You’ve been appointed executor, the Surrogate’s Court has issued Letters Testamentary, and now you’re standing in a house on Long Island that represents a lifetime of accumulation. The beneficiaries are waiting for their inheritance, and your first major task is to convert decades of personal property—from antique furniture to everyday dishes—into cash. You know you need professional help, but the first estate sale proposal you see quotes a 40% commission. Is that reasonable?
Many fiduciaries face this exact problem. Liquidating tangible personal property is often the most labor-intensive part of administering an estate. As the executor or trustee, your responsibility is to act prudently, and that includes how you manage the estate’s expenses.
The Executor’s Duty and the Estate Sale
An estate sale is a tool for fulfilling your primary fiduciary duty: to marshal the decedent’s assets, pay all legitimate debts and expenses, and distribute what remains to the rightful beneficiaries. Every decision must serve their best interest, which means maximizing the value of the estate.
Hiring an estate sale company is an administrative act. You are delegating the tasks of inventory, appraisal, pricing, marketing, and conducting the sale. The commission you agree to pay is an administrative expense. While the New York Estates, Powers and Trusts Law (EPTL) provides the framework for your duties, it is the Surrogate’s Court that scrutinizes your actions. Should a beneficiary object to your final accounting, you must justify every expense—including the estate sale commission.
The court’s standard is one of prudence. Was the expense reasonable and necessary? A 50% commission to sell a handful of low-value items might be questioned, while a 35% commission for liquidating a complex collection of art could be deemed entirely appropriate.
Deconstructing the Commission Rate
In my practice, I’ve seen estate sale commission rates in New York range from 25% to 50% of the gross proceeds. The variation is significant because the scope of work changes dramatically from one estate to the next. A higher commission rate is not automatically a bad deal, nor is a lower rate always a good one. It depends on the services included.
A full-service company justifying a higher rate might provide:
- Expert Appraisal: Researching and pricing specialized items like jewelry, fine art, or collectibles.
- Staging and Organization: Cleaning, organizing, and professionally displaying all items to attract buyers.
- Marketing: Promoting the sale to a network of collectors, dealers, and the public.
- Staffing: Providing enough experienced staff to manage the sale, control crowds, and prevent theft.
- Post-Sale Logistics: Managing the final clean-out, arranging for donation of unsold items, and providing documentation for tax purposes.
A lower rate might cover only the basics. The key is to understand what you are paying for. An estate with mostly standard household furniture requires a different level of effort than an estate with a documented collection of mid-century modern design pieces. The value proposition must be clear.
The Contract Governs Everything
A verbal agreement is not sufficient when you are acting as a fiduciary. You must have a detailed, written contract with the estate sale company before they begin any work. This document protects the estate, the beneficiaries, and you personally.
As estate counsel, we review this contract for several key provisions:
- The Commission Calculation: Is the percentage based on gross or net sales? Are any items excluded?
- Additional Fees: Are there separate charges for advertising, security, trash removal, or credit card processing?
- Unsold Items: What is the process for disposing of items that do not sell? Is there a cost for this service?
- Insurance and Liability: Does the company carry adequate liability insurance to cover accidents on the property during the sale?
- Payment and Reporting: When will the estate receive the proceeds? The contract should specify a timeframe—typically within weeks of the sale’s conclusion—and be accompanied by a full accounting of items sold.
Under the Surrogate’s Court Procedure Act, your accounting must be accurate and defensible. A clear contract provides the documentation needed to justify this significant estate expense. Per SCPA § 2210, the court has the power to review every credit you claim in your accounting. A solid paper trail is not optional.
Choosing an estate sale company is a business decision made on behalf of the estate. It requires due diligence. We advise clients to interview at least two or three reputable companies and compare their proposals not just on the commission rate, but on their professional reputation, expertise, and the clarity of their contract.
If you are serving as an executor and preparing to liquidate personal property, the prudent next step is to have any proposed agreement reviewed by your counsel. We review these contracts to ensure the terms protect the estate and align with your fiduciary obligations.
