What Does It Cost to Have an Estate Sale?
The estate sale business is growing every year. With an estimated 14,000 or more companies nationally, it can be quite a daunting task to find a reputable estate sale company to sell the contents of your estate. There are many questions you should ask a potential estate sale company (see Preliminary Steps to Take When Interviewing an Estate Sale Company), but the most common questions relate to what a company charges to conduct an estate sale.
Most estate sale companies charge a percentage (commission) of the sale proceeds of an estate sale. This typically ranges between 35% to 50% depending on the company, business model, the services they provide and their location. On the surface a lower commission may seem logical, but before you sign a contract consider what that lower percentage will cost you upon the conclusion of the sale.
By far the most common reason for considering an estate sale is to sell as much as possible and make the most revenue possible. To maximize the income realized from an estate sale the items must be sold at the highest price possible, which means that you need to examine the type of service you are getting from an estate sale company for their commission. This generally means a higher commission will generate more income from your sale than a lower or discounted rate. With an experienced and reputable company, you should expect a higher level of service. Service that includes spending an appropriate amount of time setting up, staging, researching and pricing your sale. It is especially important that the company spends time researching each item in the estate and is willing to consult with experts when necessary. Hiring a company with a certified appraiser can help in this area. This is where time spent really does equal more value and a significant increase in revenue from your sale, especially when there are unique items of higher value. You can also expect an inventory of the items being sold and other benefits such as keeping your sale appropriately staffed and quality marketing, including professional photographs. This all translates into a clean, beautiful, and organized sale with items appropriately priced, tagged and inventoried. High quality sales attract higher caliber customers that are willing buyers. These customers enjoy the retail experience of these sales and will spend more money, which increases income generated. This may cost 40% or 45% (compared to 35% for example), but when this amount of effort and time is spent in preparation for your sale you realize higher income. For example, if you hire a company charging a flat commission rate of 35% and the sale generates $14,500 then your check would be $9,425. However, if you were to hire an experienced reputable company charging 40% commission your sale might generate $20,000 in net sales, which means your check would be $12,000. This equates to $2,575 more revenue in your pocket!
So even though it may appear tempting to jump at a lower commission rate doing so may result in a loss of thousands of dollars. This can be compounded even further if the company is discounting their fee, 25% for example, but then adding additional fees on top of that. Some companies add set-up fees, staff fees, etc. And some are charging a minimum fee. Since these fees are fixed amounts they can significantly reduce your final check further by several hundred dollars or even thousands of dollars. Nobody wants to leave money on the table, so consider what you are paying for when you hire an estate sale company.
Jennifer Lamb, BS, PEL, CAGA
Co-owner of An Estate In Time, LLC
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