While “estate sale” might sound like a phrase used in high society, it’s simply a large, organized sale of someone’s possessions, typically held after they’ve passed away or moved. Unlike your typical garage or yard sale, an estate sale is far more extensive, often covering the entire contents of a household. This might be necessary to pay off the deceased’s debts or to distribute their assets among their heirs. But other situations may also necessitate an estate sale, including divorce or downsizing.
A financial advisor can help you take stock of your assets and make a plan for them for when you’re gone.
What Is an Estate Sale?
An estate sale, also referred to as a tag sale in certain regions, is a method of liquidating the belongings of a family or estate. While just about anyone can hold an estate sale, they’re usually organized by professional estate sale companies who price items based on their market value.
An estate sale can include just about any items that the estate owns. This might vary from everyday household items like furniture, kitchen appliances, and clothing to more valuable items like antiques, jewelry, art and vehicles. Essentially, anything that the individual owned and left behind can be included in an estate sale. In some cases, even the house itself may be sold as part of the estate sale.
However, a person doesn’t need to die for an estate sale to be held. Other circumstances may necessitate one, including:
- Divorce: A couple might need to divide their shared assets and use an estate sale to do so.
- Downsizing: Individuals might need to eliminate excess belongings before moving to a smaller home.
- Bankruptcy: Assets may need to be sold off to pay creditors.
Estate Sale vs. Garage Sale
Despite both involving the sale of used goods, estate and garage sales differ vastly in scope, purpose and organization.
For starters, the nature of the items sold is often vastly different. Estate sales often involve selling off an entire home’s worth of items, including high-value items. On the other hand, garage sales typically involve everyday items like used clothing or outdated electronics.
The organization and pricing methods also differ significantly. Estate sales are usually organized by professional estate sale companies who price items based on their market value, whereas garage sales are often DIY endeavors, with sellers pricing items at whatever they think they can get. The overall objective of the sale is also different: estate sales are usually held to liquidate a large portion of one’s belongings.
In contrast, garage and yard sales are typically held to declutter and make some extra cash.
The Role of Estate Sale Companies
Estate sale companies play a pivotal role in these sales, managing the entire process from start to finish. They lift a significant burden off the shoulders of the estate’s representatives by handling intricate tasks such as appraising items, organizing and displaying goods for sale, pricing items based on market value, advertising the sale to attract potential buyers and overseeing the event itself.
For example, consider an estate sale where items like antique furniture or rare collectibles are being sold. These items require expert appraisal to price accurately. Here, estate sale companies bring in their industry knowledge and experience to ensure these items are priced appropriately, aiming to maximize the estate’s revenue. However, it’s crucial to remember that while these companies strive to achieve the best possible results, the outcome may vary depending upon numerous factors.
Transitioning from understanding the role of these companies, choosing the right one becomes a critical task. Potential clients should consider factors such as the company’s experience, pricing structure and reputation.
A company’s track record can often be indicative of its reliability and professionalism. Reviewing the types of estates that they’ve handled in the past and customer reviews can also provide valuable insights. For instance, a company that has successfully managed large estates with high-value items could be an excellent choice for a similar estate.
The cost of hiring an estate sale company can vary based on a multitude of factors. These companies typically charge a percentage of the total sale proceeds – around 30-50%, according to the National Estate Sales Association. However, this percentage can fluctuate depending on the company and the specifics of the estate. Some companies may charge a flat fee, while others may have additional charges for services like trash removal or special appraisals.
Pricing of Estate Sale Items
Estate sale companies bring their expertise to the pricing process. They are skilled in pricing rare and antique items that a layperson may not accurately value. Their knowledge of market trends enables them to price items to sell. Their fees, which are typically a percentage of total sales, get factored into the price of items, potentially raising prices slightly.
Estate sale pricing considers many factors such as the condition, rarity and market demand of an item. Buyers can expect a range of prices at an estate sale. Household items might be priced comparably to garage sale items, while rare collectibles might fetch prices closer to their appraisal values.
What to Expect on the Day of an Estate Sale?
Knowing what typically happens during an estate sale can help you prepare effectively and ensure a smooth process.
The day may begin with an early morning setup where estate sale professionals, who play a pivotal role in the process, arrange items for optimal visibility. This is a key step as the presentation can significantly impact how quickly and for how much the items sell.
Estate sale companies handle a variety of tasks, from staging the home and pricing items based on their market value, to advertising the sale and managing transactions. With their expertise, they can effectively organize and price items to attract buyers and yield the best possible returns. They may also offer additional services, such as cleaning up after the sale and donating any unsold items to charity.
Following the setup, the sale usually opens, often with a line of eager buyers waiting outside. It’s not uncommon for passionate buyers to show up early, searching for unique finds or unexpected gems. The rest of the day is typically a bustle of transactions as various items are sold. Pricing at these sales is usually based on market value. However, as the day progresses, estate sale companies may offer discounts to encourage sales of remaining items.
Depending on the size of the estate, the sale could continue for several days until all items are sold or the estate sale ends. A typical estate sale might start at 8 a.m. or 9 a.m., with the busiest hours usually in the morning when the most desirable items are still available. The afternoon may see a slowdown in activity, with possible price reductions to encourage sales of remaining items. The sale usually ends by late afternoon, followed by cleanup and removal of unsold items. Of course, the exact timeline can vary based on the size of the estate and the number of items for sale.
How Much Can You Make From an Estate Sale?
So how much can a person or family make from an estate sale? That all depends.
For instance, the size of the estate and the quality and rarity of the items can significantly sway the potential profits. A larger estate brimming with high-quality antiques, rare collectibles or designer items is likely to pique interest and command higher bids. On the contrary, a small estate filled with common, low-value items might not generate as much revenue.
Another influential factor is the location of the sale. An estate sale in an area known for its appreciation of antiques may draw buyers willing to spend more.
The profits from estate sales are typically used to pay off debts, cover living expenses or even be invested for future use by heirs. Regardless, these sales can potentially provide significant financial relief for individuals during challenging times.
Bottom Line
Estate sales differ in purpose, scale and organization when compared with garage sales, and are typically held after a major life event like a death, divorce or downsizing. The critical role of estate sale companies in facilitating these sales, coupled with the complex process of pricing items and managing day-of-sale activities, contributes to the overall success of the event.
Estate Planning Tips
- Keep in mind that you may still need a will even if you establish a trust to hold and distribute assets to beneficiaries when you die. This is especially important if you have minor children because you’ll need to appoint a legal guardian to care for them in your will.
- A financial advisor with estate planning expertise can help you navigate this important planning process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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