Life After 50: Parting With Possessions – Prudently And Professionally
Liquidating the assets of an estate can be overwhelming. That is why professional guidance is vitally important.
The liquidation of an estate can be a difficult and emotional process. Along with the monetary value of furnishings, antiques, art, China, jewelry and other items, the contents of a home can include sentimental treasures that hold a lifetime or even generations of memories. While sentiment should always be taken into consideration, honored, and handled personally through the agreement of family members or professionally through the direction of a will or trust, it is equally important to prudently handle the disposition of items that are to be sold. Whether one is personally disposing of their own items to downsize and move to a smaller dwelling or liquidating the estate of a loved one that has died, this task must be handled with pragmatic prudence, knowledgeable understanding and professional verification of each item’s intrinsic or current market value. For those who find themselves in the position of liquidating an estate, an understanding of just how to begin the process can be overwhelming. That is why, as with making funeral arrangements, handling legal affairs or buying or selling real property, professional guidance is vitally important.
AN AUCTION HOUSE AT YOUR SERVICE
A well-advertised estate auction conducted by a reputable firm is the best choice for family members, executors, trustees or attorneys to execute a liquidation, connect sellers with buyers and realize the proper profits. An auction house is a bonded business subject to all local and state laws and taxation. They conduct their sales in an open and transparent fashion with accredited appraisals and a detailed accounting that will be accepted by any court and/or the Internal Revenue Service.
According to the National Auctioneers Association, over a quarter-trillion dollars in goods and services are sold at auction every year in the U.S. With live and online bidding platforms, auctions attract attentive buyers from every corner of the globe who enjoy the excitement of aggressively competing to acquire items.
“There are few options for liquidating the contents of a property,” says Don Schireson, CEO of Abell Auction Company, a Los Angeles based, century old auction house.
“A well-advertised auction with a reputable firm is the easiest and most cost-effective way to find a place for personal belongings. By selling at auction, rather than hosting a house sale, items are exposed to a larger and better-informed audience, which leads to higher prices from competitive bidding.”
Many people believe the terms “estate sale” and “estate auction” are interchangeable, however, there are significant differences. There are many stories about bargain hunters who purchase an item at a yard sale for a few dollars, only to discover that it is worth hundreds or thousands of dollars. While this type of mistake can easily happen at an estate sale, it is very unlikely to happen at an estate auction.
AUCTIONS ATTRACT AN INTERNATIONAL AUDIENCE
At public auction, personal property is marketed to a global audience of consumers who participate in a competitive process by placing bids in-person, online or via telephone. Prices are negotiated upward, delivering fair market value or higher to the seller. Most auction houses will set times for exhibition, allowing potential buyers to examine and preview items prior to sale.
Estate auctions and sales are both used to dispose of property owned by someone who is either moving out of a home or deceased. However, estate sales usually take place over a weekend, which limits the event to neighbors and friends rather than educated buyers. At an estate sale, the early bird gets the worm. Since consumers who arrive first get their choice of merchandise, items often sell at lower than market value. In addition, valuable items are often priced too low or misidentified by individuals who lack experience dealing with furnishings, fine art, jewelry, antiques, collectibles and other valuable items.
AUCTIONS ARE OPERATED BY PROS
Reputable auction companies are licensed or bonded and follow a strict code of ethics. Professional auctioneers have years of experience and an extensive educational background in the industry, and they come equipped with a full team of specialists to handle every need. “We provide tailored and complete services to those who choose to sell their personal property through Abell,” Schireson says. “Our staff includes accredited appraisers, jewelry and gem experts, and even translators to assist our international clients.”
Estate sales are often operated by representatives who are eager to accept the first offer, collect a large commission and even augment the sale with their own items. Many are resale dealers who bring a certain level of expertise, but have a conflict of interest in setting prices. For example, a dealer may quietly sell merchandise to friends or associates at reduced prices so they can realize their true value elsewhere.
AUCTIONS ARE PREFERRED BY FIDUCIARIES
Auction transactions are open and transparent, with accredited appraisals and a detailed accounting accepted by all courts and the IRS. Competitive bidding by educated buyers achieves the highest price. For these reasons, they are generally the preferred method of liquidating assets.
While an auction house is an established place of business, estate sale operators are not regulated by any state or local entity. The sales process is closed to the both buyer and seller, and no record keeping is required.
“Unlike estate sales where strangers enter your home, [an auction house] professionally removes all contents and delivers them to [a] secure auction gallery where they are carefully inventoried and catalogued,” says Schireson. “At Abell, we hold our clients and their privacy in the highest regard. We also carry all insurance, so there are no worries about liability issues.”
AUCTIONS ARE WELL-MARKETED
An established auction company knows that exposing valuable assets to a wider audience leads to higher returns. Knowing that, they expend great effort marketing assets through a combination of strategies, including both print and digital media. Consumers, ranging from individuals to private collectors and dealers, have the opportunity to preview items days or weeks in advance.
Conversely, most estate sale companies perform limited advertising, marketing valuable assets only to the area surrounding the home. At the end of the day, leftover items are usually discarded, donated to charity or sold at bulk prices without proper appraisals.
UNDERSTANDING THE PROCESS
Many times, individuals who are liquidating an estate face difficult circumstances and have limited time. It’s important to select an auction house that will professionally handle the entire contents of a home, ranging from everyday household items and personal items to high-end antiques and collections.
Once you’ve selected a reputable auction company, a specialist will meet with you to preview your estate, discuss your desires, and answer questions about the auction process and the property being sold. Estimates of higher-end items will be provided based on the current market and past auction records.
When it comes to the terms of sale, consignors are required to pay the auction house a commission or sellers fee. This percentage should be significantly lower than what is charged by an estate sale company, especially on higher-end items.
“Individuals should select an auction house that is committed to handling your estate professionally, with the highest levels of integrity and transparency, and without charging extra hidden fees,” Schireson advises. “For example, we do not charge extra fees for photography or insurance.”
After a seller’s agreement is signed, the auction company will quickly and professionally remove personal belongings from the home. This can usually be accomplished in one day. After being delivered to the auction gallery, items will be inventoried and catalogued. Soon after the auction, the seller will receive payment and an itemized settlement for estate-related purposes.
Finally, a top auction house recognizes marketing as an important step in the process of connecting the right buyers with the right sellers. “Our auctions are heavily promoted through professionally designed direct mail, targeted print and online advertisements, and postings on affiliate websites,” says Schireson. “Located in Los Angeles, the nation’s second largest market, our sales draw serious collectors from around the world.”
While the process of liquidating an estate can seem overwhelming at first, a well-advertised auction with a professional auction house is the optimal and most cost-effective choice. The right company will handle every detail with sensitivity, privacy and professionalism, while serving the seller’s best interests.