Category Archives: How Do Estate Sales Work
A recent discussion of what estate liquidators find when preparing a home for an estate sale revealed not only dangerous items, but some items that most liquidators would not expect to encounter. As a former estate liquidator for 20 plus years, I was fortunate enough not to encounter anything like these.
Here is what one liquidator has encountered during his 30 years in the liquidation business. Estate liquidators wear many hats as you will see here.
A Civil War land mine with the plunger up. It was taken to the state police bomb squad.
Grenades required a call to the police captain.
This liquidator found Browning machine guns. The liquidator called an FFL with the proper paper work because the can sell or dispose of these items.
He also found an Electric Shock Machine which was donated to a local hospital museum.
WWII vets brought many items home as souvenirs of their conquests or battles.
There are several sources that offer to provide you with verified or successful estate sale companies. Unfortunately, most of these sources have never conducted an estate sale so recommending an estate sale company is merely utilizing information that they can readily acquire through the internet including BBB ratings (not a true indication of performance), feed back from sellers (written, not an actual conversation with them), the time you have been in business, verification of insurance (this is important), and the number of sales conducted within a period of time (numbers don’t add up to knowledge or success).
These are not what determines a successful liquidation company.
We put the question to hundreds of estate sale companies what they feel is important. Here are the answers we received.
One of the largest generations in our history, the baby boomer generation, has helped to create a boom in the estate sale industry, changed the way estate sales work, and the costs associated with estate sales.
Ten years ago holding an estate sale you payed a commission to an estate liquidation company or a flat fee and possibly paying an outside source to provide a clean out after the sale. The commission or fee was set by the estate sale company and was the same for almost every sale they conducted.
Not so today. The majority of estate sale companies now carry liability insurance, important for them and sellers. Workman’s compensation is also an expense for hundreds of estate sale companies. Estate sale companies that hold more than one estate sale per week or handle large content sales have had to add staff to handle the volume of sales they are working, advertising has gone from placing an ad in the local paper and hand made signs to marketing with estate sale advertising websites such as EstateSale.com (including featuring large or unusual sales an extra cost. Each estate sale adverting website is different and has varying costs), Facebook (and boosting the post for the sale) professional signage, brochures, memberships in associations, email targeting lists, and clean out costs either by the liquidation company or a company that specializes in clean outs of property.
Many people moving, downsizing, or selling off a family home, fail to realize that once you have signed an estate sale contract it is binding just like any other contract. You have committed to an estate sale company and they have committed with you. For this reason it is important to you as a seller that you understand the contract and ask any questions. Do not feel hesitant or intimidated to say I don’t understand this clause. The estate liquidator wants a clear understanding between you both and a good working relationship.
Estate sale companies are discovering (especially in packed homes) that sellers are coming in after they begin their setup, and remove items they hadn’t seen in years. This is not the way it works and most estate liquidators have a clause in their estate sale contract that says they may charge you a full commission on any items removed.
EstateSalesNews.com has written about estate sale contracts in the past, but there are topics that deserve review.
One of them is the final payout to sellers of the net proceeds. Every estate sale contract should have a paragraph that addresses the specifics of how and when you, as a seller, will receive your net proceeds. It should lay out either the number of days (and this should be business days – excluding weekends and holidays preferably) or weeks, but certainly within 30 days of the conclusion of the sale.
Each estate sale company has a process they go through, however, 30 days should be the maximum and if you have a contract that is not specific, do not sign it. You will not have any guarantee of when or even if you will be paid. Estate sale companies that have good business ethics (99.9%) want you to know when you will be paid. They also want you to know how your will receive your proceeds, either by check, cashiers check, or in cash. When you review the contract with your prospective estate sale company look for the payout clause and ask questions if you have any. Estate sale companies want to have a good working relationship with you as a client. It benefits both of you.