An estate sale, estate auction or tag sale is an efficient way to break up a household. An estate liquidation company runs the sale in exchange for a percentage of the proceeds. Depending on the area of the country and the number of items in the house, the commission may range from 25% to 45% of sales proceeds. The contents of the house are often being sold because the owner died, but sometimes the owner is simply downsizing and looking to start over with new things.
If you’re thinking of holding an estate sale at your house or that of a relative, start by researching and interviewing several different liquidation companies, says Julie Hall, director of the American Society of Estate Liquidators in Charlotte, N.C. She says that sellers should check references and ask about others’ experiences. Estate-planning attorneys and real-estate agents usually know the good estate sale companies in their area, Hall says. She adds that family members should be in agreement about the sale. If anyone wants a specific item, he or she should take it before the estate company gives its estimate and the contract is signed. More than one sale has been derailed by family squabbles, ranging from fights over the terms of the contract to someone changing the locks on the house in the middle of the night.
The estate-sale company, in turn, will look for two things from the seller. The first is the location of the house, Hall says. An ideal sale will take place in a single-family house with good street parking, wide doorways for getting items out, and in a community with no restrictions on such activities. Many homeowners’ associations don’t permit estate sales, meaning that you’ll have to find another strategy for removing the contents of the house.
Dan McQuade, cofounder of EstateSales.NET, says that potential sellers need to determine what the items in the house are worth. If the contents of a house are worth $3,000 or less, it’s hard for a professional to make enough money for the sale to be worthwhile, and many smaller estate sales in less affluent areas are about that size. For small estates, the do-it-yourself option is a possibility.
McQuade will list sales held by individuals, provided they are sales of the contents of a house and not garage sales. Still, he says that most people are better served by working with a company because it is in in the business of getting the most value from the items. A professional will know what really is valuable to a collector and what isn’t. One well-priced and valuable item can more than make up for the fees being charged.
In fact, one of the estate sale company’s key services is pricing the items in the house. In some cases, the company will recommend a specialized seller – certain works of art may be better off handled by a dealer rather than sold in an estate sale, for example. The problem, Hall says, is that many homeowners think certain items are valuable, and they are not. Collectibles such as Hummel figurines once had value because people liked them, but younger generations are less interested in these items. Hence, the prices are much lower than many sellers think. “It just comes down to the law of supply and demand,” she says. “The clients need to allow themselves to be educated.” Collector plates, heavy console televisions and dark wood furniture are not getting high values these days – which is good for shoppers, but not for sellers.
Hall says that clients have to trust the professionals. She says that contracts have become complex over the years because of bad behavior by sellers. For example, some sellers change price tags or pull items from the sale that they believe are worth more than the liquidator says. Others attend the sale and spook the shoppers. “The buyer does not want to hear memories of the deceased person,” Hall says. “He does not want to be reminded that he is buying the items of a deceased person.”
Because the estate liquidation company wants to get the most value from the house, it will want to schedule the sale for when the shoppers will be out. “Spring and summer are good,” McQuade says, especially in parts of the country where the winters are rough. “There are only two months of the year that are slow nationwide, and that’s December and January,” he says, although he has listed sales for the week of Christmas.
Original image by artur84, freedigitalphotos.net.