How Much to Pay For Estate Sale Services
Hiring a professional estate sale company isn’t something you do every day, so it can be hard to know how much you should expect to pay for their services. As you research estate sale companies, educate yourself on how they structure their fees and investigate what services to look for. This can help you make a smarter, more informed decision on who to hire and how to maximize your profits from your estate sale. This guide will give you information about the way many estate sales charge their customers as well as questions to ask each company when requesting a bid.
What Are You Paying For?
The most important part of getting a bid from an estate sale company is understanding what services you are paying for. Not all estate sale companies offer the same services or provide those services at the same standard. When you get a proposal from estate sale companies, chances are high that the least expensive proposal isn’t actually the best one. They may be offering a lower price to compensate for inexperience or they may cut corners on services to save themselves money. You’ll want to look closely at the details of each proposal to ensure you are getting the services that you actually need from an experienced, professional company that excels at what they do. Be sure to read reviews online from their previous clients to get an idea about their customer service.
Questions to Consider When Reviewing Proposals
When you get proposals from estate sale companies, you’ll want to consider aspects beyond price when making your selection. Be sure to consider questions you might have, such as:
- How many people visit their website?
- What is the size of their email list?
- Do they have a dedicated, experienced and knowledgeable pricing team?
- Will they remove and donate leftover items after the sale?
- Do they clean the home when the sale is over?
- Do they accept credit cards from buyers?
- Will they have a moving staff on hand during the sale to protect the home?
The answers to these questions will influence the fee, and if a company goes above and beyond in these areas they are going to cost more. Therefore, an experienced company that charges more can ultimately make the seller more money.
How Estate Sale Companies Charge
Most estate sale companies charge you a percentage of the sale’s gross profits; for instance, they might charge you 35%. If the estate sale grosses $10,000, you’ll owe them $3,500. Some companies may have additional services they provide for a fee, such as trash removal, after-sale clean-up, etc. When you are gathering proposals from potential estate sale companies, ask about these additional fees. Be sure you understand how those fees are calculated and ask them what those fees have amounted to for their most recent clients. This will give you an idea about how much you’ll need to pay.
When it comes to determining how much of a percentage the estate sale company makes on your sale, there are generally three different approaches:
1. A set percentage. This is the least common method, but it is still used by some companies. They set the percentage for their services and that’s what they take for every sale that the host, regardless of size.
2. A sliding scale. This method is much more common. The higher the sale grosses, the lower your percentage may be. The table is an example of how an estate sale company might structure their sliding scale:
Sale Gross Total
|$5,000 – $10,000||50%|
|$10,001 – $15,000||45%|
|$15,001 – $20,000||40%|
|$20,001 – $30,000||35%|
3. Evaluating an estate in person. This is the most common method of determining a percentage to charge for an estate sale.
Because an in-person evaluation is the most common method of determining a company’s fees, you’ll want to understand what the company is looking for during the walk through. They’ll be looking at two major factors: the work load and the value. The workload is determined by how many man hours they think they’ll need to put into your sale. If you are liquidating the estate of a hoarder, they will need to put in many more hours and a lot more work sorting, pricing, and staging the home. These sales often require many more days, as well. On the other hand, you may be liquidating a show home that’s already staged and simply needs to be priced, which takes significantly less time. The more work that needs to be done to prepare for the sale, the more you are going to be charged.
Secondly, the company will need to consider the value of the estate. If an estate sale appraiser comes into your estate and sees pieces of original artwork, designer furniture, large power tools, or a terrific collection of jewelry, they are going to want to host your sale because they know it will be very profitable. Because of that, they may actually offer you a lower percentage in order to win your business and outbid other companies. If they walk through and see a lot of worn out furniture, dated clothing, and a collection of tupperware, they are going to charge you a higher percentage; the lower value items mean they’ll be making less money for the same amount of work.
So How Much Should You Pay?
Sales have been hosted for as little as 20% in homes where items were of incredibly high value and required fewer hours to manage. Sales have also been hosted for 100% of the gross sales, meaning every dollar earned from the sale went to the estate sale company. These are usually cases where the family simply needs to get the home cleaned out and items have little value. On average, though, most sales are hosted for between 30-50% of the gross sales.
Why Experience Matters When Choosing an Estate Sale Company
Experienced companies often charge higher fees, but they may end up making you more money. Check out this example:
Company A offers to manage your estate sale for 35% of the total sales. They just started their business a few years ago and don’t have much pricing knowledge. They gross $15,000 in sales on your estate, which leaves you with a check for $9,750.
Company B gives you a proposal for 42% of the total sales, 7% more than what Company A was asking. Company B, however, has been hosting estate sales for 12 years and have reviews from many happy clients. They are also knowledgeable about pricing, and during setup discover a valuable painting in your estate. They work with a broker to sell the piece a month later at an art auction for $6,000. They also gross $18,500 during the estate sale. They may have charged a higher percentage, but you’ll be getting a check for $14,210.
Read More Articles:
Learn more about preparing for an estate sale, finding the right company, or discovering sales in your area.