Selling or buying a turnkey home isn’t for everyone — consider these perks (and pitfalls) to decide if it’s right for you.
Imagine: Your Newport Beach, CA, home has been on the market for a week and voila! You have an offer. But it’s not just any offer — the buyer wants everything included. As in, really, everything: your couch, curtains, kitchen table, the works. Just pack the clothes in your closet and head to your next home. It sounds like the perfect scenario, right? Not so fast.
While buying a home fully furnished is not the norm in real estate sales, it does happen. And depending on the outlook of the seller and buyer, these sales can be either exciting or daunting. Consider these reasons why you should (or shouldn’t) sell or buy a home completely furnished.
Such was the case with Shannon Beador of Bravo’s The Real Housewives of Orange County. This season, Shannon and her husband, David, received great news (their home went into escrow!) and bad news (the buyers want to purchase the home completely furnished). It gets better: The Beadors, who lived in Newport Beach, CA, had 13 days to move. “David and Shannon’s home sale was unique in that it happened quickly,” says John Cain, who represented the Beadors and is principal and broker associate of Cain | White Group in Orange County, CA. But after multiple offers that had fallen through, the Beadors opted to accept this one — regardless of the quick timeline.
“A buyer can expect a 30% markup [on a staged home] because, ultimately, you’re paying for the furniture but also the lack of headache,” explains Taylor Spellman, interior designer and staging expert in New York, NY. “The designer has spent time curating the space and has already overseen the delivery and installation, which is both time-consuming and pricey. A lot of buyers understand that 30% is a small price to pay, considering the service helps turn your new house into a home.”
But a fully furnished sale may not be all it’s cracked up to be. When one of Melanie Narducci’s clients toured a fully furnished model home for sale, she was in shock. “Not only was the decor really dated,” says Narducci, a real estate agent with The Real Estate Firm in Gilbert, AZ, “but it appeared to all be marked up about 50%.” So while it was certainly turnkey, any potential buyer would take a hit on the sale. “I usually advise clients against purchasing a model home furnished, as the markup is fairly extreme.” But, she adds: “A buyer may be willing to pay for the convenience.”
Sure, sometimes you can inflate the cost of your furniture and accessoriesut for the average Joe, selling your fully furnished home can come at a serious cost. Such was the case with Bruce Ailion, an Atlanta, GA–based real estate agent, when it came to selling his mother’s home. “My mother had been living in an age-55-plus complex on the third floor of a condominium where there was gated entry,” he explains. “We were not allowed to have an estate sale on the premises. Fortunately, we sold to a buyer who took the furnishings at a large discount.” How large of a discount? Ailion says if they could have priced and sold items separately, they would have made around $5,000. Instead, they netted $1,500 for all the furnishings as a package. Bottom line: Don’t attempt this approach if you’re not willing to take a potential loss for the sake of convenience.
Furnished homes for sale not only are move-in ready and convenient but also come with tons of value. Often with high-end homes, the previous owner hired an interior designer to furnish the home, not to mention create custom pieces that fit that space specifically, like area rugs, curtains, and bookcases. This customization and attention to detail can be a major selling point. “If you’re spending $10 to $15 million on a home, you’re not just buying the four walls,” says Ryan Serhant, a broker with Nest Seekers International in New York, NY. “You’re buying the character of the home, which is what you fell in love with to begin with.”
With the real estate market hitting its stride once again, buyers can be even more particular than they were, say, back in 2010 when the market was recovering from the crash of ’08. Offering an all-inclusive property when selling your home can really sweeten the deal. “It truly makes a listing stand out from other developments, for example, that are not furnished at all,” says Serhant. Cain agrees, adding that “some of these homes are quite large, and decorating it can be quite laborious. If a buyer can negotiate a turnkey offering, it enhances the overall appeal of the property.”
In markets where buyers are scooping up second homes or vacation homes, selling a fully furnished home is almost always a bonus. “Due to our remote location in the middle of the Pacific Ocean, purchasing a completely turnkey home is a very common occurrence in Hawaii,” explains Susan Higgins, a broker with Hawaii Life Real Estate Brokers in Koloa, HI. “Second homes and investment properties are the norm here, and with the high cost of shipping, many buyers and sellers prefer this type of transaction.”
When it comes to luxury real estate in cities like Los Angeles, CA, and New York, NY, buying a turnkey home is becoming more common. “I tell a lot of my clients, ‘Don’t be surprised if the buyer wants to purchase the home with all of the furniture, artwork, accessories, everything,’” says Serhant. But it’s not just advantageous for buyers. “Removing that 30-foot-long dining-room table that was made just for that space can prove to be a real challenge for the seller, so selling it and not having to move it can be really convenient.”
In other new-construction listings, home stagers will design pieces specifically to help the home sell, and these pieces are included in the list price from the start. “Had the buyer seen that space vacant, they would never have bought it,” Serhant says of his recent New York development. Furnished homes let the house hunter envision life in the home, and can be the turning point in a sale.