Estate Sales vs. Professional Auctions: What You Need to Know
You may be familiar with estate sales. These typically occur when a family needs to liquidate an estate due to the passing of a loved one, a move, divorce or another life-changing moment that warrants all the belongings to be removed from the estate and sold off. Although this is a fairly effective way to get rid of items that are no longer needed, professional auctions do this in a much better, much more secure way. There is a lot of confusion about the difference between estate sales and professional auctions and if you've tuned into our social media pages, we've started a series on some of these differences to help our followers better understand the process. We wanted to shed light on some of the more serious aspects of each, so that you're able to make a more informed decision should you ever need to liquidate an estate.
When it comes to estate sales vs. professional auctions, here's what you need to know...
Professional Auctions are Safer
Let's start off with the most important piece of information. A professional auction is a much safer way to go about clearing out a home and selling its contents for a number of reasons. First of all, professional auction companies are licensed and bound by the state and required to have certain insurances and protections in place to benefit the seller. Professional auction companies hold all the money earned from the sale in an escrow account, which is separate from its business account to prohibit the commingling of funds. Most professional auction companies are comprised of employees who are bonded and insured and handle every aspect of the process, so that at the end, everything is taken care of and the seller doesn't even have to lift a finger.
Unfortunately, there are no regulations whatsoever for estate sale companies, meaning that you take the risk of a company running off with your funds. Often times, your only recourse is small claims court and it's not a guarantee that you'll be able to get this money back. Now if you end up choosing a reputable company, your chances of this happening are decreased...if you're willing to take the risk in the first place.
You'll Sell More with a Professional Auction
On average, professional auction companies sell 99-100% of everything listed for sale and bring in 3-4 times more value for these items, due to the competitive bidding process. This is not the case with estate sales as many of the items that don't sell are simply discarded. The disadvantage of estate sales is that prices usually go down, because of how an estate sale operates. At these types of sales, items are listed at a certain price; however, these prices are vastly negotiated down, not up, which means if items aren't selling, the estate sale company will slash the prices of these items in one last ditch attempt to sell them. When you sell your items at auction, the values of your items always go up.
Other Differences Between Estate Sales and Professional Auctions
It may be a lot to take in, and you may not have even realized just how different these two processes are...and the differences just keep adding up. Other differences include:
Estate sale companies regularly turn to auction companies to help them with what they can't sell.
Auction companies provide detailed descriptions and photo galleries of all items in the sale, so that buyers know exactly what they're bidding on, including quality and features.
With estate sales, buyers typically have to leave the comfort of home to bid, but with professional auctions, the bidding can be done online.
We hope this has helped clear up some of the common differences between the two types of sales. The bottom line is, you may pay slightly more for a professional auction service, but the benefits are greater. Not only will you sell more items, you'll make more money without the heavy risk.