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Furnishing a home when it's up for sale can help prospective buyers imagine themselves in the property, but it does come at a price. Should investors bother with this extra expense when selling their properties?
Blogger: Jarrad Mahon, Investors Edge Real Estate
Imagine this scenario: you are thinking of buying a house. It looks great from the outside and a real estate agent has arranged to show you the house. You walk in and the house is empty. The realtor tells you how a queen bed will fit in the master bedroom, but it doesn’t capture your imagination. It is the same in every other room in the house. It’s just a bunch of floors, walls and windows. There is absolutely nothing there to even hint at the potential of the house as a suitable or attractive place to live, nothing to create any warmth for the buyer to connect with.
So, the real estate agent takes you to another house. It has the same number of bedrooms and also looks good from the outside. The design is similar to the house you looked at earlier but this time, when the agent opens the door, you are walking into a fully-furnished home. The living room has expensive, overstuffed chairs and sofas. There are paintings and photographs on the walls. This feels great, feels like home!
The master bedroom has a beautiful queen bed. It has expensive linen, plush pillows, throw rugs, lamps and bedside furniture. You can see how you could setup your bedroom. The children’s bedroom is decorated the way you would expect a children’s bedroom to be. The guest bedroom is tastefully furnished and even has room for a work desk. The dining room has a large, mahogany dining table and matching chairs. This house feels so much like someone’s home that you are expecting the family to return any minute.
Which home are you most interested in?
Pros and Cons of Furnishing
We all know which of the two homes mentioned above is going to be the most attractive. 99 times out of 100, the furnished home will sell before the unfurnished one. I hope we don’t offend anyone by saying that buyers have no imagination, but only a small percentage of buyers can imagine what an empty home would look like if it were fully furnished.
When an agent tries to explain what a house would look like if it had furniture in it, the buyer has no way of knowing if the agent is telling the truth or just trying to sell a house. When a buyer is left to his or her imagination to fill in the blanks, it seldom turns out well. Often, the buyer will imagine potential problems instead of the positive images the real estate agent would prefer. More often, the buyer is left “flat” and unable to imagine anything but an empty house.
Meanwhile, the home that is impeccably decorated leaves a lasting and positive impression on the buyer. They don’t have to imagine anything—they simply have to remember what they just saw. Instead of having doubts about the master bedroom, the buyer feels great about how their own furniture will look in the bedroom when they move in.
When it comes to furnishing, it’s an emotional slam-dunk for most buyers. Furnishing a home with display furniture is an efficient way to make it sell faster.
But What About the Expense?
The main sticking point for most sellers when making the decision whether or not to furnish is the expense. Anyone who has used display furniture hire from a professional furnishing company here in knows just how expensive it is. For a 3x2 or a 4x2, it will usually cost between $2,500 and $6,000 for the first month with a reduced rate for the second. However, most real estate agents agree that any house that doesn’t sell within the first month has problems that display furniture alone won’t fix.
The main determinant in your decision will be whether you gain more money than the expense of furnishing. Our experience has been that the home will definitely sell faster, saving on interest and other expenses that having the home on the market longer can create and it will have the best possible chance of selling for a premium. In the case where we get an extra buyer interested that other wouldn’t have been, the competition between buyers can result in the highest bidding buyer paying tens of thousands extra simply because they don't want to miss out to someone else.
In other words, in our experience display furniture is a good investment because you should at least get back every dollar you spend and more. In addition, you are spared the uncertainty and hassle of the home being on the market longer than you want it to. When a home is on the market too long going stale, a property can sell for tens of thousands lower than what it otherwise should have achieved.
About Jarrad Mahon
Jarrad is the director of Investors Edge Real Estate.
Jarrad thrives on helping hundreds of investors every year formulate a clear plan to get the best returns from their Perth property. This requires a carefully thought out and innovative approach to understand your situation and help you to make the right move at the right time.
His renowned personalised "Property Success Plan" takes you step by step through how to make thousands of extra dollars and avoid the costly mistakes that Jarrad has learnt the hard way by investing himself all around Australia.
Over the last five years he has used his engineering background to build and refine a unique property management, sales & investing process that is sure to impress while getting you real results.
A sales and marketing expert, Jarrad combines the latest technology and cutting edge sales strategies to sell homes across the whole of Perth metro area.