The biggest differentials are licensing, credentials, economics, buyer competition, left overs and final reconciliation.
Many of my Realtor Clients asked me to put together a handout for them to share with their Real Estate Seller Clients about the difference between an Estate Sale or Tag Sale where the price of the goods typically goes down and an Auction where the price goes up.
Here are some most important points for the Seller to know.
Licensing: Estate Sale Companies are typically unlicensed, except for a city license, and rarely have any formal credentialed learning. Auctioneers are usually licensed and must complete continuing education requirements in most states. Members of the National Auctioneers Association (NAA) abide by a strict Code of Ethics and may have learning and training designations. Be sure to ask.
Economics: All have a purpose but the Auction method typically is the most economical way to liquidate a household or a business. Seller friendly Auctions generate competition for the assets between buyers bringing the highest fair market value for the items and most of the items are sold. Estate or Tag Sales are Buyer Friendly letting the Buyer negotiate the terms and the price of the goods. Most Estate Sale companies reduce the prices of the merchandise as the sale progresses and time runs out as much as 75% or more. There are usually an abundance of items remaining which need to be dealt with incurring Additional Seller costs for clean out.
Reserves: Sellers worry that at an auction, they will give their stuff away. Items can be protected by a reserve but is rarely necessary with a well managed and marketed Auction. There is a higher chance items will be given away at an estate sale which is Buyer Friendly and subject to the whims of the estate sale representative.
Reconciliation Inventory Receipts: Reconciliations after an Estate Sale rarely allow the Seller to know what items sold for. In most cases there are no receipts provided to the seller. Auction reconciliations provide the Seller with an itemization of the sale tickets which include the sale items and sold amount.
You can learn much more on my Palatium Auctions website page "Should I Have an Estate Tag Sale, Auction or Buyout?"
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