At some point, most people will have to face the liquidation of a home’s assets when a loved one passes away. Many baby boomers who want to get rid of a life’s worth of goods to downsize their living space are also looking into liquidation. As a result, estate liquidation has become big business. Below are three popular ways people explore to turn furniture, collectibles, jewelry, and everyday goods into cash.
Consignment
Consignment stores operate under a storefront with limited space, which makes them tend to take on only items of higher value. Examples are antiques, leather items, and precious metals. You sign an agreement with them which normally involves displaying the item for a period of 90 days at a set price, with reductions taken each subsequent week until the item is sold or returned to you. The consignment owner usually takes around a 40% commission and there is often a setup fee to sell with them.
A consignment sale is usually a 2-4 day sale held in a large space such as a gym or church. This type of consignment often will accept lower value items such as kitchenware, baby clothing, and toys. Both consignment options realistically only work for a small percentage of items in the home you’re liquidating. Anything that doesn’t sell is returned to you.
Online Auction and Estate Sales
Online companies now offer ways to sell off items in a home similar to the eBay method. Typically someone from the company will first evaluate the volume of material being sold and weed out items of the most value. Pictures and descriptions list the items on the company’s own website. In the auction method, bidding usually starts at $1 and shoppers compete against each other by bidding. Virtually anything and everything is put up for sale in online auctions. In the online estate sale method, items are priced at a fair market value and sold online. Both type of online sales are locally advertised and depend on shoppers browsing their website.
Auctioned items typically sell well below fair market value, especially on common household items, but they are a good way to liquidate a high volume. Online estate sales that sell at fair market value usually only include the higher end items of the household. Note that there may be lawful restrictions on what can be sold online. The sales usually last about two weeks. Online auction and estate sale companies typically receive 30 to 40% commission of sales. Items that don’t sell are donated or thrown away.
Traditional Estate Sales
An estate sale company turns a home into a professional sales setting for one to four days, depending on volume. Sellers should carefully evaluate the right company for their needs and verify the company’s reputation. Most are “mom and pop” businesses with a high variability in service. Companies also vary on the minimum sales requirement they need to take on a job. They should present a standard written contract that lays out commission, fees, and liabilities.
While the big ticket or exotic items sell the fastest, the $20-or-less items in accumulation tend to account for the majority of the sale numbers. Interesting and high-quality items are usually needed to attract buyers to come to an estate sale. The more of these items that are available, the bigger the crowds.
It’s possible to liquidate between 90-95% of the home’s contents with a good company. Many estate sale companies work with charities and buyout companies to remove whatever is left. Estate sale companies usually receive 30 to 40% commission.