Joan Herlong: Furniture is not real estate

When it comes to vacation homes, the contract of sale often includes a separate bill of sale for furnishings. The challenge, says Joan Herlong, owner and CEO of Herlong Sotheby’s International Realty, “is that furnishings are not real estate. I’m not a furniture salesmen; it’s not my job to place a value on furniture.”

It’s not uncommon for a contract of sale to include a few items for just a dollar.

“For example,” Herlong says, “the washer, dryer, fridge and four porch rockers are sold for one dollar, paid at closing, on a separate bill of sale. Include all that stuff for a dollar, and it’s easily folded into the mortgage.”

Sometimes buyers and sellers get creative in the value of used furniture — in a cash deal.

“I’ve put numerous cash deals together whereby the buyer and seller happily agree on a bill of sale number that significantly exceeds actual market value, and the price tag for the house itself is consequently lower.”

Why were they happy?

“Because the seller doesn’t pay commission or sales tax on the sale of used couches, beds, tables, etcetera. The seller’s focused on their bottom line,” Herlong says. “The buyer’s property tax basis is also lower. That’s often a cash recipe for happiness.”