Whether your loved one has passed away or your parents are moving into a retirement home, you might consider holding an estate sale to liquidate their personal property. Organizing and understanding estate sales can help simplify the process, overcome legal complexities, and avoid unnecessary hiccups. To aid in this, you might require other real estate-related templates for smooth legal documentation. To help you understand what an estate sale is, we’ve put together this guide with some essential tips for holding a successful sale.
Estate sales, also known as tag sales in some parts of the United States, are public sales of household items. These sales are often held on-site and are usually large in scale. The primary purpose is to clear out large numbers of personal property items from home in a short time.
At these sales, customers can find everything from fine china to vintage clothes to coveted properties, sometimes even accompanied by a real estate purchase and sale agreement for potential buyers. Estate sales are especially on the rise in the United States due to their convenience for families to reach a large number of buyers who like reasonably priced antiques and art.
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Estate sales differ from the usual garage sales or yard sales, and they do not look like standard auctions with auctioneers. An estate sale can be recognized by the following characteristics:
Place — Sales are held indoors, usually inside the previous owner’s household;
Period — Sales can last for 2–3 days;
Event type — These sales are typically open to the public but may be limited to a certain number of individuals;
Selling process — Sales are driven by marketing and visual appeal;
Items for sale — Inventory includes all types of personal property;
Key figures — Estate sales are conducted either by family members or by estate sale companies or liquidators.
Every estate sale can be run differently, depending on the family’s preferences. In most cases, estate sales operate on a first-come, first-served basis. The items are marked with price tags and placed for sale in the seller’s home or in the home of the person whose items are being sold. People who come to the sale browse and gather the items they want to buy. After making a final decision, they go to a person who is in charge of the event to pay for their chosen items.
Although the process sounds simple, it can be time-consuming and emotional for a family member to undergo alone. Therefore, some people prefer to hire professionals to do estate sales for them. However, if you are interested in hiring someone to help, you may consider estate sale companies. Remember that they usually charge a commission of 30 to 40 percent of the sale, which can hinder the payment of some of your loved one’s debts.
You must stay organized and be aware of all the steps involved in holding your own estate sale. This will help you to prepare and to choose a realistic date to hold the sale. The following checklist will help to make the process less stressful and more successful.
Checking the local restrictions is definitely the step to start with. In some cities, you may be required to fill out an application before hosting an estate sale. Also, there might be specific restrictions on what you are not allowed to do, as well as sale restrictions. Make sure to check the city website or Homeowners Association (HOA) website, if applicable, as you prepare to host a sale in the area.
In addition, be sure to check for any social distancing requirements due to the pandemic and ensure that all regulations and laws are taken into account before the sale.
You will need to document, photograph, and keep a record of every item you include in the sale. It’s recommended to make a list of items in every room and categorize them appropriately. The items can be categorized by type, status (sell, keep, or gift), or any other criteria appropriate for your situation.
If you are selling items that belonged to your deceased parents or other family members, make sure to contact other relatives to ensure that they agree with the decision to sell and do not want any particular item. Always allow family members and close friends the chance to choose the items that are important to them before holding the sale.
Because people generally judge books by their covers, this concept should be applied to estate sales. Be sure that all items are displayed and labeled neatly. Here are a few tricks for preparing items for your sale:
Create sections to sell different groups of items — china in the dining room, kitchenware in the kitchen, clothes on garment racks in the bedroom, etc.;
Use furniture for sale to maximize display space and consider grouping similar small items together for potential buyers to see them all at once;
Put a tag to clearly label all items that are “NOT FOR SALE” or cover those items with a sheet to help people see only what is available to buy;
Dust the inventory, using polish, and make reasonable repairs. You should even clean those items that are not in the sale;
Check the condition of every item to prevent selling any broken ones.
How do you choose a reasonable price? If you doubt your price, look online at Craigslist, eBay, or Facebook Marketplace to see what price similar items are going for at the time. For high-value items, like antique furniture, it’s recommended to hire a professional appraiser. Also, always try to put yourself in the buyer’s shoes and think about what you would pay for each second-hand item.
Extra tip: Visit other estate sales, if you have time before organizing your own, to get an idea of the prices for similar items in your area. Also, remember that, although not everything can be sold for high prices, even lesser-value items put together can make an impact.
Before the day of the sale, be sure that you are prepared for the purchase process. Set up a cash table so buyers will know where to pay for their chosen items. If you have a large-scale sale and you have asked multiple people to help, have them all wear the same bright color so buyers can easily find assistance. Also, be sure to prepare for various payment transactions by knowing how you will handle checks, credit cards, or app (Square, Venmo, PayPal, CashApp, etc.) payments. For large-scale estate sales, it may make sense to buy a mobile credit card reader.
Potential buyers may be able to easily walk off with your items without paying for them (either intentionally or not). So, you may want to add some security precautions, such as having a few people help around the exits. Also, make sure to lock the doors to keep all the items protected before the start of the sale. You don’t want anything to be stolen or damaged.
Now, it’s time to let people know about your event. Advertising is not only about letting people know what, when, and where the sale will happen but also about the value of attending the sale. For instance, it can be helpful to tell about the antique charm, rich history, reasonable prices, or uniqueness of your items. Consider planning the following cost-effective ways to advertise your event:
Create an event page on social media and post an advertisement;
Take photos of the most valuable items and add them to ads for visual appeal;
Put up announcements around the neighborhood;
Utilize word-of-mouth advertising (talk to family, friends, and neighbors);
Consider neighborhood gatherings and online/offline community connections;
Consider a distribution of the estate sale fliers near the neighborhood; and
Make up a catchy and memorable title for your event.
This question is rarely asked by sellers because of typical urgency and time sensitivity. However, if you have some time and can wait, here are a few tips to consider:
Plan for the weather and avoid days that are too hot or too cold, or rainy;
Schedule your sale on a weekend morning;
Consider autumn or winter seasons since you will have more competition with other estate and garage sales during spring and summer;
Have the estate sale before you list the house for sale so you will have an empty home for potential buyers to see.
What is an estate sale in real estate? Real estate investors often consider estate sales a great time to purchase properties. In many cases, these properties are appealing because no major structural work is needed, only minor repairs. Also, they are usually priced below market value. Additionally, the owners are usually motivated to sell fast in order to pay debts and cover taxes and other expenses.
If you are considering buying a house through an estate sale, consider the following steps:
Make sure that the property is viable. After you have found the property of interest, contact the seller or the executor of the estate to ask for the name of the listing agent. You can also ask if a listing price has been determined. Also, ask about the sales process and the primary motivation of a seller.
Check all the associated costs. Examining the property can help you determine what needs to be fixed or upgraded after you buy. This could sometimes include major improvements, so consider whether your purchase decision and potential profit are reasonable.
Stay legally protected. The required 10 percent deposit for a probate sale may not be refundable. However, you can get your deposit back if you overbid at auction or if the court rejects the offer. Make sure to have all the required legal protection, including a legally binding Bill of Sale Agreement that will make the purchase process smooth.
If terms like "estate sale in real estate" or "real estate purchase and sale agreement" seem confusing, worry not. We at Lawrina endeavor to simplify legal complexities for you. If you are considering buying a house through an estate sale, always remember to engage with real estate lawyers near you to protect your interests and stay legally secure.
Understanding what an estate sale entails and knowing how to prepare for one is half the battle. The steps above can assist you in conducting a successful estate sale, even if it is your first time. Remember, the success of your sale largely depends on your dedication to the selling process. Although you may hire a professional estate sale company for help, doing it yourself, armed with the right information and necessary legal documents, can lead to a successful conclusion.
Inna Chumachenko is the Content Lead at Lawrina. She is responsible for managing all the content found on the blog, guides, and other website pages. Inna has a degree in philology and a vast interest in law. In her role at Lawrina, Inna oversees the content team, establishes collaborations with writers, and curates content from various contributors.
When choosing an estate sale company, consider the following factors:
The popularity of items can vary greatly depending on location, time of year, and current trends. However, the following items generally fetch a good price at estate sales:
The tax implications for hosting an estate sale can become complex under U.S. law. Income generated from an estate sale could be considered taxable income.
Given the complexities involved, it's best to consult with a tax advisor or attorney knowledgeable in estate law to understand potential tax implications. Be sure to keep detailed records of the sale, including receipts, appraisals, and expense records, to streamline the taxation process.