An estate sale is one of the cost-effective ways to liquidate your assets, especially when you need to do so quickly. Here’s some of what you need to know to be successful.
During an estate sale the public is invited into the home to purchase the possessions. Most sales are conducted over a weekend, starting Saturday morning at 9:00 am and ending Sunday afternoon at 4:00 pm, with discounts being offered Sunday afternoon. There are several kinds of people who attend these sales:
- Regular estate sale customers
- Neighbors from about a mile radius from your home
- People there to buy items so they can resell it elsewhere at a higher price.
Most of the buyers look at these sales as social events, meeting with people who enjoy the chance to be social with others that value old stuff. Often young couples use these sales to fill their new homes while starting a family. Others are looking for collectibles, items with historical significance, even if it’s something like an old photo or a baseball card, something worth a dollar or two, but they still enjoy getting out.
If you want to have a successful sale, do your best to maintain a carnival atmosphere, which excites buyers and encourages additional sales. That’s also why we accept credit cards. It’s a buzzkill to have the owner in the background eyeballing the customers while bemoaning the discount sale of every precious item in the house. Would-be buyers will feel bad and go back to their cars in search of the next sale somewhere else down the road.
Preparation is important
Before the sale, we work with you to set up the items in the house like a mini-retail environment. We group similar items, display them on tables, and price them. The pricing is based on the market value of the item, which is based on the prices received at a recent sale of a similar item in the area. The sale is advertised on-line, in local papers and with lawn signs in the neighborhood.
We split the revenue from the sale, and in order to ensure our incentives are aligned, we pass through the costs, which generally are labor (for set-up and the days of the sale), advertising, permits, and security. Together we decide on the budget for each of these expenses.
Sales at these events often involve haggling which may include group purchases of say, a box of small hand tools or cosmetic items. Items with a bigger price tag are set in a place for special oversight.
Our goal is to move the most merchandise as a reasonable price in a short time. We keep track of the daily sales by tracking the gross proceeds at the end of each day. While there is no legal requirement (under federal or state law) to keep track of the sale of individual items, we often will document the sale for higher-priced or items of special interest that the owner identifies in advance. If the owner desires more detailed reporting of items being sold, we are happy to provide those services, including detailed pricing of every major item, over say $20 and specific receipts, but that additional control may cost more than the profits you’ll get from the sale.
Estate Sales, Tag Sales, Garage Sales
The difference between estate sales, tag sales and garage sales is largely defined by the quantity and value of the items sold. By some definitions, estate sales referred to sales after a person’s death where an entire estate was being liquidated, but a more general definition is that an estate sale may occur whenever a family is moving out of the house.
Tag sales and garage sales don’t necessarily imply that a move is occurring. They are generally used for selling fewer items from a home with fewer goods to sell. To make those sales economically viable we try to lower the costs of those sales by reducing the advertising budget and sometimes conducting them on a single day.
Sometimes for higher end items and collectibles, we seek out interest from private buyers. There are two broad classes of these buyers:
- Retail buyers who are buying items for their own personal use. For example, there are people who seek out memorabilia for Harley Davidson items or anything related to Elvis.
- Wholesale buyers – often dealers – who are buying items for resale. They are essentially buying an item now to be sold to a retail buyer sometime in the future. Wholesale buyers will most always have cash for items that they believe have market value, but their prices will be lower since they need to have room to cover their costs of holding the inventory until they do sell the items.
Auctions are another option we provide. They are more regulated than Estate or Tag Sales, and consequently they provide more specific sales records, but also appeal to a smaller audience. Still they are effective in some circumstances. There are several ways to do this.
- On-site auctions. We set up the auction in your home much like we do for an estate sale or tag sale, and then on the day of the sale the auctioneer walks through the house with a microphone taking bids on various items as they go. Where an estate sale takes all of two days to conduct, an on-site auction often happens in 6 hours or less plus pick-up times, but there are fewer buyers.
- Auction houses. The benefits of taking this approach are a) your items can be grouped with other items drawing a better crowd who may bid more and b) you can relieve the time pressure of getting the sale since the auction facility will temporarily warehouse your items.
The cons of his approach are a) the items will require transportation, b) you will be paying for the warehousing one way or the other, and c) it’s not practical to sell all of the items in the house this way. It’s a partial solution.