Second-Home Buyers
Want Your Furnishings

When Philip Shapiro went shopping for a second home on Miami's La Gorce Island a few months ago, he found a house he called a "home run." It wasn't just that the Spanish-style three-bedroom had a pool and palm trees, or that the seller was pop singer Shakira -- but that it was filled with great furniture, from chairs by Dakota Jackson and Mies van der Rohe to designer Italian sofas and tables, with a sprawling white shag rug.

"I could never put that thing together in a million years," says the 43-year-old real-estate investor from New York, who signed a lease last month with an option to buy the house, with all its belongings, for $1.8 million. He figures that he paid about $15,000 for the furniture -- which he estimates is about 20 cents on the dollar. "The cost of hiring a designer is double or triple that," he says.

The old owners are out -- but the living room stays. With second-home sales continuing to rise, more buyers are negotiating to buy not only the house but the sellers' style sense, asking to take over everything from their chandeliers and curtains to wastebaskets and houseplants. And while many sellers are only too happy to keep from hauling out the old sofa, sometimes small items of furniture can present big obstacles to closing the deal.

Real-estate professionals in second-home markets say they're seeing more of these sales. In Park City, Utah, broker Deanna Carter says requests for a home's contents were "very rare" as recently as three years ago -- but says that now, about 60% of her second-home sales include some furniture. In Nantucket, Mass., about half of the seven-figure homes sold by Denby Real Estate come at least partially furnished, about twice the level of ten years ago. In Danbury, Conn., broker Allyson Bernard says buyers want not just dishwashers but even espresso spoons. "It's gone way beyond appliances," she says.

Sellers and real-estate developers have long used furnished homes to woo buyers, of course, but the looks were often generic, or downmarket. Many of these newer deals, though, are initiated by buyers of more expensive homes who like the previous owners' designs, or else don't like the idea of spending their money and vacation days outfitting a new place. And in general, there are more second homes to furnish: Last year an estimated 445,000 second homes changed hands, a 27% increase over 2001, according to the National Association of Realtors.

Levels of Attachment

Sellers may find themselves facing rooms full of furniture they may not need -- a mountain-cabin scheme, for example, that may not translate to a new beach house -- or that hold little emotional value. "If it's not your home base, there's a different level of attachment," says Chicago broker Jim Kinney.

Taking the sellers' furniture may work in the buyer's favor, as Charles Catledge discovered. Earlier this year, the Las Vegas loan executive was looking at a home that was on the market in Park City for $900,000. He suggested the sellers throw in everything in the place -- including beds, custom couches and an antique dresser turned into a sink -- and sell it to him for $30,000 less than the asking price. The sellers took him up on the offer, and the strategy has worked well for Mr. Catledge: He and a business partner have bought three other furnished homes this year, he says.

The sellers, Duane and Kathy Bailey, figured they'd gotten a decent deal as well. "To my wife it was, 'You sold everything too cheap,' " says Mr. Bailey, president of a sheet-metal company in Salt Lake City. But, he says, they didn't want the stuff anyway, the move was easier without all the heavy lifting, and they have nicer furniture in their new home. Adds Mr. Catledge, proud new owner of a stereo, snowblower and 30-foot extension ladder: "I get what I want and they get what they want."

Developers are catering to the demand as well. In Bonita Springs, Fla., Al DiNicola of Bonita Bay Group, a developer, says that in the late 1990s his company's condo projects typically had about five furnished units out of roughly 100 residences. Now, he says, 20 of the million-dollar condos in one new 80-unit high-rise come furnished. Home shoppers "want instant gratification," he says.

Buyers and sellers may disagree over what "furnished" really means. Most houses are sold unfurnished, which means only basic fixtures -- towel bars, light fixtures, even swimming pool covers -- are part of the sale. For furnished homes, buyers and sellers have to agree on what's included -- and in many cases, buyers may think they're getting personal items that the seller is planning on taking.

Michael Stoner of Memphis, Tenn., says the sellers of a $244,000 condo he bought in March in Destin, Fla. took some furniture that he thought was part of the deal. "That's why I bought the place, because of the way it was set up," says the 47-year-old FedEx pilot. While the sellers left beds and sofas, he says they took other items, including end tables, lamps and "a lot of knick-knacks." "They took silk palm trees and replaced them with $6 palm-looking real trees," says Mr. Stoner. "When I came back to the place, I had dead trees."

For their part, the sellers, R.D. Lake, a 52-year-old pilot from Tallahassee, Fla., and his wife, Lynn, say that the contract stated they would be taking "personal items" and that they were never asked to specify what they were. "It was all a misunderstanding," Mrs. Lake says.

Chandelier Busts Deal

Such transactions can have complicated tax and mortgage-payment implications. Furnishings can be valued at tens of thousands of dollars, even used, and transactions can be subject to sales tax, if the state taxes sales between private individuals, says Allen Kramer, a Manhattan tax lawyer. Real-estate lawyers say that buyers and sellers often make side deals for the furniture while writing in the contract that the furniture was "abandoned" or has "no value," but doing so may circumvent tax laws. Lumping the home and furnishings together in a single price can pose problems with the mortgage lender as well, as banks generally wouldn't willingly finance the purchase of furniture in these deals.

Even one item can break a sale. Jan Stephenson and her husband, Skip, listed their four-bedroom, mountain-style residence in Park City at $821,000 last spring, and planned to sell it unfurnished. The 54-year-old stay-at-home mom got a $775,000 bid she was willing to entertain but refused -- mostly, she says, because she didn't want to part with a wrought-iron-and-crystal chandelier the buyer wanted and that real-estate laws would consider a fixture. To avoid a repeat, she replaced the chandelier with a $350 version. Now, she's decided not to sell after all -- and the chandelier is back in its old spot. "I have my house back in the order that I like it," she says.

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