One does not need to own an estate to have an estate sale. Estate sale or estate liquidations are usually done when a family member passes away and the surviving family decides through a will of the deceased, to dispose of all or a substantial portion of the deceased member’s properties and belongings in which the proceeds of such sale will be distributed according to the conditions of the will.
In an estate auction, quite different from the regular garage or yard sales, a company or a professional liquidator (with an entire team) is engaged to run and manage the estate sale. For such services and more, the company is paid usually a percentage of the total sales generated. The liquidator or estate sale organizer will handle the listing of items to be included in the sale, tagging and providing accurate description, appraisal and valuation of items, cataloguing and photographing, marketing and promotion and the actual selling of every item listed down. At the end of the estate sale, additional services such as removal of items, clearing out and cleaning of the sale venue, donation of unsold items, etc. may also be included in the package.
And as in any transaction between two parties, an estate sale contract has to be drawn up between the organizer and the owner of the properties to be sold, to legally bind them with their respective responsibilities and accountability. A written contract or agreement will describe the services each party has to perform or deliver during the prescribed period. Most estate liquidators assess the properties intended for the sale to determine if such a sale will serve the interests of the party requesting for the services. A contract is signed and the estate liquidator will begin working on the preparation for the sale. The final stage should be clearing the home empty after the sale.
So how does one write a good estate sale contract? Or what makes a good contract for estate auction? The contract or agreement should contain the following:
1. Term of agreement. This prescribes the effectivity and validity of the agreement – when it will start and when it will end.
2. Services provided. This will specify the services to be provided by the estate liquidator such as removal and safe storage of saleable items, disposal of saleable items within a prescribed period, appraisal and valuation of saleable items including tagging and description, liquidation of items through public auction, complete accounting of items sold and remittance of sales collection within a prescribed period or time, and responsibility of costs incurred during the auction or sale.
3. Fees. This will determine cleanout fee and compensation with corresponding percentage of gross sales.
4. Liability. Estate liquidators should have provision for theft, liability and general property insurance.
Additionally, the party requesting the services of estate liquidator may also include provisions for penalties if estate liquidator fails to clear out a certain percentage of the saleable items as agreed upon, penalties for cancellation of scheduled sale if caused by the estate liquidator or the requesting party, exemptions from tax liability or in accordance with existing state tax laws and full documentation of the estate sale process before and after the sale.