An executor for a parent’s estate in Brooklyn has just received Letters Testamentary from the Surrogate’s Court. The legal authority is now in hand, but the practical challenge is standing right in front of him—a three-story brownstone filled with a lifetime of possessions. Beneficiaries are asking when they’ll receive their inheritance, and the carrying costs on the property are adding up. The task is clear: liquidate the tangible personal property. But doing so properly involves more than just putting up a sign. It’s a matter of fiduciary duty.
I’ve seen this scenario play out countless times. As an executor or trustee, you are a steward of the estate’s assets. Your responsibility is to manage and distribute those assets prudently and in the best interest of the beneficiaries. Hiring an estate sale company is often a necessary step, but it’s a decision that requires careful consideration. The commission you agree to is not just a business expense; it is a cost to the estate that you must be able to justify.
What an Estate Sale Commission Actually Pays For
When an estate sale company quotes a commission—typically ranging from 25% to 45% of gross sales—it’s easy to focus on that number alone. The real question is what services are being provided. A reputable company isn’t just opening the doors and letting people in. Their fee should cover the entire process from start to finish.
This process usually includes:
- Inventory and Appraisal: Cataloging and valuing every item, from fine art and jewelry to everyday furniture and kitchenware. This often requires bringing in specialists for items of significant value.
- Preparation and Staging: Cleaning, organizing, and attractively displaying items within the home to maximize their appeal and sale price.
- Pricing: Researching and assigning a fair market price to thousands of individual items. This is a labor-intensive task that blends market knowledge with research.
- Marketing and Advertising: Promoting the sale to the right audience through online listings, social media, email lists, and local advertising to ensure sufficient foot traffic.
- Sale Management: Staffing the sale over several days, managing crowds, handling all financial transactions, and providing security for the home and its contents.
- Post-Sale Logistics: Arranging for the disposal or donation of unsold items and providing a final, detailed accounting of all sales and expenses to the executor.
The commission rate itself is almost always negotiable and depends heavily on the value and nature of the estate’s contents. An estate with a few high-value, easy-to-sell items like recognized artwork or antique furniture may command a lower commission rate. In contrast, an estate filled with more common household goods that require more labor to sort and sell might warrant a higher percentage.
The Contract: Your Most Important Protection
Before engaging any estate liquidator, a formal contract is essential. This document is the estate’s primary protection. As the executor, you have a legal obligation to understand its terms. This duty of care is a core tenet of New York estate law. While a statute like the Prudent Investor Act (EPTL § 11-2.3) technically applies to financial investments, its underlying principle—the duty to act with skill and caution—is a valuable guidepost for all of an executor’s actions, including the liquidation of tangible property.
Your contract with the estate sale company should clearly define the following:
- The Commission Structure: Is it a flat percentage? Does it operate on a sliding scale where the percentage decreases as sales totals increase? Are there any minimum fees?
- Covered Expenses: Does the commission cover all costs, including advertising, staffing, and credit card fees? Or will those be billed separately? Unforeseen costs can quickly diminish the net proceeds to the estate.
- Scope of Services: The contract should detail every service the company will provide, from initial sorting to final clean-out. What happens to items that don’t sell? Be specific.
- Payment Timeline: When will the estate receive the proceeds from the sale? The contract should specify a date by which you will receive the funds and a complete financial accounting.
- Insurance and Liability: The company must carry adequate liability insurance to cover any accidents on the property during the sale and be bonded to protect against theft. Ask for a copy of their insurance certificate.
Treat the hiring of an estate sale professional with the same diligence you would any other significant estate transaction. Interview at least three companies, check their references, and carefully compare their proposals and contracts. A low commission is not a bargain if the service is poor, the marketing is weak, or the final accounting is unclear.
A Note on “Buyouts”
Some companies may offer a “buyout”—a single lump sum for the entire contents of the house. While this can be a fast and simple option, it rarely yields the highest value for the estate. A professionally run sale, even after commission, will almost always generate a better financial outcome. As a fiduciary, you must be able to justify your choice as being in the estate’s best financial interest. Opting for a quick buyout over a public sale could be difficult to defend if beneficiaries raise questions later.
The liquidation of a loved one’s personal property is often an emotional and overwhelming task. By approaching it with a clear understanding of your duties and a deliberate, documented process, you can fulfill your role as executor effectively and honor the legacy you’ve been entrusted to manage.
For executors at the beginning of this process, the first step is not to hire a liquidator but to create a preliminary inventory of the estate’s tangible personal property. If you need guidance on how to structure this initial accounting, we can provide a worksheet to help you begin.
