How Much Do Estate Sale Companies Charge? (Full Estate Sale Cost)
Paul Williamson – June 19th, 2020
Paul Williamson – June 19th, 2020
When a homeowner passes away or moves to an assisted living facility, their family members typically host an estate sale. The family must sell the loved one’s possessions before a real estate agent can list the property. Downsizing and divorce are also reasons for estate liquidation. A typical estate sale, or tag sale, takes place over two to three days. Sales often begin on Thursday or Friday and last until Saturday or Sunday. Most estate sale companies appraise, photograph, and price items beforehand. When it comes to cost, estate sale companies vary. When comparing the costs of estate sale services, be sure to interview a lot of companies and provide them with a lot of details. That way, you can get a better understanding of how much estate sale companies charge.
There are a lot of factors that go into how much estate sale companies charge. But most companies charge a minimum total sale amount. From there, they tend to work based on a commission structure, receiving a percentage of the gross sales. However, estate sale companies can also charge a flat rate or a sliding commission fee.
Naturally, the estate sale company wants the sale to generate enough income to compensate them for their work. Companies often specify minimum total sale amounts. This means that the total value of all sale items must meet or exceed a certain dollar value.
Most estate sale companies take a standard commission, typically 30 to 40 percent of the gross sales, for an estate sale that fits normal parameters. Sales that require extra work often incur additional fees.
Estate sale liquidators gauge the amount of effort they’ll put forth, and also the return they’ll receive from their hard work. For that reason, they usually choose a sliding percentage scale based on the sale’s projected total. They’ll charge a higher percentage rate for smaller estates, and a lower percentage rate on a larger estate. Most states require companies to pay sales tax on the sale income.
Flat fee pricing is rare. Most estate sale companies operate within a commission-based structure and charge a flat fee for additional services. A few companies charge one flat fee for all estate sale services. This practice could be detrimental to their bottom line, as they won’t be compensated for extra work.
The standard commission rate structure applies to many estate sales. Several factors may cause the estate sale company to increase their commission rates.
A larger estate will typically involve a spacious home with more furnishings, household items, and collectibles. So, the estate sale company will need additional time and extra staff for cleaning, appraising, pricing, and organizing sale items. Afterward, there will likely be an extensive cleanout of the unsold items. Taken together, these factors probably mean the estate sale company will charge a higher commission rate.
If your estate sale includes higher-ticket items such as vehicles, boats, or fine artwork, you may be unwilling to pay the standard commission rate for those items. The company will likely adjust the commission rate downward to retain your goodwill.
Your estate sale cost involves many variables. Some services may incur additional fees. When interviewing potential estate sale companies, ensure you have a clear understanding of how each of the following services may impact your post-sale proceeds.
Learn about the company’s crowd control plan. Ask if a security guard will be present to protect valuable items such as jewelry, furniture, and fine collectibles. If a guard will be present, ask if this will incur any additional fees.
Although advertising the sale will help to attract buyers, it represents an additional expense that will decrease your estate sale proceeds. Be sure to ask about the estate sale company’s advertising plan fees. Evaluate each company’s advertising on targeted sites such as Craigslist.com, EstateSales.org, and EstateSales.net. Look for catchy headlines and appealing photos. The company should also promote the event through its email lists, social media channels, and targeted websites.
After the estate sale wraps up, there may be large, heavy, or bulky items that must be removed from the house. You’ll likely be charged a fee for these services. Be sure to ask about this fee and include it in your cost analysis.
After the sale, there will be leftover furniture and household items. Some companies assess an extra fee for clearing out the house and getting it to broom clean. Other companies include it in the estate sale cost.
Ask the estate sale company to note all services included in the sale. Services such as extraordinary cleaning, pest control, and trash dumpster rental will likely incur extra fees.
When liquidating a loved one’s property, there may be some unusual circumstances you encounter. Be sure to tell the estate sale company about these circumstances, as they may affect what the company charges. Be completely honest, as dancing around the details doesn’t help either party.
Sometimes, an estate sale company may be faced with an impossible hoarding situation or a filthy home. The company must spend considerable time to make the home presentable.
Let’s say the house is located halfway up a steep mountain road. Or, the property is situated in a remote area with substandard roads. If getting to the house is a challenge, the estate sale company may want to be compensated for that extra work.
If a deceased person’s property is involved in probate, the estate sale company may be asked to supply detailed sale information to the court’s probate manager. The estate sale company owner may also need to appear in court. It’s reasonable to expect an extra charge for each task.
Let’s say you want a quick-turnaround estate sale, as several realtors are interested in the property. In this case, you’ll probably pay more for the estate sale services compared to a normal-timeframe sale.
In addition to the estate sale costs and additional fees, these are some other items that may affect the cost of your estate liquidation. Be sure to ask these questions when choosing your company.
Learn how long a specific company has been hosting estate sales, and how many events they execute each month. If it’s an established business, they’re more likely to operate in an ethical manner, as they have a reputation within the estate sale industry. A professional estate sale company has connections with appraisal experts and other industry professionals. They likely have a network of potential buyers, along with hundreds (or thousands) of email followers. Their network of connections bodes well for the success of your sale. However, this may mean that they will charge more for their expertise.
Ask the company how many sales they have conducted in your town, especially within the past three months. Their answer may tell you whether they’re growing an estate sale business or expanding on a garage sale or yard sale hobby. Again, an estate sale company with a consistently high activity level will likely charge more for their services.
Determine whether the estate sale company is insured for sale-related incidents, such as a shopper’s injury while navigating through the house on the sale day. Ask if the company has a liability insurance policy, and request to see a copy of the policy’s Declarations Page. This will help ensure you’re covered in case of an accident. If the company does not have liability insurance, and a shopper is injured during the sale, you could be held liable for their expenses. Finally, the company will request that you have an active homeowner’s insurance policy until the house is sold.
Learn whether the estate sale company will bring items from other estates to your estate sale. This is a common practice, as more items may drum up additional interest. This shouldn’t affect your fees. However, you may find the practice annoying, as the company is recycling previous items for its own benefit.
If the estate sale company runs a consignment shop, that’s a major concern. Some dual-business owners do a mediocre job with their estate sales. Afterward, they take the most valuable unsold items back to their store and retain the entire sale proceeds.
Your estate sale costs can vary widely in large metropolitan areas vs rural locations. When looking at estate sale companies, be sure to compare companies in both rural and metropolitan areas and obtain standard regional rate information. These differences can affect your bottom line.
Most estate sale companies pay their sellers within two to three weeks of the sale date. Ensure that you add a payment deadline to your written contract.
Before signing the estate sale contract, ask for references from three former clients. If the company balks, that’s a huge red flag. In addition, research their reviews on the internet. Look specifically for hidden fees and other costs that previous clients were not expecting.
Insist on a written estate sale contract. Ensure that the terms of the sale, including extra fees, are clearly outlined. If there’s something you don’t understand, ask questions. Finally, never pay the estate sale fees upfront.
Ensure that the written contract spells out the estate sale commission structure. If there are specific commission rates for different groups of items, the contract should explain that structure.
Verify that the written contract includes all the estate sale fees, including extra charges. You want to avoid surprises that could hurt your bottom line.
If your estate sale involves special conditions, the company should state those terms in the contract. For example, you may need to arrange for special access to a gated community. Include this (or other) special conditions in the contract.
A reputable estate sale company will have associates with appraisal experience or will have connections to qualified appraisers. The company should also have a talent for pricing items at a good value while maximizing the seller’s return.
When items are attractively displayed on tables, or clothing is hung on easy-to-access racks, shoppers are more likely to browse those items. Ask the estate sale company to detail its merchandising and display plan.
A knowledgeable estate sale company will request that an expert appraiser price high-dollar items. If the company thinks the pieces will fetch more money through an auctioneer compared to the estate sale, they’ll send those items to one or more auction houses. Ask the estate sale company to create a written plan for auction items.
After you sign the estate sale contract, do not sell any estate sale items. If you do that, the estate sale company may assess a 50 percent penalty for selling those pieces.
At the end of the sale, company associates will remove unsold items from the home. If you donate any unsold items, add a contract provision stating that the company will provide a complete list of donated items.
Expect to receive your estate sale proceeds within two to three weeks after the sale date. Clearly state a payment deadline in your contract.
Of course, you don’t have to hire an estate sale company. There are other routes for liquidating your loved one’s estate. Some other routes include eBay, live auctions, and holding your own estate sale. However, your emotional attachment to the items may make it difficult to assign realistic prices. Holding an estate sale requires advanced preparation, and you’ll likely wait a couple of weeks for your proceeds. However, using an established estate sale company will help you to realize an overall better value.