I realize there are many answers to real estate questions, and I value everyone's opinion. I'm sure many of those answers come from valuable research and facts. I try very hard to include that information, too.
But I want you to understand something. The best answers I can give you won't always come from statistics, although I'll share those with you as well.
You see, I'm not just answering these questions. I've lived a lot of them. I've watched them play out over more than 30 years in real estate.
And although I may change the names, my stories are real. The people who lived them with me are real, too.
My hope is that when you read my answers, you're not just getting facts and figures. You're getting something a little different. You're getting a living, breathing answer from someone who was actually there.
Should I Sell My Rental Cabin Furnished or Empty in Gatlinburg, Pigeon Forge, or Sevierville?
In most cases, I'd sell a rental cabin furnished. That's generally what buyers expect here in the Smoky Mountains, especially if they're planning to continue renting it. But there's something important you need to understand about selling the furniture along with the cabin.
The furniture and the real estate aren't necessarily the same transaction.
And believe me, I've watched that little detail cause some pretty big headaches.
Lol.
Why most rental cabins sell furnished
If you've owned a rental cabin here in Gatlinburg, Pigeon Forge, Sevierville, or Wears Valley, you probably already understand why furniture matters.
A buyer looking for an income-producing cabin may want something they can put right back on a rental program.
Beds, couches, dining tables, televisions, decorations, and all those things that make a cabin feel like somewhere a family wants to spend a vacation.
And if it's already furnished nicely, that can be pretty attractive to a buyer.
They don't necessarily want to spend another $20,000 or $30,000 furnishing the place after they buy it.
They'd rather get started.
But here's where things get interesting.
Just because the furniture is sitting inside the house doesn't mean the mortgage company considers it part of the real estate's value.
And that brings me to a story about an agent I used to supervise.
Martha and the furniture that nearly stopped a closing
I've been a principal broker here in East Tennessee, and at one time I had around 150 agents working under my supervision.
Now, when you've got that many real estate agents, you're going to run into some interesting situations.
Good gracious, some days I wondered if I needed a law degree, an accounting degree, and a bottle of aspirin just to answer the telephone.
Lol.
Well, let's call this particular agent Martha.
Martha was a good agent, but she didn't work in the Smoky Mountain cabin rental market every day.
She worked in a nearby community, primarily selling traditional residential homes.
And there's nothing wrong with that.
But selling vacation rental cabins around here can be a little different from selling a three-bedroom ranch house down the road.
There are things you learn from working in this particular market.
And Martha was about to learn one of them.
She had written a purchase and sale agreement for a furnished cabin.
The furniture was included as part of the deal.
The other agent accepted the contract, and everybody moved forward.
Everything seemed fine.
Until the lender got involved.
The underwriter reviewed the contract and raised a problem with how the furniture had been included in the purchase.
The lender wasn't willing to finance the transaction as it had been written.
Now we've got ourselves a problem.
The seller believed the furniture had value, and rightfully so.
The buyer believed the furniture was included.
And everybody thought they'd already agreed on a deal.
But the lender had different requirements.
And the last thing you want when you're getting ready to close on a cabin is somebody telling you the contract needs to be fixed.
Bada bing, bada bang. We worked it out.
Well, Martha came to me, and we started looking at the situation.
The important thing was figuring out what everybody had agreed to and finding a way to handle the furniture that the buyer, seller, and lender could accept.
So we had some conversations.
The buyer and seller worked out a separate value for the furniture.
We reduced the real estate purchase price by the agreed amount and had the necessary paperwork properly revised and submitted to the lender.
The furniture was handled separately, with everybody understanding what was being purchased and how it was being paid for.
And the lender was satisfied with the revised arrangement.
Bada bing, bada bang.
The cabin closed.
Lol.
Now, I wish every little problem in real estate could be solved that easily.
But here's what I want you to understand.
We could have avoided a whole lot of aggravation if we'd addressed the furniture correctly before the contract was written.
That's the lesson.
What should you do with your cabin furniture?
Here's how I'd handle it.
First, I'd talk with a local real estate agent who regularly sells rental cabins.
I'd want to know what similar furnished cabins are selling for and whether keeping the furniture would make my property more attractive.
In many cases, I believe it would.
Then I'd make a list of what is actually being included.
The beds, sofas, tables, televisions, decorations, and other movable items.
I'd also be clear about what isn't included.
Maybe you've got an antique table your grandmother gave you, or a favorite piece of furniture you want to take home.
Well, don't wait until closing day to tell somebody that!
Lol.
And here's something else.
I'd discuss the furniture arrangement with the buyer's lender before everybody gets too far into the transaction.
Sometimes furniture may be included under a lender's requirements, provided it's properly disclosed and handled.
Other times, a separate bill of sale and purchase arrangement may be appropriate.
I've seen furniture agreements range from a nominal dollar to several thousand dollars, depending on the property, the furnishings, and what the parties agree upon.
But don't just pick a number to make the lender happy. The paperwork and values need to accurately reflect the transaction.
And remember, movable furniture is generally considered personal property, while items permanently attached to the home may be considered fixtures.
That's another good reason to make sure the contract clearly identifies what stays and what goes.
The point isn't to complicate the sale.
It's to make sure the buyer, seller, lender, and closing company all understand the agreement.
Here's why local experience matters
Now, I know I talk a lot about using local real estate agents.
And I'm not saying somebody from another town can't sell a cabin here.
Of course they can.
But if you spend most of your time selling traditional residential homes, you may not encounter some of the situations we deal with regularly in the cabin rental business.
Furniture agreements.
Overnight rental permits.
Existing reservations.
Rental management contracts.
Log cabin financing.
Septic capacity and occupancy limits.
There are a lot of little things that can create problems if nobody thinks to ask about them.
And sometimes it's not a matter of somebody being a bad real estate agent.
It's simply that they haven't dealt with that particular situation before.
Martha wasn't trying to cause anybody trouble.
She just needed a little help with something she hadn't encountered.
That's what experience is for.
And sometimes knowing what to ask before you write a contract can save everybody a whole lot of time and aggravation.
The bottom line
So, should you sell your Smoky Mountain rental cabin furnished or empty?
My preference, in most cases, would be furnished, especially if the buyer plans to keep it on a rental program.
But don't assume the furniture can simply be rolled into the mortgage without consideration.
Talk to your real estate agent, coordinate with the lender, and make sure everything is properly documented.
And don't forget to agree on exactly what furniture is staying.
Because there's nothing quite like getting to the closing table and finding out the buyer thought they were getting Grandma's antique rocking chair.
Lol.
After more than 30 years in real estate, I've learned that sometimes the smallest details can cause the biggest problems.
But a little planning can keep them from happening in the first place.
"Take us the foxes, the little foxes, that spoil the vines: for our vines have tender grapes." (Song of Solomon 2:15)
Hope that helps. God bless.
Will Cupp
Sevierville Realtor and Real Estate Broker
Realty Executives Associates, (865) 983-0011
865-654-9807
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