Are you dealing with a death in the family? Perhaps you need to downsize as the kids move out of the house.
Regardless of your circumstance, an estate liquidation can produce fast money. Knowing how to liquidate assets requires planning, organization, and research.
Ask yourself about the purpose of the liquidation. Are you worried about creditors and liquidators seizing your assets?
You should also wonder about the size of your estate and the value of each item. Further, consider the labor and expenses needed to market your items and price them accurately. Above all, find reputable professionals to help you throughout the estate process.
This article will reveal the best estate liquidation tips. Let’s explore.
Conduct an Estate Sale
An estate sale is the fastest way to get the cash you need. It’s also a good option if you don’t have life insurance. However, estate sales can be lengthy and time-consuming.
Without complications, however, you can receive the proceeds in a few days. To learn about estate sales, talk to an agent first. A representative can tell you if listing your estate is a viable alternative.
If it’s the right decision, a professional can help you through the listing phase. Overall, they can help you with the following duties:
- Organizing items for sale
- Setting up the sale
- Attracting interested buyers
In other cases, an agent can provide valuation services. These services will also help you maximize your sales goals.
They also have the resources to hire clean-out crews if necessary. More importantly, hire a professional with experience in estate liquidation.
With or without an agency, go through every item you intend to sell. Go through all areas of your home: the attic, the garage, the shed, the basement, etc. You may have valuables around the home that could fetch a high price.
- Note: Hire an appraiser if you’re unsure about the valuation of an asset. If you have gold jewelry, for example, consider a trustworthy gold exchange market to get a fair valuation.
When it comes to valuation, know the outcome of a sale before you proceed with the transaction. Estate sale agencies will take a certain percentage from the sale.
The transaction may also come with other fees. Therefore, confirm all fees upfront before proceeding with an agent.
Auction the Home
An auction is a great option if you intend to liquidate a house. With that, you can auction other items besides a home. Auctioning is also a suitable choice if you’re pressed for time. Plus, auctions have a higher sell rate than estate sales.
Be aware, however, that you may receive lower market value for your items.
In other cases, a buyer could bid higher than the market value. If you’re concerned about the lower valuation, choose a controlled auction. A controlled auction allows you to establish a base price before you sell the asset.
Regardless of the auction type, an auctioneer will market your asset to the public. An auctioneer has the resources to advertise to many types of buyers.
An auction can attract local buyers, national buyers, and international buyers. The auctioneer may conduct the transaction online. Also, the auction could take place on-site or in a gallery.
You can also ask an auctioneer about the value of your estate and how much you can receive. An auction comes with a fee structure as well, but you can negotiate.
Hiring a Real Estate Attorney
A real estate attorney can help you liquidate an estate seamlessly. Attorneys can be helpful whether you’re conducting an estate sale or choosing an auction event.
They can also ensure that auctioneers or estate agencies give you a fair deal. Additionally, legal counsel can help you get the maximum value out of each item you sell.
- Example: The estate sale process isn’t tightly regulated compared to auctions. There are no licensing or insurance requirements for estate companies. However, an attorney can confirm if an estate sale transaction is ethical.
An attorney is especially necessary if you have complex assets. Since estate laws vary by state, legal professionals can also educate you about laws specific to your state.
They can also help you reach long-term estate goals. For example, they can tell you if a bundle sale is a right choice.
Selling Your Estate in a Bundle
This option is useful if have a large estate and many possessions. A bundled sale allows you to liquidate all assets in a single sale. From there, you can offer all assets to a single buyer.
Choose this solution if you need fast money. With that, not many buyers have the resources to participate in bundle sales.
Buyers who typically engage in bundle sales are group buyers or investors. If you intend to sell a property, the good news is that more investor buyers are looking for estate sales.
The Distinction Between Buyers and Dealers
You can get a better deal by selling to an individual buyer. A dealer is in the business of finding the best bargain possible. As a result, you may not get the best deal.
If you’re selling a home, for example, an investor buyer may offer a price far below market value.
Dealers in the home-buying business usually want to buy low-priced homes and upgrade the properties. After, they can sell or rent the properties at a higher value.
With that, dealers may be a better solution if you’re dealing with a financial emergency. Dealers are more likely to find creative solutions to your liquidation problems.
If you don’t want to sell any of your possessions, you may have options if you have financial investments.
Liquidate Stocks or Bonds
You can liquidate assets on the financial markets as an alternative. Your investments and/or retirement benefits are also assets.
You can sell stocks to raise money when necessary. You can also obtain cash if you have a retirement account (i.e. IRA).
An IRA, for example, has limitations when it comes to withdrawing cash. Under normal circumstances, you’ll pay a 10-percent penalty if you take money out of your retirement savings before 59. However, new legislation allows you to take the money without a penalty if you’re under 59.
If you have asset-based securities (i.e. real estate or commodities), you can sell them for cash. Real estate and other tangible assets offer faster liquidity than conventional stocks.
The DIY Route
If agents, attorneys, and auctioneers are out of the question, you can still conduct an estate sale on your own. When going through the items, assess them objectively. Too often, people assess the value of something based on sentimental value.
In probate cases, many homes sit on the market for too long because they’re priced too high. Hire an appraiser to get a professional assessment. An appraiser’s objective eye can help you price items and properties appropriately.
To commence a successful sale, you’ll also need as many hands as possible. Ask neighbors, friends, and family members for help. Sorting items and marketing them are full-time jobs, especially if you have many items.
If you cannot pay your crew, treat them to something special, such as a pizza party. After assembling your team, you can hire them to engage in the following activities:
- Advertise the Listings: You can hire individuals or a company to market estate items on your behalf. Your team can post signs throughout the community or post ads on online classifieds. This is a good option if you don’t have the time or budget to advertise on your own.
- Take Inventory: An inventory will help you keep track of all items. It also allows you to control the outcome of each sale.
- Take Pictures: If you have a large inventory, consider hiring a photographer to take pictures. The photos should be as clear as possible. Capture different angles of an object, especially for large items.
- Add Security: Security is necessary because you don’t want thieves stealing items when you’re not around. You can avoid theft by having someone monitor the buyers. This measure is especially important for yard sales.
You should also plan for leftover items at the end of the sale. You can contact donation centers to deal with unsold assets, or you can hire a hauling crew to remove them.
You may have a hard time getting rid of certain items, such as pianos. In this case, you can contact nursing homes or retirement centers to see if they’re willing to accept your piano.
Estate Liquidation: How Can I Secure a Smooth Sale?
To foster a smooth estate liquidation, involve professionals and non-professionals. Helping hands can sort all items and help you save time and money. For professional help, contact an estate agent and/or an estate attorney.
Estate professionals will help you through the process and ensure everything remains legal. More importantly, hire an appraiser to get an accurate summation of your assets.
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