Learning the truth about commission paid and costs of sales is a must and we are glad you have come to this page. You should read up on as much as possible before you hire our company so that there are no surprises in the end and you can take comfort in the fact that you know what is happening from the beginning to the end. This will always be useful, to know more about each step you take in life.
You pay nothing up front. With a normal in-house estate sale, we pay the expenses for the entire sale out of pocket and are reimbursed from the sale’s gross proceeds. The commission rate you pay is taken from the net of the sale and not the gross so that we will both be sharing the burden and cost of the preparation of your home and property as well as the manning of the sale itself, making it fair for each side of the contract:
- Challenge of project
- Preparation time
- Hours needed to research values
- Marketing and advertising
- Distance from our home office/fuel for each vehicle
- Cost of food for sale and crew
- Supplies to prepare and run the sale
- Workers needed to complete the sale
Other factors may come into play that would alter the pricing structure so it is best to speak with us in person in advance to get a good grasp of what sort of costs or fees we are talking about. On average, expect to pay 50% of the net sales realized in commission. The average estate sale costs 20-30 % of the gross proceeds to run, which is paid out of pocket by us and then reimbursed to our company prior to splitting the proceeds with the family. A list of costs is shown above. It should be noted that clean-outs and dump fees as well as house cleaning will be taken from the family net of the take and will be noted on the sales reconciliation.
The naked truth about commissions and how they work.
How do some liquidators quote such a low commission from your estate sale?
How does $10,000 in sales end up being a mere $1,500 net in money paid to us?
The answer in some cases is simple. They buy items for dirt cheap from your family home while you are not looking and sell it at the next sale or one far down the road. They often put your best items into their stores or sell them on eBay or in shows around the state without paying you a fair price to compensate your family. Some estate liquidators manage to forgo paying labor altogether by allowing their workers; usually family, friends and dealers, to have first dibs from your family treasures in lieu of payment for hours worked at the sale, during prep or even cleanup and hauling.
The first practice is a common one in California. I had a call a year or so ago from one of the most popular estate liquidators in San Francisco (or so said he) and he asked me loads of questions about my rules and regulations and workings of business before I realized he was only up to no good trying to copy or formulate a contract to follow our own. At the end of our conversation he stated loudly “How on earth can you charge these families half of the net and expect to have any business or make any money?” I answered how could I not charge 50 % of net when some sales with loads of cleanup could easily cost me more to run than I would realize in charging his measly 20-30 % of gross sales. I told him I had plenty of business, was the most sought after and busiest liquidator in Northern California and that in the end, we always had made money for the family except in the rarest of cases where the heirs took all decent items from the home and sold them or gave them away after our prep, and pricing and before our sale leaving us with nothing but trash to sell. Also when we do a pro-bono job for a family who has little value in the house but nonetheless needs it cleaned out to sell so they can move on with their life in assisted living. We still help in most cases, with no pay.
When I asked him how he could exist and provide for himself on such a low amount of sales commission he just laughed and said that all the liquidators he knew, including himself, made the bulk of their income on selling their own items at the estate sales and not bothering with the family home’s content at all. They merely sold the very best items the family had and left the rest for them to deal with. They asked huge prices for antiques and collectibles. The real secret was to obtain great ‘buys’ translated in my book as ‘steals’ from people at low low prices from estates he managed or buyouts they beg you to come and haul away, then when he was lucky enough to get signed to a home to give an estate sale in a good neighborhood with constant traffic, he would haul his wares to that location and sell sell sell until he made his fortune and left the place how he found it minus what he cared to purchase for himself (surely for a low low bargain price to sell at the next estate sale he would handle).
Hmmm. I thought about that for a moment and barked out to him “Don’t you think that is a little bit unethical? To give the public the impression that you are selling items from the family who lived there, to ignore your job of emptying the home for the owner who hired you to work there and not mind their business and concentrate on selling their items, to buy things from houses first before the public or lists of buyers and take the very best to sell at a later time being the middle man and making more money than the family would ever know about? Doesn’t that seem a bit dishonest?” The man just laughed between coughing fits from his chain-smoking on the other end of the line and said it was how everyone in the Bay Area did it and most of the liquidators he knew in the Sacramento area as well. It was a common practice and I should jump on board or my business would surely suffer once families realized I was charging too high of a commission to run a sale.
To this I simply replied that I was fine, our business was booming and I thanked him for his call and was sorry I did not recognize his name or know that he was the number one presence of estate sale help on the internet (which I now know is why he phoned me in the first place, to see if he could get me to pay him to make my name and company come up quicker on search lists, like he does all the other liquidators in town and then links to them assuring them he is sending plenty of estate sale business their way, and keeping their coffers full for them to sell at antique shows, street fairs, at their own storefronts and through the internet to make higher profits at the cost of people who hire them to sell off their family heirlooms).
Let me be clear about commissions and how they work. The liquidator who runs an honest sale and pays people, taxes, the state, city and county for all monies due and earned, receives just around 29-35 % of the net of an estate sale. The way this happens is that when you take the entire process and break it up into events and proceeds taken, by the end of the well run estate, there is not as much left as one would think.
Let’s break it down shall we?
The estate sells $10,000 gross in two and a half days of open hours totally anywhere from 20-30 hours.
To give the sale the liquidator must first prepare and clean the premises to show respect for the late relative and their reputation. When this important step is skipped, you risk family friends and neighbors coming into a dirty and disheveled home with torn panties, dirty diapers (that’s right, you start off wearing them and end up wearing them full circle) messy closets, dirty dishes and filthy floors, pet urine, hair, just a whole lot of garbage in some cases and in most homes, this often takes around 2-6 days with four helpers to accomplish.
While these workers are plugging away at making their goal of prepping the family home in time for the sale to be advertised that next Sunday for the following week, we feel it important to feed them one meal a day for 6-8 hours spent working to make your place look it’s best.
Next we have advertising for your estate sale. To do a thorough job of advertising your home’s liquidation, it is important that one not only have a loyal following of collectors and dealers who would travel to the moon to shop their unpicked authentic estate sales (another reason you don’t want to ‘stuff’ a sale with your own merchandise is that you soon get the reputation of being a liar or cheat and buyers stop showing up to shop at your sales no matter how convenient the location or how reasonable the prices) so choose wisely and try to hire a company with a good solid local reputation for giving fair and authentic sales where buyers are all treated equally and good deals can be had by all.
Along with email and website presence you will want to spend the money on fliers to be handed to all neighbors inside a two mile radius (or larger depending on the neighborhood) brought to local shops and bulletin boards and passed around community organizations and churches as well as charities near where you will be selling (remember that giving away the unmarketable items at the end of the sale is just as important as selling amazing artwork at the start because it takes this step to empty the home entirely without filling a landfill). Be sure to have your liquidator call in print ads, run ads online and also do any local advertising that seems to be the most popular for that venue. All neighborhoods are different. Having a liquidator with a solid following (we have over 7,000 families on our email list all of which has signed up themselves and none of which have been bought online) so that you have ample buyers to come and shop from your sale.
Last but not least is proper signage. Be absolutely certain that your liquidator remembers to remove those signs. The signs should be placed a day before the sale and taken down the last eve of the sale. The name of the company and phone number or contact information should be adhered to the sign. Preferably these signs should be biodegradable or recycled signs that can be used over and over so as not to waste paper and use up more of our limited resources. The idea of arrows and bright colors always helps when it comes to signing an estate sale in my humble opinion. All of these services combined normally cost anywhere from $150-300.00 depending on variables like the City you are in, gated areas, costs of local papers etc.
Next is the sale itself. We choose to always cater to our buyers as much as our families who need the house emptied. Without the buyers the sellers would have no ability to make a dime let alone empty a home in a few days. Without regular clients or collectors to shop your sale, you would simply have a house full of fantastic stuff that you will still have a week later and the place will still be filled with unwanted items and you would be no further along than when you called the liquidator, save a picked over home and a few exceptional pieces in the liquidators coffers if they are the type that buy or steal your items before they allow anyone else to shop from them. This is not an option with our company.
We want tons and tons of people in a buying frenzy to come to your home, wait patiently in line, come into the sale and shop shop shop till they drop or at least until they fill their cars and trucks with treasures. To enable these friends to stay and feel at ease we believe in offering them comfort and gratitude for their patronage. We provide shade to protect them from the elements in most cases, folding chairs, tables with snacks and refreshments which act as hold tables after the sale has begun, in some cases live music and entertainment consisting of singing, piano playing, violin and cello. We love to please our public as well as garner attention from the neighbors in a good way, enough to make them feel welcome to come and join the crowd waiting in line for the grand opening.
The average sale itself will take anywhere from 2-10 people to run. This number depends greatly upon the number of rooms involved in the home, the volume of jewelry and small valuables to be sold that would need to be locked inside cases and watched throughout the sale, the need for carryout labor on large furnishings, box-lots, and sheds outdoors, as well as the need for cashiers and checkout help. On an average estate sale that would gross $10,000 we would normally pay for 6 people a total of 175 hours during the sale itself. That would mean we would pay out an average of $1,750 in labor during sale hours.
The commencement of the sale ends with cleanup. This would entail emptying the home itself, emptying the yard, sheds, outbuildings if instructed to broom clean status. This can be quite a job but on average takes two to three men or women and average of 6 hours each coming to a total of 18 hours of pickup at the end of the sale. This total does not include dump runs and hauling hours which would be paid from the family end of the proceeds only. This is an option on our contract that needs to be signed for.
As you can see by now, we have spent a fair amount of time and money manning your sale. By my guesstimate on an average $10,000 gross sale we have spent:
prep hours/food $2,000
sale labor $1,750
food for public $200
cleanup labor after sale $180
Total average cost to run a $10,000 gross sale is $4,350 on top of that add that our company is responsible for paying sales tax on the gross sales made to non-dealers with no resale numbers which on average is around 40% of gross sales in our county being 8.9% of 4,000 (350.00)which comes to a whopping grand total now of nearly $5,000. This means that if we were to sign a contract gifting us merely 20% of the gross sales ($2,000) our company would be in the hole nearly $3,000 at the end of a hard work week trying to help our clients to purge their belongings.
The good news is that on a higher gross sale the cost to give the sale goes up very slowly and many $60,000 gross sales cost less than 10% of the gross to run the sale and this enables both the family and our company to make more money at the end. It would stand to reason then that if the liquidators who charge the least were to provide the same amount of service to these families as our company did, they would either go out of business very soon or look for alternative ways to provide them with a comfortable living to support their family (Buying from the sales prior to the public, bringing in their own items to sell stuffing the sale) and keep all the money, concentrating more on their own items for sale than yours, not finishing a job promised at the end of the sale and in general, offering shoddy work for less money and not coming through with what you and your family had hoped would take place.
We need to remind you that each of us in this business that is licensed, insured, background checked by the FBI, holds permits and pays taxes both to the state and also federal reserves, put out an annual cost of anywhere from $2,000 to $20,000 for additional fees to stay in business besides the above mentioned costs of doing business.
You can now see why it is important to charge for your time and effort in order to keep things rolling and also you can now understand what is entailed in giving a sale, making it work and how much of the proceeds goes where.
On the other hand, if you consider that a sale which profits the family a mere $2,500 out of the gross sales of $10,000 made at the estate liquidation, without which sale the family would have made merely $100.00 tax credit from income tax loopholes, that they would have had to pay for dumpsters, cleaning crews, junk removal and haulers totally on average $5,000 per household, they are now ahead in the end an average of $7,500 for doing absolutely nothing save signing a contract and sitting back to watch the magic of our company at work.
Still, at the end of the sale, our company pays the costs; license and registration fees, sales, state and federal taxes, workers comp insurance, liability insurance, and at the end the net result to us on our end, of a gross sale of $10,000 is merely $1,500 which is far below what the family is promised and paid. You can see that it takes money to make money and the liquidator who is ethical and has decent scruples is hardworking but seldom gets rich. There are the exceptions of estates where it costs far less and earns far more in a shorter amount of time but those sales are by far the exception to the rule. Not all homes are spotless and neat with only valuable antiques.
Our company earns every dollar it is paid. We work hard and do an honest days work for our commission and make no apologies for charging what we charge to accomplish the end result of our efforts. I am writing and posting this information only at the request of many families who asked to be informed in great detail of how we work on a grand-scale rate and contract-wise.
We are known as the most thorough and complete company in town, as well as the busiest and most successful liquidation company in Northern California. Realtors wait in line to hire us, we get dozens of calls a week we cannot accommodate and refer out to other local companies (we have a complete list of over 40 companies that we email or hand out daily to folks we cannot or choose not to assist), we have a waiting list of clients eager to get on our sales calendar and we are never hungry for work in our area of expertise. Families often manage to sell the property for tens of thousands of dollars more after we clean and ready it for sale simply by managing hard work and efforts on our crews part to empty, clean and polish up the family home. We also have the longest lines of shoppers of any local liquidators the day of the sale.
Buyers fly from as far as New York and Portland to attend our unpicked and untouched preferred client pre-sales knowing that they will get the same chance as everyone else to buy rare and un-pilfered merchandise and collectibles, antiques and heirlooms from these family’s who hire us to empty their homes of unwanted contents.
We are proud of our solid reputation as a responsible company who works to better the environment, help local community charities, volunteer to assist in local activities and educational forums from real estate venues to farm and garden meetings throughout Northern California.
We donate time and money to make a difference in our neighborhoods and help people unable to help themselves as well as making sure to donate unsold items to the areas of Sacramento and surrounding counties who are in need of the leftover merchandise the most at any given time.
We are a group of family, friends and co-workers hell-bent on pleasing our client’s every desire, and making the complete process work for all concerned. While there have been a few instances where we did not end up making any net income from the liquidation due to the sheer volume of work needed to accomplish our task, on average our sales gross more money than other liquidator in the area simply due to the number of buyers, the research done on items for sale and the reputation that travels with us wherever we go to service your needs.
This is our promise to you:
We are very concerned about your satisfaction. We will do everything in our power to make this as painless as possible and as good of an experience as can be. We want you to be so happy that in the end you will write us a testimonial to use on our site for future visitors to read and learn from.
For more information or to meet in person, please call us at 916-397-6504. Once more we remind you that our assessment of your property and your family’s estate is absolutely free of charge and will only cost you your time. We look forward to helping you.
Thanks for the read,