Executors faced with liquidation of personal property in an estate will quickly realize that it is the most time-consuming administrative task. Executors who do not perform their duties could be removed from their position by the probate judge, so it is important that they vigorously pursue the disposition of the property of the estate so that the bills can be paid and the estate settled.
What you will get from this article
Executors have three main settlement options, and I’ll discuss the pros and cons of each in this article. Any company chosen to liquidate an estate must be examined; I will tell you how to do it thoroughly and I will also propose the best settlement method. My guess is that the executor’s two liquidation goals are to achieve the highest cash benefit for the estate and to get the house clean so it can be sold. Of course, there are ways to maximize your cash return for each type of sale, and I’ll tell you what they are.
Spending ten minutes reading this article could save an Executor many hours of work.
Option 1: have an auction on site
Benefits of an on-site auction:
Auctioneers are very competitive lots. It should be an easy job for an executor to find an auction company willing to accept the estate settlement job, and the commissions will be competitive. A strong argument in favor of an on-site real estate auction is that when the auction ends, there will be very little cleanup. If you wish, real estate can also be auctioned, as auctioneers are licensed to auction real estate and other titled properties. In one day, the house, car, boat, RV, and all the household items could be sold.
Negative aspects of an on-site auction:
Auctions are driven by competitive bids. Consequently, you need to have a lot of people at your auction. Large crowds require pleasant weather, plenty of parking, restrooms, food, and snacks to keep people from leaving. Online offers can be included to increase attendance, but it is the local crowd that generates excitement and drives up prices. To attract a crowd, the estate must have collectibles and other quality goods. The common goods that you can buy at your local thrift store are insufficient to attract a good auction crowd.
Suggestions for an on-site auction:
If your estate has many large collectibles, such as antique furniture or a piano, an on-site auction may be your best option. Summer weekends, when the weather is hot and dry, are the best times to hold an on-site property auction. The auction company you hire should be equipped with sound equipment, canopy tents, display tables, and plenty of help to make a quick payment.
Option 2: Submit Auction Gallery
Advantages of auction gallery consignment
If you are concerned about the weather, you may consider submitting your items to an auction gallery. Submissions in an auction gallery are grouped by item type to maximize participation and get the best prices from your collectors. For example, there may be an auction dedicated to art and home decor, or musical instruments or pottery.
Cons for auction gallery submission
There are quite a few reasons not to consign to an auction gallery. For starters, many auction galleries will take only the best items from the estate. Ninety percent of an estate is made up of items that are of little interest to the auctioneer, leaving the executor to take care of the remaining ninety percent of the estate’s ownership. Lastly, when an auction gallery distributes merchandise across multiple auctions, it can take months for all items to be sold, delaying the estate’s closing.
Auction Gallery Submission Tips
Before consigning to an auction gallery, ask the auctioneer how his merchandise will be distributed between auctions; Get a guaranteed settlement date. You will also need a plan for disposing of all the remaining merchandise from the estate.
Option 3: Sale of labels on the site
Advantages of selling labels on the site
Selling labels has several advantages over an on-site auction. For those unfamiliar with tag selling, the sale takes place on the premises and in the house. Companies that specialize in selling labels are less common than auction companies. In a tag sale, everything in the house has a price, just like in a garage sale. Buyers will browse the home and choose the items they want to buy. When buyers arrive at the house, they take a number and are admitted to the house when their number is called. Label sales generally start Friday night and end Sunday night, so there is no need to provide food or restroom facilities. Label sales can be made rain or shine and at any time of the year
Cons for selling tags on the site
The biggest disadvantage of hiring a label sales company is that label sales companies are not subject to the same legal standards as auction companies. Auctioneers and real estate agents are bound by law to the estate through a fiduciary bond. A fiduciary relationship obliges the agent by law to act at all times in the best interest of the estate. Trustees are state licensed, must pass tests, be bonded, must hold all funds in an escrow account until distributed, and must liquidate the account with the estate within a specified period of time.
Trustees must also keep accurate records and follow certain protocols. Failure to follow procedures by a trustee can result in fines or loss of license. Label selling companies are not held to the same legal standards, although they certainly have a moral obligation to the estate. Label sales companies can handle the details of the sale and the distribution of money in any way they see fit.
Another problem with tag sales is that there is usually merchandise left after the sale. Often there is a LOT of merchandise left. When there are too many items left, the executor has a cleaning problem, because the house must be left “clean” before a real estate agent lists the house for sale. Unlike an auction, where prices go up with every bid, label sale buyers want to negotiate a lower price for everything, which is not only time consuming but costs the property money.
Tips for selling labels on the site
When working with a label sales company, read the contract carefully and make sure the settlement agreements are included. the operator must have a solid pricing plan, adequate staff, and a solid track record.
What about internet sales and retail shipping?
Internet sales work well for items that can be shipped easily, such as small collectibles, books, and artwork. Before deciding to sell these items online, remember that having a good variety of collectibles at your auction or tag sale is what will attract buyers to your event. If you sell all the good collectibles online, you won’t get very good sales assistance. Don’t even consider retail shipping; they will take too long to sell their items.
How do I know if I am dealing with a reputable company?
Unfortunately, asking for referrals doesn’t always work; nobody gives a bad reference. The Better Business Bureau lists the ratings of some companies, but not all. With an auction company, most states have an occupational license board that can give you the status of an auctioneer license and tell you if they have any complaints on file. Verifying a label sales company is much more difficult, because there is no agency that keeps track of complaints. One website that is helpful is http://www.ripoffreport.com. When on the site, search for the name of the company you want to research; Also type in the owner’s name to see what appears.
Hire a company with a solid internet presence
These days, it is imperative for a business to have an online network. A business that is well connected in the online world is likely to be a business that is well connected in the local area. It is unlikely that a business with a poor or no website will be able to use the Internet to generate sales for its event. Doing a Google search for the business name or web address is the best way to see how well connected they are. Go to the Google search bar (not the address bar at the top of the page, but the search bar in the middle of the page) and type in the company’s web address starting with www. How many search results are returned that pertain directly to the company you are researching? If the business is a national franchise, ignore the results for the general franchise and only count the results where the local business is mentioned. Having a good ranking in search engines does not necessarily mean that the company is the best for your needs, but it is a good indicator of the professionalism of the company. Typically, companies that have a lot of returned results do so because other organizations want to partner with experts in their field, so they link to the expert website. A large number of related companies is like a “vote” for the company to which they are linked. A company that shows a lot of Google results is usually a company recognized as an expert in its field.
So what is the best way to liquidate an estate?
The best type of sale for property liquidation is to hire a licensed trustee to sell the real estate in one day, to bare walls, at any time of the year. To achieve this, an event that is part label sale and part auction, led by an auctioneer, would be required. Since label vending operators are generally not licensed auctioneers and auctioneers generally hate doing label sales, that’s a difficult solution to implement. However, there are auctioneers who combine these services. Finding such a company will give an executor the flexibility of having a sale at any time of year, the ability to sell down to bare walls with nothing left, and the security of dealing with a state-licensed, trustworthy trustee. servitude.