Unfortunately, when someone passes, their loved ones are often left to deal with their estate. This can be an extremely difficult and confusing time. Managing someone’s belongings can be overwhelming and expensive, so many choose to hire an estate sale company to take care of everything for them. People often ask whether or not to use an estate sale company. What do these companies charge, and is it worth it?
What is an estate sale?
An estate sale company is a business that specializes in helping people liquidate the contents of a home. This can be helpful when someone is downsizing, moving, or dealing with the estate of a loved one. When working with an estate sale company, you can expect them to handle all the sale details. This includes appraising the items, advertising the sale, and dealing with customers.
What do estate sale companies charge?
The company will take some form of commission from the sale. Some agents will charge by flat fee pricing, sliding scale commission, general merchandise-based fees, or a combination.
Minimum Sale Amount
Most estate sale companies have a minimum sale amount required to conduct a sale. This minimum amount ensures that the estate sale company can profit from the sale and cover its own costs associated with conducting the sale. This amount will vary from company to company but typically will be between $500-$1,000. Estate sale companies often advertise their minimum sale amount on their websites.
Flat Fee Pricing
A flat fee pricing is when an estate sale company charges a flat fee for its services. This fee is usually a percentage of the total sale and can also include a commission on any items sold. The flat fee pricing structure also allows estate sale companies to adjust their fees if the sale is larger or smaller than expected.
Estate sale companies typically charge a flat fee because it is easier to estimate their costs upfront, allowing them to provide a more accurate quote to their clients. Yellowbird Antiques & Interiors uses a flat fee of 40% commission of gross sales, with an additional fee of 10% if the estate contains over 10,000 items.
Sliding Scale Commission
A sliding scale commission is based on the total value of the estate sale. The estate sale company will take a certain percentage of the total estate sale, depending on the size and value of the estate sale. The larger and more valuable the estate sale, the higher the percentage that the estate sale company will take. This is due to all the associated costs of dealing with a much larger estate, such as finding customers, cleaning, and staging.
General Merchandise Sale Percentage
The general merchandise section of any estate sale is where you’ll find all sorts of items, from clothing to household goods. The percentage of the sale dedicated to general merchandise can vary depending on the size and scope of the sale. Generally, the standard commission is 30-40% of gross sales.
What Influences Commission Rates
Commission rates vary significantly from one broker to the next. So what influences these rates? And how can you make sure you’re getting a fair deal?
Size and Value of Items
Typically larger and more valuable items will result in a higher commission due to the work required to sell these items. These include high-end art, vehicles, precious jewelry, and other rare collectibles. A reputable company will have a list of appraisers and collectors to find the right price for your rare items. Sometimes, estate sale companies may be willing to negotiate separate commission rates for high-dollar stock.
Size of the Estate
Generally speaking, larger and more valuable estates will result in a higher commission fee. This is because larger estates will require additional staff, time, and work to complete the sale appraising, staging, and organizing. However, suppose you have a smaller estate but an abundance of items (10,000 or more). In that case, this will also result in a higher commission.
Once the estate sale is done, there are often leftover unsold items. An option an owner has is to hold a post-sale cleanout, a sale at 12:30 on the last day to sell off the remainder of the estate by the room. This allows the owners to get rid of the most items while getting the most money from the sale. Some companies will deduct a cleanout fee from the proceeds, so it’s important to ask about this upfront.
Sale Time Frame
The time an estate sale company has to prepare for a sale can influence the commission rate. Suppose the company only has a few weeks to plan and organize. In that case, it may charge a higher commission fee to cover the additional work required. For example, when several buyers are interested in a property, the estate owner may want a quick-turnaround sale. In this circumstance, the estate company will need to charge more to meet the truncated time demand.
However, if the company has several months to prepare, it may be able to offer a lower commission rate.
Regional Price Differences
The price of hosting an estate sale can differ depending on the location. Estate sale companies will have regional rates depending on whether the sale occurs in a rural or metropolitan area where the company specializes. For example, metropolitan areas can have higher commission rates due to the higher cost of living and business. However, other companies might set a higher commission rate for lower populated areas due to distance and customer base.
As a result, when planning an estate sale, it is important to be aware of the regional differences in commission rates so that you can choose the company that will offer you the best rate.
There may be several odd circumstances when liquidating a loved one’s property. One of the most common is the need for extensive cleaning. This can be the case when the house has fallen into disrepair due to extreme clutter, hoarding, or abandonment. In these situations, the estate sale company will incur additional costs to have the property professionally cleaned and presentable for sale.
Another circumstance occurs when a property is located in a remote area that is difficult to access. This may require the company to hire special equipment or personnel to prepare for the sale. Experienced estate sale companies are equipped to handle any challenges regardless of the situation.
What Makes Hiring an Estate Sale Company Worth It
There are plenty of reasons to hire an estate sale company, but perhaps the most important one is that it gives you peace of mind in a difficult time. An estate sale company can take care of everything for you, from advertising to organizing and conducting sales.
An experienced team will have expert knowledge in appraisal and assessing the value of antiques and collectibles. They have a network of collectors and buyers interested in rare items to help you get the best price possible for your belongings. They will also take care of paperwork and payments to take the stress off your shoulders. Because of their knowledge and network, estate sales result in a higher return on profit than if you were to conduct the business yourself.
Tips for Hiring an Estate Sale Company
Hiring an estate sale company is often the best option when liquidating an estate. But with so many companies, how do you choose the right one? Here are some tips to help you find the right company for your needs.
The company’s experience and expertise in conducting estate sales.
Ask how many years the company has been in business and how many sales they conduct yearly. This allows you to gauge the size of the company and its level of experience. Another way to verify the level of service you will receive is to speak with those who have had previous dealings with the company. This can be done by asking for references, speaking with previous clients, and checking online reviews. You can verify a company’s experience online by checking its standing with the Better Business Bureau.
Are they insured?
When hiring an estate sale company, it is vital to verify that the company is insured in case an incident occurs during your sale. Ask the estate sale company if they have sale-related incidence insurance. For example, liability insurance can protect you during a sale in case one of your belongings is damaged, or a customer is injured. Taking this precaution can help ensure that your estate sale goes smoothly and that you are protected if something goes awry.
Make Sure to Get a Written Contract
Be sure to get a contract that dictates all aspects of the sale. This document should state the services being provided, the company’s fee structure, what items are included, and the date of your sale. This document will protect both parties in case of any disputes. By having a written contract in place, you can be confident that the estate sale company will provide the agreed-upon services promptly and professionally.
Read Their Commission Structure
The contract should clearly state how much the company will take in commission. Check to see if there are different rates for different types of items, and verify that all sale fees are included. For example, some companies may charge for advertising, while others may not. By reading the commission structure carefully, you can be sure you are getting the best service and deal possible.
Ask How Funds are Distributed
It is important to include clear payment deadlines in your contract. Most companies will distribute proceeds within two to three weeks from the end of the sale. If you require the funds sooner, stipulate that in the contract. You should also find out how the company will distribute the proceeds. Some companies will issue a check, while others will distribute the funds via direct deposit or wire transfer.
Clarify About the Removal of Goods: Before and After
Many companies have a no-presale policy. This means that items listed in the contract can not be removed or sold before the estate sale. Some companies assess a 50% penalty for the pieces sold if this occurs.
It is also essential to clarify what happens to unsold items after the sale is completed. Most companies will remove the leftover items from your home. Whether you want to donate or toss your remaining items, make sure that it is specified in writing before the sale takes place.
By asking these key questions, you can be sure to hire a reputable and professional estate sale company that will help you through the process with ease. With a little research, you can have peace of mind knowing that your estate sale is in good hands.
Trust Yellow Bird With All of Your Estate Sale Needs
Suppose you are in the process of downsizing, moving, or liquidating an estate. In that case, choosing the right company to help you is essential. At Yellow Bird Antiques and Interiors, we believe our years of experience and dedication to customer satisfaction make us worth your consideration.
We provide comprehensive solutions for estate sales in northeast Georgia. Yellow Bird offers a full range of services and takes care of everything from start to finish to make the process as smooth as possible for our clients. Contact us today to learn more about how we can help you through this transition.