People have many reasons for getting rid of their stuff, but most often, an estate sale is for exactly what the name suggests. It's to liquidate a home of its contents after someone passes away, or when someone has moved in with children or to an assisted living home that cannot accommodate their furnishings and possessions.
I've seen people stress out, siblings become frustrated to the point of anger and families split at impasse, all of whom miss perfect opportunities to have far more financial success. Let's eliminate the 5% of all estate sales that include megavalue signed art; rare watch collections; exotic cars; furs; coins; and elaborate, significant pieces of high-value jewelry. The 95% of remaining estate sales have ordinary and antique furniture, art, collectables, rugs, vases, porcelain, glass, garage machinery, tools, silverware, tea sets, fine china, etc.
Estate sale dealers typically offer 20 cents on the dollar. Or a consignment arrangement with 35% commission might be proposed. If the company guarantees everything to be sold and the residence to be left broom swept, the estate sale professional will rarely offer to sign on for less than 40% commission with a minimum guaranteed payment.
A typical furnished home under 4,000 square feet will usually end up compensating the homeowner with a nominal amount up to $25,000, unless the owner is selling piece by piece, which is tremendously time-consuming with no guarantees.
Garage sales have become a Sunday sport for bargain hunters, who usually intend to spend less than $200 unless they are shopping for something specific. Of course, there are always dealers with no money constraints who are waiting to jump on rare, undervalued items whose value the owner is clueless to; there are many sad victories where the dealer has the value knowledge and the uninformed owner is simply dumping the contents of the home.
At the end of the day, my advice is this:
— If you have reasons to believe that you have some exceptionally valuable pieces, by all means, have the estate contents appraised by a licensed appraiser.
— Always have handmade antique rugs, fine jewelry and significant pieces of art appraised by an appropriate specialist.
— Meet with family members to discuss who will get what and how to move forward.
— Know in advance that emotions — and, in some cases, family disfunction — might jump in when unexpected. Jealousy or resentment among siblings is a true but unfortunate reality in some cases.
— Keep your belongings insured and secured if they have value, and take photographs before allowing anyone near anything. If you are conducting your own sale, keep a close eye out for item lifters.
— There are a fair share of thieves and unethical dealers, but there are also many wonderful, honest, helpful people.
— Consider giving items to charity and getting the write-off deduction. There are appraisers who will document value in a legitimate and acceptable way for IRS to be satisfied.
— As a significant last item, go back to the 95% of all cases. Don't risk getting into fights with family members and stressing yourself out by doing tons of work and hosting numerous estate sales thinking you will make big bucks. In the meantime, you may lose out on the best season for selling your house.
A good home sale bidding war with the proper preparation and guidance may easily produce a selling price $100,000 over the fair market value simply based on timing, limited supply and exceptionally strong demand. This can add a significant amount to your walk-away cash equity, whereas with an estate sale, you could stress out and lose sleep over what the sale would end up producing in dollars. As a real estate advisor and skilled negotiator for over 30 years, I have seen both of the following:
— Homeowners who miss the golden opportunity while squabbling over estate sale issues.
— Homeowners who make three times the money from overbids selling the house in comparison to what they ultimately pocketed from an elaborate estate sale.
For more information, please call Ron Wynn at 310-963-9944, or email him at [email protected] To find out more about Ron and read his past columns, please visit the Creators Syndicate webpage at www.creators.com.
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