Estate Sales in Albuquerque
If there’s one thing Albuquerque has plenty of, it’s estate sale companies. They are many, they are competitive, and they are all different. What do you need to know before you sign a contract? Here are a few questions and answers you should consider when you meet with an estate sale company. Usually, there are three main parts to an estate sale: Interview and signing the contract, pricing and staging, and the actual event of hosting the sale.
If you expect friends and family to go through the contents to choose their heirlooms and keepsakes, it is ideal to have completed this before your interview with an estate sale company. Companies prefer to see the house with the contents they’re hired to sell, and will usually base their commission on what they see. Once you’ve signed a contract, you can be financially responsible for any items that go missing before the sale. If you have items in the home that you plan to keep, but can’t move before the sale, ask the company about storing them in a specific room, and shutting off that room during the sale.
Pricing and staging can take anywhere from a few days to a couple weeks, depending on the size of the sale and the number of workers setting up. Expect to give the company a key to the premises so they can set up in your absence.
You will likely have a two- or three-day sale, maybe even four for larger estates. The prices set by the company will go down each day of the sale. The first day usually starts and ends with everything selling at 100% of its asking price. The second day, prices are usually reduced by 25%, and might go to 50% in the afternoon. The third day will be 50%, and might drop to 75% off in the afternoon. Their job is to liquidate. You should discuss and clarify the timing of these discounts before you sign a contract. Also let the company know if you have any items you’d like to mark “FIRM” to retain the same asking price every day of the sale.
Here are a few more questions and answers you should know about before signing a contract.
Q. How much is the commission?
A. Commissions vary from company to company. They are typically 30% to 40% of the total sales, going to the company, and 60% to 70% going to you, the client. Some companies charge as much as 50%, and some are negotiable to as low as 20-35%. The commission is not all profit to the company; there are other expenses to consider like advertising, gross receipts tax, and wages to the workers. In some cases you might be able to negotiate a lower commission by foregoing some expenses, or paying for them yourself, such as marketing. You will want your contract to be clear on who pays for what before the commission is divided and paid out.
Q. Why is there a minimum?
A. Not every estate sale company has a minimum. Some are happy with the percentage they ask for and earn. Others might base their commission on the presumption that specific high items will sell, thereby earning more money for less effort, and then feel cheated when those items don’t sell.
Still others might demand a flat dollar amount, or minimum commission from the top of the total sales before your percentage gets divided. A word of caution! If you are negotiating terms with a company who demands a minimum amount from the top of total sales, please take the time to determine whether or not their percentage figures into that amount. For example, if their minimum is $5,000, are they taking 100% of the first $5,000 PLUS 40% of gross sales, including that $5,000? Or are they taking 40% of total sales, and at the end skim a few hundred off the top to make up the difference?
Q. Are there any companies who offer all-inclusive, expenses-paid estate sales for an honest commission?
A. Yes. Seek and ye shall find. Don’t be afraid to end an interview if you’re uncomfortable with the terms of their contract. Albuquerque is inundated with estate sale companies, and they’re very competitive.
Q. How much is gross receipts tax, and who pays it?
A. Gross receipts on estate sales in Albuquerque are taxable at 7.5%. Estate sales companies should pay their share of taxes on their commission and the client pay their taxes on their percentage. Some companies might neglect to mention taxes up front in an effort to seem more appealing or less expensive. Avoid unpleasant surprises by addressing gross receipts tax in your contract.
Q. What about insurance?
A. The premises (your home or property) should maintain liability coverage throughout the setup and duration of the sale.
Q. Can I be present at the sale? Can I help?
A. Most companies discourage the client from attending the sale, and some have strict policies against it. Companies have a few good reasons for this. First, it’s usually an emotional time for family members, and can be even moreso watching their loved one’s belongings walk out the door, or watching their childhood home be emptied. It can be harder than it sounds, and even when they think they are strong and can handle it, some clients later regret being present. Another reason is clients might be prone to attaching stories to the contents of the sale, talking about their mother’s favorite hat or father’s favorite chair. Customers don’t always like to know the personal histories of the items they’re buying and, as good as your intentions might be, they can sometimes hurt the sale. Of course, there are always exceptions. If you really want to be part of the sale, please ask the company about it before you sign your contract so everyone can know what to expect.
Q. I have valuables that are worth a lot. What will they sell for?
A. The main purpose of an estate sale is to liquidate the estate, or get the contents moving out of the house, and time is of the essence. As such, a smart company will price the contents at lower than market value to move it more quickly. For example, if a certain collectible fetches $100 on eBay, it’s wise for the estate sale company to price it between $60 and $80 to sell it in the duration of the sale — there isn’t the luxury of time to answer bidder’s questions, or even hold out for the highest bid.
Q. But I don’t want my antiques and art to sell cheaply when they are worth so much!
A. Ask your company about setting FIRM prices on items of exceptional value so they don’t sell for less than a certain price.