you have the comparison for proving it, which it sounds like you do. Also the listing agent can do a little more homework for verification of rental income as well. This is not a "red Flag" for IRS and should not be a problem if you have never rented.

Selling a home furnished can be a negative and a positive depending on the buyer. You may want to just state that furnishings are negotiable, but also clarify what is not negotiable. I'd be more than happy to meet with you and discuss listing your property when you are ready. Having grown up in Dennis and working for the number one company on the Cape I can offer you the best marketing available.

Kind Regards
Lisa Cannata
774-353-7129
lcannata@robertpaul.com
0 votes Thank Flag Link Mon Aug 6, 2012
I don't see any issue with saying potential 30-40K rental income since you're saying it's approximate and based on a very similar property. This should not be a flag for the IRS since you did not take in this income, you're just saying it's possible for someone to do so.

If you're selling it furnished you may want to either remove and stow away the artwork you wish to keep now, or include a list of property exclusions in the MLS.
0 votes Thank Flag Link Mon Aug 6, 2012
0 votes Thank Flag Link Mon Aug 6, 2012
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