Estate Sale Contract (Free Template and Samples)
Paul Williamson – August 23rd, 2020
Paul Williamson – August 23rd, 2020
A well-written estate sale contract serves as the framework for a successful multi-day estate sale. The contract discusses the services that the estate sale company will provide, and it lists both parties’ responsibilities. Before working with an estate sale company, be sure to review and understand your contract. In this guide, we cover each of the various provisions in an estate sale contract. We also discuss the role of estate sale contracts and what contracts mean for cancellations. Once you learn about an estate sale contract’s provisions, you’ll be well-prepared for your upcoming estate sale.
A professionally prepared sale agreement provides a detailed estate sale framework. Within the estate sale industry, most estate sale contracts pertain to sales held in the client’s home.
Included in the contract are clauses and provisions that dictate how the estate sale will proceed. A thorough estate sale contract should outline pre-sale details, day-of logistics, and post-sale specifics. In other words, an estate sale contract should lay out the entirety of the sale’s details.
If you’re planning to use an estate liquidator for your estate sale, the first order of business should be signing a completed contract. Before you sign on the dotted line, however, be sure that you’re working with a reputable estate sale company, and ask an attorney to review the document.
A traditional estate sale contract includes many standard provisions. Ensure that the written agreement covers the pre-sale, day of the sale, and end of the sale tasks and procedures.
The contract’s pre-sale section specifies the estate sale dates and location. Typically, a sale begins on Thursday or Friday, and it runs through Saturday or Sunday. Estate sales usually take place at the client’s home shortly before a realtor lists the home for sale.
Generally, the estate liquidator appraises all items offered for sale. They use their professional expertise (and may conduct Google searches) to assign realistic prices. If the sale organizers call in a professional appraiser for high-end items, the contract should state who pays for that service.
On occasion, an estate sale inventory might include illegal or inappropriate items, such as taxidermy, ivory, alcohol, or firearms. The contract should reference local laws before stating how these items are handled.
The estate sale company will methodically complete the estate sale pricing and give most items an individual purchase price. However, similar items are often grouped into lots, with one price for the entire lot. Examples include a bag of 25 hair clips, 10 ring cases, or a box of books. The contract should state how lots are classified and priced.
Estate sales typically include furniture, furnishings, collectibles, and household items. A garage full of power tools, antique crocks, or a trailered boat, may also be in the mix.
Special-purpose sales may target fine art collections, vintage vehicles, or exclusive collectibles. The estate sale contract should describe all items to be included in the sale, along with a description of how they will be displayed.
If certain items are excluded from the sale, the contract should list those items. Alternatively, the client can remove those items from the home before the sale.
The contract should clearly list the estate sale company’s commission rates. These professional liquidators should base their percentage on the services provided along with the business’ years of industry experience. Additionally, the logistics of sales tax charged on items should be spelled out in the contract.
The contract should state whether the client receives their proceeds at the end of each sale day or at the end of the sale. Also, the agreement should note whether the client will be paid in cash or with a company check.
The contract should detail how the estate sale company will present the “Sold Items” list to the client. Whether the company uses a spreadsheet to track the items or employs specialized software to generate the list, the contract should state the exact format.
This important contract provision specifies how the estate sale company will advertise the upcoming estate sale.
Common advertising methods include street signs, print newspaper ads, and ads on social media (such as Facebook).
Marketing the sale to the company’s email list is another popular tactic. The company’s subscription to sites like EstateSales.org enables the company to include its estate sales in searchable databases.
The estate sale contract should state how these advertising and marketing costs will be paid for. Some estate sale companies include these expenses in their overhead costs. Other businesses charge for individual services or use a flat-rate approach.
On the sale day, a number of moving parts must come together to ensure a successful event. The estate sale contract should address each component.
For the sale to operate efficiently and for customers to smoothly go through checkout, the estate sale company should have sufficient staff on hand. Some larger sales require extra employees. If the sale includes high-end items, the estate sale company may ask a professional appraiser to value these pieces.
For a large sale, or an event with exceptionally valuable items, extra security personnel may be required. In all cases, the contract should note whether the estate sale company or the client will pay for these labor costs.
Some estate sales incur extra expenses, such as disposal of unsold bulky or large items. A labor-intensive post-sale house clean out, complete with rental of dumpsters, also adds to the cost. The contract should specify whether the client pays for the extra services or if they are included in the estate sale company’s service fee.
After the sale, the remaining items must be removed from the home. This process includes the disposal of unsold items as well as shipping and delivering large sold pieces. Traditionally in estate liquidation, many unsold items go to charitable organizations or to the company’s upcoming sales. The remaining items are often dumpster bound.
The contract should specify who is responsible for wrapping, mailing, and/or delivering any paid-for items that were left behind. Whether it’s the estate sale company or the client, the contract should note who pays for each service.
Details on unsold items’ disposal should appear in the contract. A reliable local charity will gladly coordinate the removal of items not sold. If the client can’t meet the charity at the site of the estate sale, the estate sale company will have to be available to meet with the charity. The contract should specify how much the estate liquidator charges to wait for the charity pickup.
If the estate sale company operates an antiques and collectibles shop, the business may place some unsold items in its shop. Alternatively, the company may pack up the items for inclusion in another estate sale. Dumpster disposal of unsold items is usually a last resort.
Estate sale contracts typically include numerous additional clauses. Each one addresses a specific scenario that may arise before, during, or after the sale.
This provision details how the estate sale company will access the client’s home to prepare for the sale. Gate or entrance instructions, along with a key location or alarm deactivation code, may be included.
Some estate sale companies banish the client (and their relatives) from the home during the sale preparation period and on the sale days. Companies likely created this restriction to prevent emotional clients from seeing strangers handle their family’s personal property.
The estate sale company may provide an estimated sales total for the event. The contract should state what the estimated sales total is, and it should also state that this is not a guaranteed minimum sales number.
When the client finds a “hidden treasure” that may have considerable value, they may decide to keep the item.
However, the estate sale company has been asked to make money for their client. The estate sale contract should explain the appraisal process and provide guidelines for the resolution of any hidden treasures.
Sometimes, items disappear after they’ve been inventoried and appraised for the sale. This can happen if the client just can’t bear to see the item sold, or a random relative suddenly shows up to claim items they want.
Address this issue in the contract, and list a deadline by which all items must be removed from the home or paid for.
If items suddenly disappear after that date, specify the consequences.
With so many shoppers using credit cards, transaction fees can become a noticeable expense. In certain states, estate sale companies ask the client to assume these costs. In other states, this is an illegal practice.
If the client isn’t happy with their purchase, they may ask for a refund (or chargeback). Similar to a retail store, the refund comes out of the estate sale company’s income. The estate sale contract should include policies on both issues.
Sales tax laws are different in every state. In all but a few states, estate sale companies are required to collect (and pay) sales tax for the client’s items sold at the estate sale. Each state’s Department of Revenue will have the current information on sales tax requirements.
It’s worth noting that many estate sale companies do not pay sales tax on their sales receipts. That may create a liability for the client, who is frequently the owner of the home in which the sale took place.
Depending on the region and time of year, unfavorable weather could force an estate sale delay or cancellation.
Examples of weather incidents include icy roads during a Midwest winter or a hurricane during a Florida summer.
Ensure that the contract includes an inclement weather back-up plan.
Each state has specific laws related to sales tax, credit card fees, and other issues. The estate sale company must comply with these often-changing legal requirements. To ensure your estate sale contract complies with local laws, we recommend getting legal advice.
Estate sale practices vary from state to state, and they even vary between cities within the same state. The contract should incorporate these regional differences. Regional differences will be reflected in pricing as well as procedures.
Every weekend, there are many estate sales held across the country. That means thousands of people are traipsing through strangers’ homes, resulting in a huge potential for accidents.
To protect themselves against lawsuits, estate sale companies should have liability insurance for shoppers. The insurance policy should also cover damage incurred to the home and to items on the premises. The client should have a current homeowner’s policy. Be sure your estate sale contract outlines liability insurance.
In most states, businesses (including estate sale companies) must carry worker’s compensation insurance for their full-time and part-time employees. This policy covers employees who are injured at work or become ill following a work-related accident.
Worker’s compensation insurance pays an affected employee’s medical expenses and lost wages if they must take time off to recover. If the work-related accident results in the worker’s disability, the worker’s compensation policy also pays disability benefits.
Finally, estate sale professionals should always be bonded, as they often handle valuable items, such as expensive jewelry and fine art. The bond issuance means the bonding company has performed a thorough background check, and has found that the estate liquidator is trustworthy enough to be issued a bond.
Estate sale contracts cover three additional types of sales. Although less common than traditional estate sale events, these methods present valid options for disposing of a client’s estate items.
In a consignment contract, the estate sale company accepts the client’s items for consignment sale. Venues include the estate liquidator’s antiques and collectibles shop, a showroom, warehouse, or online platform. The contract states exactly how the items will be presented and sold.
A buy-out contract states that the estate sale company will purchase all the estate items for a single flat rate. This type of contract does not fairly compensate the client for their more valuable items.
A clean out contract can take two forms. In its first form, the company receives payment to clean out the estate’s entire contents. The company agrees to sell items in a traditional estate sale or through consignment. They will discard the remaining items.
Alternatively, the company accepts a flat fee for the estate clean out. They are free to sell or dispose of the estate’s contents as they see fit.
The following are three estate sale contract samples. Use them to gain a perspective on different companies’ styles and content. The contracts may also reflect regional differences.
A printable estate sale contract enables you to enter customized estate sale information. View this free estate sale contract template to begin formulating the specifics of your upcoming estate sale.