If you are unfamiliar with estate sales but looking into having one due to a recent inheritance, a relative who passed away, or the downsizing of your home, you may get overwhelmed by the complexity of estate sales. Estate agents follow many different models of operation depending on the location of the sale, the value of the items being sold, and the habits of the agent involved. For that reason, it is imperative that you get a written contract from your estate agent that lists the specifics of your estate sale. A basic contract should include the following items.
Your Estate Agent's Fees
Generally, estate agents work by taking a percentage of your final sales. On average, the commission is around 35%. Some agents offer sliding scales, where the estate agent takes a lower percentage once a certain threshold has been crossed. Other estate agents may offer you a flat fee for all of the items you intend to sell.
However, this may or may not include extra services such as photographing items, advertising the sale, tent and/or chair rental, and removal of unsold items. It is important that your contract outlines exactly what the estate agent's fee covers and what extras you can expect to pay.
A Timeline for Processing, Sale, and Compensation
Many estate sales can be set up within days and completed within weeks. However, some agents may be booked currently or your estate may take extra time to sort through, delaying the amount of time before your sale can be held. It is important that your contract include a specific date range for when your items will be processed, when and where your sale will be held, and when you can expect to receive your portion of the compensation from sold items.
Whether Your Estate Agent and/or Their Employees May Purchase Estate Items
Many estate agents will purchase some of the items from your estate for their personal collection or to resell through another auction. Although this can be done ethically, it can also cause the estate agent to price your items unfairly in order to ensure they get the items they desire at a price that is less-than-fair to you. To prevent this, your contract should include a clause that bars your estate agent from purchasing any of the items from your estate.
This type of clause is unnecessary if you plan to sell your entire estate to an estate agent for a flat fee.
Whether You Will Be Allowed to Attend the Estate Sale
Some estate agents find it difficult to complete estate sales while the owner is present. If the estate agent is worried that you might make a scene or become emotional during the sale, they will likely include a paragraph stating that you should not be on the premises during the sale. If you feel like you need or want to be present during the sale, make sure that this section of the contract is amended to allow you or a representative to be present before you sign your contract.
Whose Insurance Will Cover the Estate Sale
If the estate sale is being held in your home, it is likely that you will be responsible for providing adequate liability insurance. You should ask if your estate agent has liability coverage and whether you will need to take an additional rider out on your insurance for the duration of the sale. This information should be included in your contract in case anyone is injured on your property during your estate sale.
If you are planning on holding an estate sale, you should carefully read your contract and ask your estate agent about any specifics that concern you. Go to websites like this one for more information.