An executor for a Brooklyn brownstone passes me a set of keys. Her recently deceased aunt lived there for fifty years, and the executor—her niece—is now responsible for everything inside. The furniture, the art, the decades of collected personal effects. She is grieving, but she is also a fiduciary. Her duty is to the estate and its beneficiaries, and that means she must make a prudent, documented decision about how to handle the liquidation of all this personal property.
Hiring an estate sale company often seems like the most straightforward path. But as a fiduciary, the executor’s first question shouldn’t be “who can do this?” but rather “what is the most prudent and financially sound way to fulfill my duty?” Understanding how these companies charge is the first step in that analysis.
The Commission Model: What Are You Really Paying For?
Most estate sale companies in New York operate on a commission model. They retain a percentage of the gross proceeds from the sale. I’ve seen this percentage range from 25% to 50%, depending on the company’s reputation, the services included, and the value of the estate.
The fee doesn’t just cover the one or two days of the public sale—a common misconception. A reputable company’s commission typically includes a significant amount of preparatory work:
- Inventory and Staging: Cataloging, organizing, and attractively displaying hundreds or even thousands of items.
- Appraisal and Pricing: Researching fair market value for everything from antique furniture to kitchenware. Some may bring in specialists for high-value items like jewelry or fine art, which might be a separate cost.
- Marketing: Advertising the sale to their network of buyers, collectors, and dealers through email lists, websites, and social media.
- Staffing and Security: Managing the sale itself, including handling transactions and ensuring the security of the home and its contents.
The executor must evaluate if this commission is a reasonable expense for the estate. A 40% commission might seem high, but if the company’s expertise and marketing reach can generate twice the revenue an amateur sale would, the net proceeds to the estate are higher. That is the core of the fiduciary analysis.
Beyond the Percentage: Reading the Fine Print
The commission rate is the headline, but the contract tells the full story. An executor must scrutinize the agreement for other terms that impact the estate’s bottom line. I always advise clients to clarify these points in writing before signing anything.
First, are there any minimums? Some companies require a guaranteed minimum commission. If the sale underperforms, the estate might have to pay the difference. Conversely, some contracts have a minimum guaranteed payout to the estate, which can protect against a poorly run sale. Second, what about unsold items? The contract should specify what happens after the sale ends. Will the company manage the donation or disposal of remaining items? Is there an additional charge for this clean-out service?
Finally, consider incidental costs. Who pays for special advertising, extra security for a high-value collection, or professional moving services for large items? These expenses should be clearly allocated in the contract. Surprises are the enemy of a well-administered estate.
An Executor’s Fiduciary Duty of Prudence
Hiring an estate sale company isn’t just a practical decision; it’s a legal one. Under New York’s Estates, Powers and Trusts Law (EPTL) § 11-1.1, an executor has the power to sell the decedent’s property. But this power comes with the fiduciary duty to act prudently and in the best interest of the estate. This means the executor must conduct due diligence.
Stewardship. That is the role. It requires getting proposals from at least two or three different companies. It means checking their references, confirming they are bonded and insured, and understanding their track record with estates of a similar size and character. The goal isn’t necessarily to find the lowest commission, but the best net result for the beneficiaries.
A well-documented process protects the executor. If a beneficiary later questions the sale’s outcome in Surrogate’s Court, the executor can produce the contracts, the competitive bids, and the rationale for their choice. This demonstrates that they acted not just with good intentions, but with the prudence the law requires.
Liquidating a lifetime of possessions is a sensitive task. The right professionals can be invaluable, but the responsibility for making a sound decision always rests with the fiduciary. This duty must be discharged with care and intention.
If you are serving as an executor and are weighing your options for liquidating personal property, our firm can schedule a fiduciary review to discuss your duties under New York law and the prudence of your proposed course of action.
