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What's the best way to sell?


Dealer:

Pluses:

1) Assuming you can get a dealer to buy all of your items, you are done, the house is empty, no headaches. You know exactly what your items sold for, and have no more worries.

2) If you can get bids from more than one dealer, the competitive open market will assure you that they are fair.

Minuses:

1) Obviously, the dealer has to make a living. They can not pay top price, and have to factor in their overhead, moving expenses, the possibility it might take a long time to sell some of your items, and still make it worth their while to go to the effort to purchase your items.

2) A dealer makes their living by getting your item into their hands so that they can turn around and sell it. This may or may not have anything to do with paying a fair percentage of market value.

Estate Sales:

Pluses:

1) Your smaller value items get sold. You may feel that doesn't matter much, but I have done many sales where I have sold over $10000 worth of items priced at less than $10 each, so it can really add up.

2) There is no labor involved in packing and unpacking your items. It's easy to spend thousands of dollars moving your items from one venue to another.

3) Most sales generate big crowds of people ferociously competing with each other to buy. The crowd generates excitement, and excitement generates buying.

4) The seller controls the pricing, where your other venues generally have no such control. This can, of course, be both good and bad.

Minuses:

1) Your seller controls the price, so if it is priced too cheaply, you are losing money. Surprisingly, pricing too high can also cost you money. All sellers take bids on higher priced items, but bidders don't always offer a fair price, many bidders get cold feet and fail to honor their bids, and an overpriced sale will drive away potential visitors and discourage attendees from bidding. Items that don't sell are then sold to clean out specialists (estate liquidators) who pay only pennies on the dollar, because they have to pack, move, unpack, market, and sell, all while taking the risk of losing money if they pay too much.

So visit a sale before hiring a seller. Is the sale advertised so you could find it. Is the sale well organized, would you want to shop there? Is everything gone 2 hours after the sale opens? Maybe they are selling for too little. Is everything still there one hour before closing? Probably they are asking too much. If you don't have a referral you trust, just check out the seller before you trust them with your estate.

2) Because you are trusting your seller with pricing, marketing, security, and accounting, it is very important to find a seller who really knows what they are doing, and is completely honest and above board. With other venues where the selling is in an open venue, you are relying more on the competitive market and less on the sellers knowledge and integrity. Thus if you choose a less than competent seller, one who is financially unstable, or worse just plain dishonest, you can end up with little or nothing. Many folks with estates that need to be sold shop around for the lowest commission. What is important is your bottom line. What's better, 75% of $5000 or 70% of $15000 (this is not a trick question). However, that being said, just because a seller wants 50% doesn't mean they will do a better job. Do your research.

3) Sadly, not all customers are honest, thus shoplifting and/or burglary can be a problem. Additionally, not all customers are respectful of the property, thus damage to the house or the property you have for sale is always a possibility.

Auctions:

Pluses:

1) The prices are determined in the open competitive marketplace. Often, the competition for desirable items drives the price higher than could be realized at a public sale (aka auction fever).

2) Most auctions are held online as well as live, meaning you have thousands of potential customers, rather than just the many hundreds that would go to a sale. More competition means higher prices.

3) Selling via auction, depending on the auction house, gives the buyer the assurance of third party vetting. Selling a Renoir, for example, at an estate sale or on eBay makes no sense, as no buyer would believe a six or seven figure item being sold in one of those venues to be the real thing. A Renoir sold at Christies and Sotheby's, on the other hand, would have been inspected and authenticated by a specialist who has devoted their career to the subject, assuring the buyer that it is as advertised.

4) Since you are having one company sell everything, your house is empty in a hurry.

So: if auctions can generate higher prices and attract thousands of additional potential buyers, why not sell everything at auction?

Minuses:

1) Auctions are expensive. Because of the labor involved, the expense of moving, printing a catalog, advertising, and so forth, your commissions can be well over 50%. Auctioneers generally have a sliding scale, so the more the item sells for, the smaller their commission. That being said, there is a fee that sound innocuous called the "buyer's premium". It is a fee that is added to the invoice paid by the buyer and it can be quite substantial (almost 30% for some of the big auction houses). Personally, I find the term quite deceptive, as, if you think about it, the money is really coming out of the seller's pocket. As a bidder I would have to have the brain of a turnip to not realize that a, let's say, $1000 bid with a 20% buyers premium means that I am really bidding $1200. So a auctioneer tells the seller that they are charging a 15% commission for a $1000 bid item, but with a 20% buyer's premium they collect $1200, and pay out $850. The reality is you have just been charged 29.2% commission. As I said, I think not revealing that is quite deceptive, but it is the practice of all of the auction houses, so just be aware of the charge.

2) Auctions don't do well with low priced items. Because of the time and labor involved, it simply isn't worth that auctioneers time to sell $5-20 items one at a time. So the auctioneer will throw multiple low priced items in a box and sell it, usually for pennies on the dollar, to a dealer or eBay seller who breaks up the lot and sells the items individually.

3) You might be disappointed at the price your items sell for at an auction. I can't think of a single time I have consigned multiple items when one or more didn't sell for much less than I thought they should. In the long run, you will do fine, as many items sell for too much. But in the short run, especially if it is an item that means something to you, a result can be very disappointing.

4) Unfortunately, there have been too many cases of auctions failing to pay for their goods, and disappearing or going bankrupt. Since the overhead is high, and the cash flow can be huge, this is a business where financial ruin can be staved off by selling client B's goods to pay client A. Fine if your client A, not so good if you are client B. So be sure to deal with an established auction house with a good reputation and solid financials.

Selling it yourself:

Pluses:

1) No commissions to pay, you control the prices, no worries about an estate sale provider taking advantage of you.

Minuses:

1) Do you know how to price? Will your sale bring the same amount of people as an established seller who has hundreds or thousands of followers? Can you handle the emotional turmoil of watching your relatives loved possessions going out the door? Once the pros pick off what you have underpriced, what will you do with the rest? In my experience, private estate sellers are not doing themselves a favor, and would, by and large, make more money hiring someone else to do the sale. But maybe I'm biased.....