Estate Sales vs Estate Auctions (Pros and Cons) (2024)

Estate sales or liquidating your loved one’s possessions is often a challenge. For several reasons, you may want to hire a professional for this complex undertaking. But then begs the question: Should you host an estate sale or an estate auction?

When it comes to estate sales vs estate auctions, it’s best to learn about both to determine which would best accomplish your objective. Learn about the pros and cons of each estate liquidation option so you can make an informed decision.

Reasons for Estate Sales & Auctions

Maybe your loved one recently passed away. Now, you must liquidate their personal property, household items, and collectibles, such as costume jewelry, fine art, or a mid-century modern living room suite. Or, you may need to hold an estate liquidation event to comply with their will or trust requirements.

Alternative scenarios may include the homeowner retiring, downsizing to a more maintenance-friendly property, or moving to an assisted living facility. Job relocations, divorce resolution requirements, and bankruptcy issues may also dictate an estate liquidation.

Estate Sale vs Estate Auction: What’s the Difference?

In an estate sale vs auction comparison, the desired outcome is the same: estate liquidation. However, each event uses different methods to accomplish that goal.

Estate Sale

Estate sales, often called “estate sales auctions,” are multi-day sale events that are often held at the loved one’s house. Estate sale companies coordinate each event, and they typically occur shortly before a real estate agent lists the property.

Besides hosting traditional estate sales, some estate sale companies hold several-day online estate sales. The estate sale company displays items’ photos online to draw interested buyers. After the sale ends, buyers pay for their items, and associates handle the shipment details.

Estate Auction

An auction company (or auction service) may host an estate auction at the loved one’s home. Alternatively, the estate auction may take place at the company’s auction house (or auction gallery).

After attendees have inspected the auction items, an auctioneer invites bids for each item or lot of items. Some auction houses supplement their live auction with online auction bids for the same items. Other auction services accept online-only bids for certain items.

How an Estate Sale Works

Every weekend, estate liquidators host estate sales in every state across the country, from northern New York to Southern California.

These events are often called “tag sales” because items have individual price tags.
Estate sales differ from garage sales because, at an estate sale, everything in the home and across the property is for sale. Although you may not agree with every price tag, a reputable estate sale company endeavors to price items near market value.

Pre-Sale Tasks

Before the sale begins, the estate liquidator sorts, prices, and displays estate sale items and memorabilia throughout the house. They may ask appraisers to evaluate higher-end pieces. The liquidator advertises the sale in print and online media, and they send email notifications to their mailing list. The liquidator may also use street signs to attract enthusiastic shoppers.

Sale-Day Tasks

On the day of the sale, the estate liquidator oversees crowd control and ensures that everything runs smoothly. A professional estate sale company provides shoppers with customer assistance and checkout services. If COVID-19 is a concern, the associates will take appropriate precautions.

Post-Sale Tasks

After the sale ends, the estate liquidator removes unsold items from the house. The estate sale company may take items to upcoming estate sales, donate them to charity, or throw them into a dumpster.

Some companies allow customers to purchase large items during the sale and pick them up after the sale. The estate sale contract may also allow for paid-for items to be shipped to purchasers. Finally, a house cleanout is included in some estate sale company service fees, while other companies charge extra for this estate service.

How an Estate Auction Works

Now that we’ve covered estate sales, let’s discuss how estate auctions work. Similar to an estate sale, an estate auction liquidates the contents of a loved one’s home.

In this instance, however, unlike a multi-day estate sale, an auction company establishes the date and time for a one-day auction. The company also determines whether to hold the event at the home or at the company’s auction house. Rather than buying items outright, attendees purchase items (or lots) by placing the highest bids on them.

Pre-Auction Tasks

The auction company’s pre-auction tasks depend on where the auction will take place. If the event will be held at the home, the company evaluates and organizes the auction items there. If the auction will take place at the auction house, the seller pays for the transport of all items to that location.

Preparing for an onsite auction can take several weeks. During this period, auction company personnel sort and catalog the for-sale items. Then, the company allows potential buyers to preview the items.

To maximize buyer interest, the auction company markets the event in local and national venues. Besides listing the auction on the company’s website, the event appears on national auction locator sites as well. The company sends event information to its own mailing list and can add more potential buyers from purchased mailing lists, too.

Auction-Day Tasks

On the auction day, attendees preview auction items before the auctioneer steps to the podium. Potential buyers must first obtain a bidder’s number, which they use to bid on auction items. If they win a bid, the auctioneer calls out their bidder number. Absentee buyers may submit virtual bids for items they’ve previewed online.

Once the auction begins, it typically proceeds at a fast pace for several hours. The auctioneer introduces each item or lot, and attendees bid by holding up their paddle or bidder number. After attendees submit their successful bid(s), they head to the auction office to pay for their purchase(s).

Post-Auction Tasks

After the auction closes, purchasers pay for each item they won. The purchaser also pays a buyer’s premium, or surcharge, on each purchased item. Each premium represents a percentage of the item’s “sold” price.

Each buyer must immediately remove their paid-for items from the premises. Buyers who cannot haul very large items may be allowed to pick them up by arrangement.

Evaluating Estate Sale vs Auction: Pros and Cons

Choosing between hosting an estate sale and an estate auction can be tricky. If you can’t decide between an estate sale or estate auction, view the pros and cons of each estate liquidation method below. It’s easier to make an informed decision when you have all the details at your fingertips.

Estate Sale vs Auction Comparison

Estate SaleEstate Auction
PROSCentral Location: No Need to Move Items ElsewhereNo Need for Strangers to Enter Home (if Held at Auction House)
Extended Duration: More Potential BuyersBuyers Can Preview Items Before Auction Starts
Individually Priced ItemsOnline and Absentee Bidding Means More Buyers
Many Marketing Vehicles Increase Sale ExposureBidding Often Means Higher Selling Prices
Offers May Be Accepted on More Valuable Items
Seller Quickly Receives Sale Proceeds
CONSStrangers Haggling Over Loved One’s PossessionsOne-Day Event May Limit Buyers’ Attendance
Drastic Price Reductions Diminish Sales ProceedsOffsite Auctions Incur Items’ Transport Costs
Potential Liability Issues if Accidents OccurLong Lead Times to Set Up Auction and Get Online Bids
Buyers Must Quickly Remove Purchased Items

Making Your Estate Liquidation Decision

After you’ve reviewed the estate sale and estate auction details, it’s time to select the best option for your needs.

To find an estate liquidator or estate auction company, perform your research, ask for references, and attend one of their events. Make your decision, and prepare to wrap up the estate liquidation in the near future.

Finding Estate Sales & Auctions

Attending nearby estate sales and auctions will help you learn more about the industry and give you an idea of what to expect at your estate liquidation event. Every weekend, you’ll likely find estate sales within easy driving distance (and perhaps within walking distance). In Southern California, this estate sale finder is your go-to guide for finding estate sales near you this weekend.

In other parts of the country, EstateSales.net and EstateSales.org have searchable databases that contain updated estate sale and auction information for many cities and towns. Both databases also allow you to sign up for estate sale and estate auction email notifications.

Finally, get insider tips on finding estate sales in virtually every corner of the country. Once you become an estate sale and auction goer, you’ll know which one you’d prefer to liquidate your loved one’s possessions.

Estate Sales vs Estate Auctions (Pros and Cons) (2024)

FAQs

What are the advantages and disadvantages of an auction? ›

But it's not just the adrenaline rush that makes selling at auctions a good choice for many homeowners.
  • Sell Quickly. ...
  • Chain-Free Selling. ...
  • Increased Competition. ...
  • Seller Remains In Control. ...
  • Easier To Sell Renovation Projects. ...
  • No Guarantee Of Sale. ...
  • Uncertain Sales Price. ...
  • High Fees.

Is it better to sell or auction a house? ›

An auction usually takes place within weeks of listing the property and can be done in one day if necessary. This makes it ideal for those who need to sell their home fast due to financial difficulties or relocation plans. The potential for better pricing outcomes attracts many sellers when considering an auction sale.

Do people haggle at estate sales? ›

It's okay to inquire when discounts start and what percent items will be reduced. But, always be polite and respectful when trying to negotiate a lower price on an estate sale item. And be willing to accept you might not be able to make a deal. There is always more stuff down the road that you can buy!

Are auctions the best way to sell? ›

The advantages of auctions for the seller:

Marketing without a fixed price increases the number of cash-in-hand buyers who will look at your property. Buyers come to an auction with their maximum price in mind as opposed to focussing on how low they can negotiate the price down to.

What are the negatives of auctions? ›

Auction weaknesses are:

You can never be sure of precisely how much you will get. Marketing costs tend to be higher. Auctions concentrate the buying process into a short period of time. This may turn out to not be the ideal time to sell.

What are 2 limitations of selling by auction? ›

There are some potential disadvantages when you decide to sell a property at auction.
  • Auctions Can Have a Stigma. ...
  • The Property Might Not Sell. ...
  • The Highest Bid Might Not Meet Your Expectations.

Why would you sell at auction? ›

Completely transparent sales method

Auctions are also a transparent sales method. The sale happens in real time giving all buyers in attendance the opportunity to present their highest offer during the bidding process and see the other bids.

Does it cost more to sell at auction? ›

Some auctioneers charge the seller between 6 percent and 10 percent of the sales price as a commission. Others charge the buyer an auction premium, usually 10 percent.

Can I sell to highest bidder if reserve not met? ›

Key Takeaways. A reserve price is a minimum price that a seller would be willing to accept from a buyer. In an auction, the seller is not typically required to disclose the reserve price to potential buyers. If the reserve price is not met, the seller is not required to sell the item, even to the highest bidder.

What is the best month to have an estate sale? ›

Winter may just be THE BEST time to hold an estate sale. During spring and summer there hundreds of Garage Sales or Yard Sales to compete with in the winter.

What day is best for estate sale? ›

For the heaviest amount of traffic and the most prospective buyers, host your estate sale on the weekend. Keep in mind that hosting your estate sale over a holiday weekend can be a toss up, though, since many people travel out of town.

What percentage do most estate sale companies take? ›

What Percentage Do Estate Sales Take? Estate sale companies generally charge a standard commission rate between 30 to 40 percent of sales. Before they agree to take on a client, they'll typically provide a gross sales minimum. This means that the total value of all the items to be sold must meet or exceed that value.

What sells most in an auction? ›

Gold coins, jewelry, silver coins, flatware and hollow ware. The value of gold needs no explanation. U.S. dollar coins, half dollars, quarters, and dimes from 1964 and before are made of 90% silver. Along with their silver value, silver coins may have numismatic value, though many elements factor into the price.

What items sell good at auctions? ›

Other items that often fetch a good sale price at auction include classic vehicles, Early Chinese & Other Asian Antiques, historical memorabilia, old advertising displays, and rare coins.

Do auctions take a percentage? ›

Some of the ways they receive payment include: Commission: Auctioneers often charge a commission, representing a percentage of the auction's gross sales. A 10% to 15% commission is typical for this profession. Depending on the deal, they may also receive bonuses.

What is the benefit from auction? ›

Auction produces fair market value through competitive bidding, allowing you, the buyer, to make a smart buying decision with a seller that is committed to sell. Buyers determine the market value. Auctions provide for a timely purchase and eliminate long negotiation periods.

What is the purpose of an auction? ›

The legal definition of an auction is a public sale of property to the highest bidder. The underlying purpose of an auction sale is to obtain the best financial returns for the owner of the property and to allow free and fair competition among bidders.

Why are auctions effective? ›

Auctions are the purest and quickest form of price discovery. At an auction, the marketplace (consumers), tell you how much they believe an asset is worth and how much they are willing to pay through incremental bidding. No more.

What are the advantages and disadvantages of competitive bidding? ›

Pros and Cons of Competitive Bidding

In addition, it can promote healthy competition among vendors and help to encourage innovation and new ideas. There are also a few potential drawbacks to using a competitive bidding process. One is that it can be time-consuming to solicit bids and then compare them side-by-side.

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