Thoughts on Settling an Estate
Settling an estate or thinking of having an estate sale? Here’s some of what we have learned:
We have helped literally thousands of people over the last 25 years taking care of or resolving issues related to settling an estate. Figuring out how to find new homes for things that have come down through families or friends can be a difficult and overwhelming job. It may involve emptying a house full of stuff that has not been maintained because of declining health, or a house simply stuffed to the rafters by prudent well-meaning people who lived during the Depression years and did not want to waste a single thing. The situation is complicated by having to cope with a big project at the same time as you are experiencing a major loss of a loved one or family home, so it’s not just a big logistical job, it’s a big emotional job as well!
I know how this can be. In 1998 my grandparents both passed away over the course of the year. They had been living in the Embury apartments here in Saratoga Springs; after the memorial and funeral was done, my aunts and uncles were over at the apartment sorting out what to do with what, to get the place cleared out. I went over thinking that I would be a big help with all my experience helping families navigate this situation. I knew there was probably not enough to have an estate sale but was confident that I could help steer things in the right direction. I walked in the apartment and froze. I was so overcome with the reality of my grandparents really being gone, it was unexpectedly so upsetting to me, that I was unable to even stay, never mind help sort things out. That was a very sobering experience for me. That day really helped me to understand how difficult it can be for the families that I am called on to help.
One thing that I know is that every situation is different. It may be a house full, perhaps an apartment. Maybe it’s a safe deposit box. Sometimes there are wonderfully valuable and amazing things that nobody had any idea were there. Other times there may be a one or several things whose value has become legendary as they have been passed down and cherished. Each time they are pointed out in the china cabinet or brought out at get-togethers to look at, they become more and more precious and valuable in everyone’s eyes. Sometimes they are truly exceptional and valuable. Unfortunately, sometimes the value today does not reflect the hopeful and well-meaning information that has been passed along.
While many prices have changed over the past 10-15 years because of changing lifestyles and collecting trends, there are always things that have good value that need to be sold and given a new home. Some things sell much better in one way than in another. An estate sale is only one option. Our experience is that a blended approach can give families the best result.
The first step is to talk with someone knowledgeable about the types of things you have and your situation. It may make sense to schedule a meeting to have them look at everything with you and your family. You may be able to get enough information to move your process forward just by a phone call. It may be difficult to proceed with anything until all the legal requirements have been met. You may need to obtain a formal written appraisal first (which can cost thousands of dollars and is sometimes required by the courts or well-meaning lawyers) but make sure if you can that you don’t spend more on a written appraisal than the items are worth – this happens all too often. A conversation with someone knowledgeable can help guide you here.
How do you know if a person or firm is someone that you want to trust to deal with? I am asked this often at our speaking events and I believe that you know within the first minute of talking with someone whether or not you want to do business with them – trust your gut! I am also a fan of good referrals and recommendations from friends or others who have had an experience dealing with the firm you are considering hiring.
Every family and type of house contents is different. Some people love the idea of doing a yard sale themselves and/or find it helpful to spend some time with the items sorting or organizing before things are sold. Other people need to just move on because of personal preference or because the house needs to be emptied as soon as possible. Each situation may need a different approach. Certain types of things might sell best at an in-house professionally run estate sale – this can be particularly true for good quality furniture and the sometimes thousands of $1-$5 items that otherwise might just be donated or discarded. An estate sale can be a good choice if there is enough to sell of the right types of things.
Some higher value items may sell best when consigned for auction or sold directly to specialist dealers. Coins, sterling silver, and gold jewelry items are generally purchased by professionals with a 5% to 20% margin, e.g. a dealer might pay $80 for something they can sell for $100. Estate sale commissions are typically 30%-50%, so if that same item is sold for $100 at the estate sale , it will only bring the family $50-70.
Auctions and auction services are another option. Keep in mind that auction commission rates today range from 10% to 30% depending on the value of the item you are consigning. However, this does not reflect the true cost of selling at auction. Most auction houses today charge a “buyer’s premium”. This is an additional charge (usually 15%-25%) on top of the “hammer price”. For example, if you consign an item to auction with a 20% commission and it sells for $100 (the hammer price), you receive $80. But if the buyer has to pay a 20% “buyers premium”, they actually pay $120. Any buyer at auction figures this into their bidding so the true sale price is $120. On a payment to you of $80, that means you really paid a 33% commission on that consignment! The ins and outs of selling (and buying) at auction are at least several other posts; it is complicated. Don’t get me wrong, auctions can be incredibly successful for the right kind of thing, especially things that are rare and sought after. The psychology involved when two people that want something start bidding against each other can often result in unexpectedly high prices (and very happy consignors!). What is important to know is that it makes sense to sell on a consignment basis sometimes depending on the nature and value of what you are selling. You need to know the specific details in order to make the best choice for your family.
To summarize, make sure you do your homework (as best as you can in a difficult time), find reliable people to help through good referrals or talking to some professionals to get a feel for who does what and how. Beware of a “one size fits all” method, very often a mixed approach will give the best results for the estate. Find an experienced expert who you get a good feeling from and who other people say good things about. I love Antiques Roadshow, it’s great to see the woman who purchased the table at an estate sale for $40 that’s worth $250,000, but I can’t help but think of the poor soul watching the show that sold the table for $40 at their estate sale! Don’t make that mistake.
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