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How to Liquidate an Estate Simplified
Deciding how to liquidate your personal or family member's estate can quickly become an overwhelming experience. With so many decisions to make and so many people often advising you, the choices can become limitless and quite confusing.
What should I keep? What should I give away? What should I sell and to whom should I sell it? What is a tag sale? What is antique? What is valuable? Who can I trust to help me? Your questions and concerns can seem endless.
The best place to start is by breaking the overwhelming task into smaller more manageable pieces. As with any decision making process, take your time and consider your options in a well thought out manner.
Below is a list of steps and recommendations to help you with the process.
STEP 1: EVALUATING THE CONTENTS:
Your first step in liquidating an estate should be evaluating the contents. It is important to prepare yourself for questions a buyer and/or professional estate liquidator may ask you. Spend some time exploring, assessing and evaluating the estate contents. Try not to focus on how much there is to do or how in the world you are going to take care of it all, just get a basic feel for what you have.
Be able to answer some simple questions, to the best of your ability.
How old is the estate?
Do most of the belongings look newer, bought between the 1990s and early 2000s? Are things really old, so old that you couldn't begin to guess when they were from? Are you looking at a mid-century estate with items that look like they belong in a 1950s I Love Lucy show or a retro estate, that looks more like a 1970s Brady Bunch episode? Do you have a combination of eras represented in the home?
How big or small is the estate?
When you sell a house, the number of rooms, including attic, basement, garage and storage space are important to the buyer. When you are planning to liquidate an estate, it is important to know how many furnished and storage rooms will need to be emptied.
Be able to tell a professional,
I am looking ot liquidate an estate that consists of about eight furnished rooms, a large attic and a small basement.
Does the property contain any special collections?
Many people have a collection or two of some sort. A collection can be of the more common variety like coins, antiques, jewelry, stamps, teacups or baseball cards or a bit more unusual like fishing tackle, 1950s kitchenware, vintage handkerchiefs or handbags. It can consist of a modest number of paintings, pocket watches or vintage radios or of an extensive collection of baseball cards, Christmas ornaments or silver spoons.
Be able to tell a professional what types of collections may be included in the estate.
What should you throw away while you are evaluating the contents?
Most experts will tell you to throw nothing away, until a professional advises you otherwise. We've all watched the television programs showing the appraisal of an item of excessive value that was picked out of the trash. Don't be that person who tossed out a treasure.
If you feel you must throw something away, limit yourself to the tossing away of open food stuffs you find in the refrigerator, breadbox or .cupboards. That's all. Nothing more.
STEP 2: ORGANIZING IMPORTANT DOCUMENTS, PHOTOGRAPHS AND MEMENTOS:
While you are exploring the house, you may come across important documents, photographs, letters and family mementos. Place the items aside, ideally in containers appropriately marked. You don't have to divide and conquer every letter and photograph at this time, just organize things into more manageable groups. These are things that will not be sold and should be set aside in an area designated for personal items.
Box similar things together and most importantly, label the boxes with the items contained within, like "photographs" or "bank statements."
STEP 3: CONTACTING PROFESSIONALS:
You hire a doctor to cure your ills and a mechanic to fix your car; hiring a professional to liquidate your estate should get the job done in the most efficient manner possible.
Talk with friends, colleagues, and perhaps a real estate agent; ask them for names of reputable estate liquidation companies, auctioneers or tag sale consultants. Check your local yellow pages for names.
Professional estate liquidators fall under several different categories in the yellow pages section of you phone book, including
- Antique Dealers
- Estate Liquidators
- Estate Sales
A professional estate liquidator will evaluate, organize, research, advertise and provide the necessary staff; they will directly purchase or sell the contents of the estate and provide you with payment for the items sold.
Which should you choose? The one that best suits your needs.
An auctioneer is a professional, licensed by your state to sell items to the highest bidder at auction. The auctioneer should be knowledgeable about antiques, general household goods and special collections. He may transport the estate contents to an auction house or conduct the auction on-site, which means on your property.
An antique dealer is an individual who specializes in selling antiques, although many expand into the vintage and collectible market. Some antique dealers conduct estate sales.
An estate or tag sale consultant is an individual who conducts on-premise, one, two or three day sales, where each item is individually priced at a fixed amount and sold to customers who attend the sale.
There are pros and cons to utilizing the services of each of the aforementioned professionals. Atauction, you do not control the price. Bidding may bring the price of an item much higher or lower than you would prefer. At atag sale, however, you may affix a fair price on a valuable item that simply may not sell. If you sell to anantique dealer, she may wish to buy only certain items, leaving you with most of the household contents to deal with.
Be aware that the professionals you contact will advise you of the benefits of selecting their service while quoting the disadvantages of a different method of estate liquidation. Plan to listen to the list of pros and cons, and consider how they may impact your unique situation.
Now it is time to select three or four companies and schedule appointments with their representative. If time permits, schedule these appointments on different days. Expect the appointment to last an hour or two.
STEP 4: INTERVIEWING THE PROFESSIONALS:
Prepare a list of questions or concerns you many wish to have addressed and be certain to have paper and pens available for note taking. By jotting down information and observations during the interviews, you will be better able to keep you opinions and evaluations straight.
When a candidate arrives, you should first give him a tour of the estate. Encourage the representative to open cupboards, drawers and closets. Don't feel embarrassed if a room is messy or dirty. Estate liquidators recognize that houses sit for months sometimes years before they are contacted; dirt, dust and grime are an expected and normal part of the job.
Ask each professional what services they will provide for you. State you expectations.
Ideally the companies you contact will take care of all your estate liquidation needs from set up through trash removal. If this is your objective, be sure to state your expectations up front. If you expect the property to be broom swept and empty, let it be known.
You should ask the estate liquidator if she is certified or licensed. Ask about past experience. How many years has she been working in this line of business? Ask for references.
You can ask about insurance, but realize that an insured, professional means that the professional is insured against claims. An insured professional does not protect you against injuries sustained on the estate property during a sale. Only an owner of a property can get insurance for the real estate property. Signage advising customers to watch their step, watch their head and where the emergency exits should be standard.
Most estate liquidators work on a commission basis; ask what the best commission rate you can negotiate is. Most run between 25% and 35%, depending on the work involved and the value of the contents.
Ask about advertising. Where will the items or sale be advertised and who is responsible for the costs. If you are responsible for the advertising fees, ask for an estimate.
Do not commit to selling anything to the first person who walks through the door. Be wary of an individual who wants to cherry pick through the estate, selecting only the most interesting and often valuable items. Stand your ground and complete your interviews first.
STEP 5: SELECTING A PROFESSIONAL:
Subsequent to the interview process, review your notes. Which candidate best meets your needs and objectives. Your gut may already be telling you, but reviewing your notes will help confirm your decision.
Write a list of pros and cons related to each candidate and their estate liquidation method. Carefully review these lists and make your decision. You man decide to utilize the services of two or more individuals. Only you will what is best for you, as every situation is different.
When you have made your decision, follow through with a phone call. Be sure to tell the candidate you chose that you appreciate their help and are always available for questions or concerns. This simple courtesy will help facilitate a good business relationship.
In future blogs, we will discuss in further detail the various estate liquidation processes from the tag sale to auction, with the goal of making the businesses a little less intimidating to the novice.
Thanks for reading!