The Realities of Having an Estate Sale

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By Ron Wynn

People have many reasons for getting rid of their stuff, but most often an estate sale is for exactly what it says. It’s to liquidate a home of its contents after someone passes away or possibly when someone has moved in with children or to an assisted living home that cannot accommodate one’s personal furnishings and accumulated possessions.

I’ve seen people stress out, siblings become frustrated to the point of anger, and families split to an impasse, missing perfect opportunities having far more financial impact. Let’s eliminate the 5% of all estate sales that include mega value signed art, rare watch collections, exotic cars, furs, coins and elaborate and significant pieces of high-value jewelry. The 95% of remaining estate sales have ordinary to antique furniture, art, various collectibles, rugs, vases, porcelain, glass, garage machinery and tools, silverware, tea sets, fine china, etc.

Typically, the dollar amount offered by a dealer is 20 cents on the dollar for value, or perhaps a consignment arrangement might be proposed with a 35% commission. If the estate sale company guarantees everything to be sold and the residence to be left broom swept, the likelihood is the estate sale professional will rarely offer to sign on for less than 40% commission with a minimum guaranteed payment to them in some cases.

A typical furnished home of under 4,000 square feet will usually end up compensating the homeowner from a nominal amount to $25,000 unless the owner is piece by piece selling which is tremendously time-consuming with no guarantees.

Garage sales have become a Sunday sport for people who are bargain hunters, usually not intending to spend more than $200 unless they are shopping for something specific. Of course, there are always dealers with no money constraints waiting to jump on rare undervalued items to which the owner is clueless to value. There are many sad victories quite often where the dealer has the valuable knowledge and the uninformed owner is simply dumping contents of the home.

At the end of the story, my advice is the following:

  1. If you have reasons to believe that you have some exceptionally valuable pieces, by all means, have the estate’s contents appraised by a licensed fee appraiser.
  2. Always have hand-made antique rugs, fine jewelry and significant pieces of art appraised by an appropriate specialist.
  3. Meet with family to discuss who will get what, and how to move forward with the process.
  4. Know in advance that emotions and in some cases family dysfunction might jump in when unexpected. Jealousy or resentment among siblings is a true, but unfortunate reality in some cases.
  5. Keep your belongings insured and secured if they have value and take photographs before allowing anyone near anything. Keep a close eye out for item lifters if you are conducting your own sale.
  6. Know in advance that there is a fair share of thieves and also unethical dealers, but there are also many wonderful, honest and helpful people too.
  7. Consider the give to charity and get the write off deduction. There are appraisers who will document value in a legitimate and acceptable way for IRS to be satisfied.
  8. As a significant last item, go back to 95% of all cases. Don’t risk getting into fights with family members, stressing yourself out and killing yourself by doing tons of work and hosting numerous estate sales thinking that you will make big bucks and in the meantime lose out on the best-selling season for selling the house.

 

A good bidding war with the proper preparation and guidance may easily produce a selling price $100,000 over the fair market value simply based on timing, limited supply and exceptionally strong demand, which can end up adding significant amounts to your walk-away cash equity, while stressing out and losing sleep over what the estate sale will end up producing in dollars. As a real estate advisor and skilled negotiator for over 30 years, I have seen both: 1) Homeowners miss the golden opportunity while squabbling over estate sale issues and 2) Homeowners making three times the money from overbids while selling the house in comparison to what they ultimately pocketed from an elaborate estate sale. Call me to discuss these and other thoughts or email Ron@RonWynn.com.