Category Archives: Auction
Twenty plus years ago most rural areas in the United States used the auction method of selling off the contents of a deceased persons’ estate. It was held on site and would last one or two days. Most auctioneers back then did not charge a buyer premium (only the seller paid a commission to the auctioneer) and most had no reserve. Only the large exclusive auction houses like Sotheby’s, Christie’s, Bonham, and Skinner held high end and speciality auctions.
Today let’s look at the small auction companies and estate sale companies.
Many estate sale companies have branched out into the auction business as well. They have done this for several reasons, particularly when an onsite estate sale cannot be held, there is too little in the estate to sell at an estate sale, and they can combine multiple small estates into a one day or evening event. In many cases this also provides them the ability to charge not only the seller a commission, but a buyer premium as well (a set percentage of the gross sale of the item purchased). The opportunity to possibly attract a larger audience is another factor.
There are estate sale companies that have also branched out to conduct online auctions. They do not require a brick and mortar building to conduct the auction, merely the space to store the items for sale and eventual shipment. This has become an alternative when some items fail to sell at an estate sale for various reasons and they are looking for a broader audience.
There are still more estate sale companies than auction companies and online auctions. With the rise in unemployment several years ago and the internet presence of estate sale listing sites this has greatly increased the number of estate sale liquidators. Many estate sale listing sites started off listing only estate sales and now include auctions and online auctions as all these businesses increase.
With the estate sale process one of the prime differences is that almost all take place at the property and no commission is charged to the buyer. The estate sale company has a fiduciary relationship with the seller. They work solely for them. When hired they are given access to the property to stage and price the items to be sold, and conduct a two, three or four day sale. Pricing is done before the sale. Although bids may be excepted on some items the majority of what is at the estate sale is sold based on prices determined by the estate sale company. The seller and estate sale company will have a contract that details the work to be done by the liquidator and requirements of the seller including whether the estate sale liquidator will leave the property “broom cleaned” (all unsold items removed). In most cases the only items for sale are those of the “seller(s)”. Like an auction company they have staff to assist before and during the sale.
Some hold to the concept that expensive items cannot be sold at an estate sale, however, your editor knows of several estate sale companies from the east coast to the west coast that have had sales into 6 figures and sold items in 6 figures. Many factors are involved including the area and advertising. Both estate sale companies and auctions market extensively.
The choice becomes what will work best in your region. Both methods can provide successful financial results, however, it is important to review the auction or estate sale companies you are considering, do your due diligence and choose the company that you feel will work best “with” you.
Estate sales and auctions have been a method of disposing of the contents of personal property for many years, however, many companies offer both methods. They can also be used to liquidate commercial contents as well.
Let’s discuss the difference.
An estate sale is where a seller(s), heir, attorney, or family hires an estate sale company to come in, sort through the personal property, set it up on various tables, shelves etc. and price most if not all the items to be sold. The person or persons requesting the sale will pay the estate sale company a portion of the gross proceeds of the sale (commission usually). The sale is advertised for specific dates and times and when the door opens to the property or location of the sale the items have a specific price on them. The buyers do not pay a commission or fee to the estate sale company. Although the buyer may leave a lower price offer (bid) for items, it is at the company’s and seller’s discretion whether to consider or accept the bid(s).
Auctions have been around for hundreds of years, however, it is an entirely different method of selling. An auction can take place on the property or at an off site location. The best way to describe an auction comes from Wikipedia. “A process of buying or selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder”. Some auctions do contain reserves (a set price, usually by the sellers) which is the minimum acceptable. Auctions usually charge the seller(s) a percentage of the sales and many also charge a buyers premium (a percentage of the cost of the item purchased).
Estate auctions have been used for years in rural America to dispose of the contents of an estate and in more recent times used in metropolitan areas, particularly if the estate contains high value items or the sale of the contents cannot take place on site.
Some confusion exists these days because most websites that were originally for listing estate sales now list auctions and online auctions, however, they still retain the phrase “estate sale”.
Depending on the area, circumstances, and property to be sold, sellers need to choose which method works best for them. Either method can bring financial success. Understanding the difference though is important.
At the 2014 Estate Sale Conference in Memphis there was a room devoted to vendors that could assist estate liquidators and one of them was Lofty.com. They offer a unique service that can be used by estate sale companies and others. Estate Sales News is featuring this guest article on this new concept and company as an item of interest.
The article below was written by John Maher an Evaluations Expert of Lofty.com
Lofty.com a new online resource, provides a free virtual evaluation service and sales venue that can assist estate liquidators.
Founded in 2012 by Harvard Business School graduate Mark Lurie, Lofty is an expert-reviewed marketplace for Fine and Decorative Art, Antiques and Collectibles that provides free evaluations based on digital photos. Every item on the site has been identified and virtually evaluated by a member of Lofty’s Expert Network, which includes auction house specialists, qualified appraisers, and experienced dealers.
Mark was inspired to develop Lofty when a friend asked for help selling a few prints and some 19th century silver she’d inherited, and he realized how difficult it was to sell potentially valuable items online with confidence and ease. eBay was the obvious option, but he didn’t know how to accurately describe the items or where to set prices. The pieces in question weren’t valuable enough to take to a large auction house, as the cost and effort involved in shipping and preparing them for sale likely would not have been worth the prices they would have realized. Prompted by this apparent gap in the art market, Mark set out to create a site which would allow anyone with access to the internet to confidently sell their art and antiques online.
Lofty does not sell the entire contents of an estate, but it can serve as a useful tool for estate liquidators looking to sell one or several objects that might perform better if exposed to a broader market. Chinese ceramics, for example, may only realize their full potential when offered to the Asian market, and paintings by well known artists may achieve much higher prices when offered on a global scale to eager collectors made aware of the sale online at Lofty.com
Estate liquidators have a highly complex job on their hands each time they sign a new client, but grossing the maximum possible profit is always one of the business owner’s primary responsibilities to the estate owner. While years of experience can give estate liquidators a good knowledge of an item’s worth, having a trusted expert provide additional insight and giving your item more extensive publicity may result in a higher price obtained and a better result for the seller
You can visit their website, www.Lofty.com.
Estate Sales News in the course of doing it’s daily research on the Internet discovered that one of the internet sites it came across that offered information said that estate sales are a form of auction.
Your Estate Sales News Editor was a licensed Auctioneer for several years and estate sales are not auctions. You can sell an estate at auction, but an estate sale is not an auction.
An auction is where customers “bid” on the items for sale. Sometimes with a reserve (a minimum price that will be accepted). Most auctions (not all) charge the seller a commission and a buyer’s premium (a percentage of the selling price). Most auctions have a two hour to several day preview session and then the auction date and time is set. The auction most likely will have a printed catalogue with the lot number and brief description of the items for sale.
An estate sale will usually take place over 2 or 3 days within a specified time. With an estate sale the seller pays the commission. There are no buyer premiums. The items are staged, set out, and priced. There usually isn’t a preview and you will not be given a catalogue. Although bids may be accepted, it will be in writing and left with the estate liquidator and if the item is unsold toward the end of the sale, the liquidator will usually call the person that left the highest bid. You may never know what that bid was.
An estate sale is usually a local event or within 50 miles although some sales have attracted buyers from 100’s of miles away. An auction can be local, but it can also draw buyers from almost anywhere if they use the internet to have phone in bidders. Some estate sales with very high priced items will accept phone orders and send the items.
In either event, the liquidator or the auctioneer is usually the professional setting the price or pace for the items for sale. Auctioneers should be knowledgeable and may also use appraisers on some items just as estate liquidators do on occasion.
Estate Sales News wanted to share this Reuters video with our audience about the auction of 1000 items that the Ford estate is selling in California to benefit three local organizations in Coachella Valley where the Fords lived until their passing. They are interred at the Gerald R. Ford Presidential Museum in Grand Rapids, MI.
We spent time at A-1 Auction in Maitland, Florida. They were conducting an auction for two different Florida estates that had items the heirs felt were best sold at auction.
Doug & Paula White started as a small auction company 32 years ago this month. They have been holding auctions at the Maitland Civic Center for 29 years. One of the estates today was from a former power plant engineer at NASA. His wife had been working with Bonhams Auction House who recommended they contact the Whites of A-1 Auction.
Let’s bullet point them for simplicity:
- Location – can you have an on site liquidation sale
- Merchandise – what is in the residence to be sold
- Value – what type of value do the items have, high end/designer, antiques, gen. household etc.
- Time – how soon do you need to liquidate
- Who – in your area what types of liquidations solutions are available
- $$$$ – what will it cost to liquidate and what will bring you the best financial results
In Mondays’ Estate Sales News article we talked about where auctions could take place and here is a thrift store auction with Dan Dotson from American Auctions and star of Storage Wars.
Auctions can be a success or a failure. Merchandise, location, date, who shows up, and the auctioneer all play a part in determining the outcome of the auction.
Auctions can be one of many outlets for estates that cannot be sold on site. Other venues are consignment shops (however, most consignment shops will not accept the consignment of an entire residence unless it is very high quality, antique or unusual and perhaps not even then) and also selling to a picker or antiques dealer.
When you sell at auction the seller pays the auctioneer a commission and in most cases, not all, the buyers pay a premium (also a commission). However, in most sellers are not able to establish a reserve on most if not all the items in the auction so an item that should sell at a high price could end up with a lower price. This happened to someone I know who had a family member pass away, did not want an estate sale and the entire household including some exceptional antiques were sent to a neighboring auction company and many sold at a lower price than they might have obtained at an estate sale or consignment shop. Also if you choose to sell to a picker or antiques dealer, remember they have to resell so you are not going to get a retail price. More than likely up to or about 50% of the expected resale price.
Estate Sales News will be traveling to Florida tomorrow and following up on our auction articles on Sunday, June 30th we will be interviewing Doug White of A-1 Auction. They will be conducting an auction on Sunday, the 30th in Maitland, Fl. with items from many estates. To get a preview of this here is their link at estatesales.net.
We’ll have more on this auction and the process Monday, July 1st. Estate Sales News is on the road again!