Estate sales occur for many reasons, not just following a death. Sometimes, an estate sale may be due to downsizing, a divorce, a need to move into an assisted living facility, or other causes. Finding the right company to assist you is critical.
I am not going to provide you with just a simple list as you will find elsewhere on the Internet. THIS IS TOO IMPORTANT FOR A TRIVIAL SET OF INSTRUCTIONS. I am going to give you a reasonable amount of detail to help you with this critical step.
Very few people have much if any, experience in dealing with the liquidation of an estate. Most people have not even attended an estate sale. It can be overwhelming when someone finds they have fiduciary responsibility for the lawful and efficient disposal of an estate’s assets. They are not responsible for it and must do so in the most efficient manner to realize the most from the proceeds for the estate’s beneficiariesThis is often a very trying time for families and all too often estate disposition can lead to rifts that may never heal. Unfortunately, in this litigious society, it may mean being held accountable in a court of law after the disposal when family members are displeased with your actions. It is therefore absolutely critical that you, as the executor of the estate, make the right choice in hiring someone to liquidate the estate. Even if only one person is inheriting the estate, you still must be sure that you hire the company to maximize the liquidation’s success.
You will find that many people will have ideas for you. They may know someone who does estate sales. Unfortunately, all too often, it is likely to be someone like their cousin who once had a booth at an antique mall and held an estate sale for their aunt or some similar recommendation. You can probably find dozens of people near you who think they can handle estate sales, for it looks so easy. Some may have even done a few and think that makes them an expert now. They are wrong; you do not want to make that mistake with such a critical need. There are even established companies out there who may have done some estate sales, but really still aren’t qualified to provide more than modest success.
So, how do you choose the right company? What questions should you ask? What should you see as red flags to avoid certain companies?
STEPS
Here are some suggestions for what to do in dealing with the estate and in selecting a liquidation professional to help you.
- First of all, it is critical that you DO NOT dispose of anything in the estate other than what the family is keeping. DO NOT throw anything away, donate, or sell any part of the estate until you have met with the liquidation company. You will be amazed at the difference it will make. You may very well be surprised at what will sell. While the quality of the items in the sale is essential, so is quantity. Let estate sales professionals decide what to keep and throw away. Don’t dilute the sale just because you don’t think things will sell or because you are trying to help. Don’t clean up, don’t throw anything away, donate, or sell anything before you have your in-person consultation with an Estate Sale professional. After that, if you don’t want to take their advice, there will be plenty of time to do whatever you want.
- Talk with a few companies on the phone and then narrow it down to at least two companies you will meet with in person. This must be done at the estate itself. They will need to see the estate in order to evaluate your situation and see if they can meet your needs.
- Of course you will ask questions in the interview, but getting to know the person who conducts the sale is just as essential. Trust your instincts and make sure you are comfortable with them. They must convince you that they are right for your liquidation and have the experience and resources to make it a success. Ask questions from the list below.
- Visit one of their sales in progress to see exactly how they handle things. Is it neat, clean, and orderly? Are all the items priced? Is it properly staffed? Were plenty of professionally created directional signs to help you find the estate? What is the atmosphere like – friendly, helpful, fun?
- Check online for reviews.
- Check with the BBB for unresolved complaints.
- Ask for references.
- Go over their contract in detail.
- Make your decision based on these steps (including the questions).
Here are some of the questions you may want to ask with suggestions on what they should tell you and some red flags that you should notice.
QUESTIONS
- How long have you been in business and roughly how many sales have you handled?
Naturally, you want someone with plenty of experience and, believe me, this is very important in this process. Becoming proficient in conducting sales takes more than managing just a handful of sales. Every sale is different and every sale has its own unique challenges. It takes experience in successfully dealing with all the situations that come up as well as learning how to maximize the efforts necessary to truly become a professional. - What areas of expertise do you have that affects your ability as a liquidator?
It may be surprising how many people managing estate sales were/are antique dealers with little other relative business experience. Many years ago, most estate sales had a significant amount of antiques. These days, many, if not most, have very few antiques if any at all. What is more important is marketing experience, direct sales, advertising, and people skills. If your estate has antiques and collectibles, then it is absolutely important that they are also experienced and knowledgeable with them. - How do you determine prices?
They should have a litany of places they research prices such as the Internet and specifically tell you where – eBay? Auction databases? Etc. It should be a plus if they are actually a certified appraiser or use one when needed. - Where do you advertise?
They should specifically list where they advertise and it should include places on the Internet such as Estate Sale dot net and org. It is vital that they use Social Media in a major way. They should have an email list. They should use local papers. NOTE: They would not be on my list if they only advertise in the newspaper. That is the least effective manner of advertising for estate sales now. - How many people do you have at a sale like mine?
This will vary depending on the size of your estate. Usually, even a small sale should have at least four people; more extensive sales may have many others, but you should be satisfied that there is an adequate number to handle the customers and provide security. - How long will it take you to set up the sale?
An average sale should take a staff of 4 people about a week to clean, set up, and price the sale. That is highly variable depending on the number of items in the sale as well as the size of the house & outbuildings, as well as the current condition. The thing to watch for here is to make sure they take sufficient time to do it right. Many staffs are very efficient and may get it done faster than you think. NOTE: if you have a huge house stuffed with items, and they say they can have it ready in a couple of days – beware for sure. - How many days will the sale be, and on what days and hours?
Most sales need three days to give the best results. Smaller sales can possibly be done in two, but they need to be small to justify that. For optimum results, your sale must include a Saturday. NOTE: If they have the sales only on weekdays, Wednesday through Friday – they would not be on my list. No matter their following, no matter any extended hours, NO ESTATE SALE WILL BE AS SUCCESSFUL WITHOUT INCLUDING A SATURDAY when attendance is ALWAYS THE HIGHEST. The schedule for an estate sale should be for what brings the highest results for the estate, not set to give estate sale companies the weekend off. - What is your commission?
Nationally, the average seems to be 35-40%, but it does vary. That is the most common percentage range in this area. However, the percentage is far from the most critical factor. You can shop around and find someone in any area that will charge 25% and maybe lower. What is important is having someone who generates the most money for the estate. A professional company that charges 40% will also know how to price, advertise, SELL, and make the most of the liquidation. 60% of a lot of money is MUCH BETTER than 80% of a much less amount. - Are there any other charges for handling the sale (or after)?
Some companies are full service working strictly off commission. Other companies find ways to charge for various services in addition to the commission. They may charge setup fees, cleanout fees, and even charge for advertising costs. These companies may nickel and dime their clients to no end. NOTE: If anyone wants a deposit upfront or wants to charge for setup or advertising or any other similar charge – they would not be on my list. There may be circumstances where a cleanout fee may be necessary, but that should not be the norm, and the liquidator should explain why it may be necessary in your case. - Do you have any kind of presale or allow anyone to buy from the estate before it is open to the public?
Unfortunately, many companies allow dealers, preferred customers, their workers, or even themselves to buy early. Some may even have a presale for those “special” people – often the night before the sale opens to the public. NOTE: If their procedures include selling ANYTHING TO ANYONE before opening the sale to the public – they would not be on my list. - Do you or your staff buy at the sale?
There is nothing wrong with allowing the company workers to make purchases as long as they do so AFTER the customers have come in and have a chance to buy the items. Plus, the person making the purchase cannot be the one who sets the price. The customers come first every day of the sale – during all discounting periods. - How do you handle discounts?
This is rather variable depending upon the company but the general pattern in a three-day sale is:- First day – none
- Second day – 25%
- Third day – 50%
The important thing is that they do discount as this is the “norm” in estate sales and doing this the right way is critical to success. It should at least somewhat follow the pattern above but variation is not unusual. NOTE: If the company does not offer discounts or does not include a 50% as at least part of the pattern – they would not be on my list.
- Do you bring in other items to the sale?
This is an absolutely critical question and, unfortunately, most companies in this area will tell you they do and then try to convince you of how this will improve your sale. And it will, for them. They will try to convince you that your sale will do better if it has more in it. That is true, but the real issue is that this is YOUR SALE and they should be selling your items. While they may present the items as being on commission as leftovers from other sales or from an estate that weren’t large enough for their own sale, often they are not. Many are selling things that belong to them. Regardless of that, their sales efforts should be 100% towards your items. It is your house and your sale. If you have a dining room table and they bring in one of their own to sell (supposedly to make your sale more attractive), whose table do you think they will try harder to sell? Yours, that they will make 40% of the sales price or theirs that they make 100%? NOTE: If anyone wants to bring in other items to YOUR SALE – they would not be on my list. - Do you charge sales tax?
The State of Texas requires that Estate Sale companies charge sales tax. Families doing their own sales do not have to charge tax. NOTE: If the company does not charge sales tax – take them off your list! You can personally be held responsible for the taxes, even years later. - What forms of payment do you take?
A professional company will take cash and credit cards. Most will take checks but with the prominence of debit cards now, some do not. NOTE: If the company only takes cash – they would not be on my list. Accepting credit cards is a necessity for a professional company and a successful sale. It should be noted that a company that does not take credit cards should not be considered as being a professional business – no matter the industry. Industry studies have shown that taking credit cards can increase your sales totals by as much as 25%. - What kind of insurance do you have?
Your household insurance should cover any liabilities related to the sale, but the Estate Sale Company should also carry liability insurance. - Do you have a contract?
All estate sales should be done under a contract to protect both parties. NOTE: They would not be on my list if the company does not have a contract that spells out precisely what they are required to do and when. - When do you make the settlement?
There is not an exact correct answer here, but the settlement date should be reasonably soon after the sale. Up to 7 days may not be unusual. Longer than that really should be questioned. NOTE: If the company does not settle with you within 7 days – they would not be on my list. - What do you do with the leftovers?
The company should make every effort to get rid of the leftovers making any money possible. That may include selling to anyone including flea market dealers, resellers, etc. However, in most sales, there will be leftovers. Those leftovers still belong to the estate, and it is you who must advise the company on what to do with them. That is usually a part of the contract. Many companies donate the leftovers to a local charity, but depending on what is in the contract, it is at your discretion. Charging for the removal of leftovers is sometimes done, but that is not the norm locally. NOTE: If the company keeps the leftovers as part of their contract or usual practice – take them off your list! - How do you leave the house when the estate is over?
This varies greatly and is usually covered by the contract. A professional company will leave the house broom clean (swept, mopped, vacuumed, and with the counter wiped down).
I hope this information will help you choose the right Estate Sale company for your estate. If you have any questions, you can certainly contact me at your convenience.
Remember that I will happily meet you for a FREE consultation to review your needs. Even should I not be able to help you by providing the services myself, I will be happy to assist you with finding someone who can or, perhaps, offer you other solutions.
