{"id":3445,"date":"2018-12-03T10:28:50","date_gmt":"2018-12-03T17:28:50","guid":{"rendered":"https:\/\/estatesales.org\/thegoods\/?p=3445"},"modified":"2018-12-08T11:16:43","modified_gmt":"2018-12-08T18:16:43","slug":"how-to-strike-it-rich-at-estate-sales","status":"publish","type":"post","link":"https:\/\/estatesales.org\/thegoods\/how-to-strike-it-rich-at-estate-sales","title":{"rendered":"How to Strike it Rich at Estate Sales"},"content":{"rendered":"

I first heard about Mr. X, the guy who made a million dollars at an estate sale, the way people tend to hear about these things: from a friend of a friend. Mr. X was an art collector and artist in his 40s who specialized in picking and knew everything there was to know about art, Texas art especially. He\u2019d gone to an estate sale a few years back and hit the jackpot. Apparently, it wasn\u2019t the first time.<\/span><\/p>\n

So how does an art guy end up with a million dollar picking hustle? That\u2019s what I set out to learn when I called Mr. X to pick his brain about how to get rich from estate sale-ing.<\/span><\/p>\n

Mr. X (who asked to remain anonymous for obvious reasons) was friendly over the phone, forthcoming with stories, and quick to laugh at my jokes, which put me right at ease. We chatted for about an hour, interrupted only a few times by his toddler step kids \u2014 \u201cmy real full-time job,\u201d he explained, \u201calong with taking care of my wife.\u201d<\/span><\/p>\n

As of late Mr. X has become a family man, so he likes to stick close to home. But whenever the timing\u2019s right and he can find a good estate sale<\/a>, he goes out on the hunt.<\/span><\/p>\n

After all it\u2019s hard to walk away from the kind of thrill where you can saunter into an antique store in Smalltown, Texas, haggle a Japanese cloisonne vase down from $85 to $65, and then turn around and sell it to a well-known auction house for $180,000. <\/span><\/p>\n

And that\u2019s just one of the stories Mr. X told me. Some might say he has the eye. But he\u2019d probably tell you picking is in his blood. \u00a0<\/span><\/p>\n

\u201cAll my life I used to go to garage sales. Westbury Square, the Sharpstown flea market, museums with my dad,\u201d he said, naming places in Houston, Texas. \u201cAt one point I would hit anywhere from seven to eight estate sales a day. Now I’m a lot more selective.\u201d<\/span><\/p>\n

What began as a proclivity for Texas art, mid-century modern furniture<\/a> and decor, and oil & gas memorabilia ubiquitous in East Texas, has been refined over the years to make more efficient use of his time \u2014 for a bigger return on investment. Mr. X has narrowed down his hunts to estate sale finds with international appeal, pieces that can be bought and sold to big-name houses like Christie\u2019s<\/a> and Sotheby\u2019s<\/a>. <\/span><\/p>\n

His specialty as of late? Rare Chinese antiquities.<\/span><\/p>\n

\"Japanese
Japanese cloisonne vase. Photo courtesy of EJ\u2019s Auctions<\/figcaption><\/figure>\n

Track Trends to Make Money at Estate Sales<\/b><\/h2>\n

Mr. X didn\u2019t come by the antiquity trend by accident. In fact, after talking to him a few minutes you get the sense that not much in his life is happenstance. I listened while he discussed the ins and outs of ancient Chinese Dynasties the way some people might rattle off sports stats. Whether it\u2019s rare stamps or ancient clay pottery, he\u2019s got an opinion on it. But his picking habit is more than just a penchant for pretties. He keeps his eye on the prize, figuring out in half the time what might take some people years: how to make money shopping estate sales.<\/span><\/p>\n

\u201cBecause at the end of the day, the market fluctuates, just like gas and oil, or gold and silver,\u201d Mr. X said. \u201cBut for the last five years, Chinese antiquities has probably been the strongest in the world, hands down. African and Mexican are in the tank. Japanese, depending on what it is, is mediocre. I’m looking for pieces that are collected worldwide at auction.\u201d<\/span><\/p>\n

If you frequent estate sales at all, you\u2019ve probably run into some of the regulars, die-hards, often antique dealers, who tail the trends and show up before anyone else does to get the best treasure. They tend to be aggressive, which can seem intimidating to some estate sale shoppers.<\/span><\/p>\n

Mr. X says, \u201cThey watch out for me.\u201d In fact, he once supplied most of the antique dealers in his area and antique shows around Texas, filling up their locations or taking orders, dealing mostly in oil & gas and mid century mod, but procuring anything they wanted. He\u2019s even been known to turn around and sell items in the estate sale\u2019s front yard when he\u2019s beat someone to the punch. It\u2019s his experience and persistence that give him his competitive edge, hands-on learning you won\u2019t get online. <\/span><\/p>\n

\u201cThere’s not one time been a piece that I\u2019ve spotted and went after that I haven’t got,\u201d he said.<\/span><\/p>\n

Estate Sale Indicators to Find Treasure<\/b><\/h2>\n

So how does Mr. X know whether or not an estate sale will be worth his time ? He finds sales the way most people do: on the internet. To narrow his search, he looks for \u201cindicators,\u201d details that give insight into the type of of estate sale, like: estate sale photos<\/a> and descriptions, but also the estate\u2019s neighborhood or the estate sale company\u2019s prior sales. He suggests playing detective on your own to evaluate estate sales since they don\u2019t always include prices on key items. Context clues can offer a wider perspective.<\/span><\/p>\n

\u201cSometimes you can see some of the prices on some of the other things, and it will give you a general idea of how they are pricing,\u201d Mr. X said. <\/span><\/p>\n

He also suggests checking real estate appraisal records for an idea of the house\u2019s layout. This will give you an idea of where to look when you get through the door. Because when you\u2019re competing for a top-dollar item, you have no time to lose.<\/span><\/p>\n

The Internet is where Mr. X found the million dollar estate sale in the first place. By fate or coincidence, it was the only estate sale that day with any Asian indicators, so it immediately caught his eye. After looking into the estate and sale, he devised his strategy: he would buy up all the Chinese art and antiquities he could, and worry about research later. With the low prices he expected to find, based on other indicators, the pay-off was sure to outweigh the risk. <\/span><\/p>\n

\u201cI knew if this piece, or that one, turns out to be just decorative, not a big deal because of how they were priced to begin with. Some of them were $100, some $300, $150, $20, $5, $10. Low prices.\u201d \u00a0(When it came to specifics or photos of the items, Mr. X was a bit more guarded, which was understandable. Professional pickers don\u2019t usually like to give away all their secrets).<\/span><\/p>\n

His plan paid off. When the sale opened, he went straight for the items he\u2019d seen online. When the lot of Chinese antiquities turned up an assortment of porcelain, ceramic, and paintings he knew he\u2019d hit the jackpot.<\/span><\/p>\n

\"Chinese
Chinese clay teapot, Photo courtesy of EJ\u2019s Auctions<\/figcaption><\/figure>\n

Flipping Estate Sale Treasures <\/b><\/h2>\n

However, Mr. X wasn\u2019t in the clear just yet. In order to secure a contract with an auction house, the antiquities would still need to be authenticated. Especially in this market, knock-offs exist. Proper authentication can sometimes take months.<\/span><\/p>\n

When he got home, he began preliminary research, comparing appraisals and pricing online, and it was then that he had a better idea of the treasure he had on his hands \u2014 possibly more valuable than he\u2019d imagined. \u00a0<\/span><\/p>\n

It was through his online research that Mr. X came across the name of original owner of the lot \u2014 the estate owners\u2019 ex-husband, who happened to be alive and well in a nearby town. Doing his due diligence, Mr. X contacted the man and sent him some photos, hoping to get more information he needed for authentication.<\/span><\/p>\n

\u201cI reached out to him for several reasons,\u201d Mr. X said. \u201cTo get provenance on pieces I’d already identified, to get help on the ones I hadn’t identified yet, and also to see if he was interested in any of his personal items.\u201d<\/span><\/p>\n

The two exchanged correspondence, but his attempts were unsuccessful. Then, Mr. X finally settled on an auction house and signed the contract that would send the first items on a world tour throughout China, including Tai Pei and Hong Kong.<\/span><\/p>\n

It seemed everything was primed and ready to go \u2014 all except for one small catch.<\/span><\/p>\n

The original owner wanted his stuff back.<\/span><\/p>\n

An Estate Sale Dream Turned Nightmare <\/b><\/h2>\n

Up until now, things had gone pretty smooth for Mr. X on the treasure-hunting front, with no major hiccups, even when he was bold enough to flip finds in someone\u2019s front yard.<\/span><\/p>\n

But little did he know that when he walked into that estate sale treasure trove, he would also walk into a complicated ex-step-family situation and arduous lawsuit that would question Mr. X\u2019s right to legal ownership. <\/span><\/p>\n

It\u2019s a common scenario, especially with multiple marriages. It\u2019s hardly unusual for an ex-spouse to leave some belongings at their former residence, avoidance or oversight, stuck in a closet or attic where it might gather dust for years\u2014 in this case, many years after the divorce. It\u2019s also not unusual for adult children, who may live out of city or state, to not know which items belong to an ex, or how much they\u2019re worth.<\/span><\/p>\n

Without Mom or Dad to ask about old so-and-so\u2019s weird art, the kids are left to figure it out on their own \u2014 or rely on an estate sale company.<\/span><\/p>\n

The day before auction, the auction house Mr. X was under contract with received a Cease & Desist letter. The property\u2019s original owner claimed the art had been stolen by the estate.<\/span><\/p>\n

Since Mr. X was now under contract with the auction house, he was liable for hundreds of thousands of dollars. <\/span><\/p>\n

\u201cAn auction house doesn’t care who’s right or wrong. They’re a business, and at the end of the day, you’re the name on that contract,\u201d Mr. X said. \u201cSo on the low end, I was over $200k in withdraw fees, plus attorney fees because of their claim.\u201d<\/span><\/p>\n

Luckily for Mr. X, after some lengthy litigation, he won the case. There were too many instances where the estate executors did not dot their i\u2019s or cross their t\u2019s, he said. All told, the value of the property amounted to over a million dollars, with still more auctions pending. Not bad for a couple hours spent at a neighborhood estate sale.<\/span><\/p>\n

\u201cBut if I hadn\u2019t won the lawsuit,\u201d Mr. X notes, \u201cI would have owed the auction house 200 or 500,000 dollars. So that was the position they put me in.\u201d<\/span><\/p>\n

\"Ming
Ming Dynasty vase. Photo courtesy of Jasper52.<\/figcaption><\/figure>\n

How the Estate Sale Went Wrong<\/b><\/h2>\n

While this was a happy ending for Mr. X, one suspects it wasn\u2019t so nice for the estate\u2019s executor, or the the original owner of the Chinese antiquities. What went wrong \u2014\u00a0and how can others avoid this nightmare scenario?<\/span><\/p>\n

Mr. X has a few ideas. The people who held the estate sale cut a lot of corners, he said, choosing not to follow estate sale best practices, like proper and accurate documentation.<\/span><\/p>\n

\u201cThe kids apparently didn’t want to process the estate like they should have, and give an inventory or itemized list to the court like they should have as executor,\u201d he said.<\/span><\/p>\n

Had they followed documentation best practices, they would have had more evidence to support their case. The executors also didn\u2019t choose well when they decided to hire an estate sale company<\/a>. Hiring an estate sale company experienced enough to know how to accurately appraise and price items<\/a>, even unusual or big-ticket finds, is crucial. One way to determine a company\u2019s expertise is from client reviews. But you should also consider how long they\u2019ve been in business, professional accreditations, formal education, and specializations. <\/span><\/p>\n

The truth is sometimes new or fly-by-night estate sale companies don\u2019t have the expertise that comes with years of experience. To compete with more established businesses, newer estate sale businesses may offer a \u201cgood deal,\u201d which might seem to save money up front, but could cost executors millions later \u2014\u00a0as in the case of Mr. X.<\/span><\/p>\n

\u201cEvery estate sale company has the same spiel that leads one to believe that they’re gonna get your family top dollar, and they’re experts on this and that. But at the end of the day, not all of them are,\u201d Mr. X says. <\/span><\/p>\n

Unfortunately, as the number of operating estate sale companies has increased to meet growing demand, so have opportunities for unethical practices.<\/span><\/p>\n

\u201cJust to get in the door, they’re gonna try to undercut companies that are already established by a lower percent,\u201d Mr. X said. \u201cJust to get their phone ringing.\u201d<\/span><\/p>\n

He warns against companies that outprice the competition. \u201cMany people go with an estate sale company that’s only gonna charge 22 or 25%. Well, in this business you get what you pay for.\u201d<\/span><\/p>\n

Finally, another issue that led to Mr. X\u2019s victory concerned the estate sale contract. Estate sale contracts<\/a> should always \u00a0include a clause to account for any valuable items that may pop up or get \u201cfound\u201d during the sale, so they are returned to the estate. In this case, their estate sale contract didn\u2019t include key items.<\/span><\/p>\n

\u201cWhen they signed the contract with the estate sale company, there was no mention of any art whatsoever in the contract,\u201d he said.<\/span><\/p>\n

A simple oversight that turned into a win for Mr. X.<\/span><\/p>\n

\"Xing
Xing Dynasty teapot. Photo courtesy of Jasper52.<\/figcaption><\/figure>\n

Tips to Strike it Rich at Estate Sales<\/b><\/h2>\n

So how does Mr. X make big money from estate sales? He offers a few tips.<\/span><\/p>\n

    \n
  1. Get Ahead of the Trends<\/b><\/li>\n<\/ol>\n

    Know what will sells by staying on top of the market trends. Because markets fluctuate, what\u2019s hot one year might not be the next. Study the trends by following auction houses and sale records. Whether it\u2019s Asian antiquities, rare stamps or coins, or rare art, get to know the niche. For example, valuable Chinese antiquities have reign marks<\/a> that identify their Dynasty.<\/span><\/p>\n

    \u201cLearning Chinese and Japanese antiquities is like getting into stamps or coins,\u201d Mr. X said. \u201cAnd most of these estate sale companies aren’t versed in it yet and not knowledgeable.\u201d<\/span><\/p>\n

      \n
    1. Do Your Research<\/b><\/li>\n<\/ol>\n

      Research the estate sale <\/span><\/i>
      \nWhile the Internet has many valuable       pricing and appraisal resources<\/a>, the best way to study estate sale items is by handling, feeling, and studying them. Often, estate sale photos are distant, blurry or won\u2019t show identifying marks. The indicators may look promising, but it\u2019s in poor condition, a repo, from the 1970s, or Made in China \u2014 yesterday. Sometimes, you can get idea of the pricing. And alway assess the neighborhood as you would any estate sale.<\/span><\/p>\n

      Research the estate<\/span><\/i>
      \nIf you have the estate sale\u2019s address, research the property. Mr. X suggests visiting appraisal websites to get an idea of the estate. This gives you an idea of the house layout so you can go straight to the room when the doors open, especially in competitive sales. You can also research estate ownership. Mr. X does a Google background check to see if the owner was in the war, military, or Oil & Gas, for example, to give him a better idea of the potential for authenticity.<\/span><\/p>\n

      Research the estate sale company<\/span><\/i>
      \nLook into the estate sale company. New estate sale companies might not be as knowledgeable when it comes to Asian antiquities and, as the case of the aforementioned estate sale, they may price items too low. <\/span><\/p>\n

      \u201cThey could have a Qing or Ming Dynasty vase or a Qin shi or what have you, and don’t know it, and they’ll have it priced for 100 dollars, 200 dollars,\u201d said Mr. X.<\/span><\/p>\n

        \n
      1. Invest the Time <\/b><\/li>\n<\/ol>\n

        If you want to make money off estate sales, you should treat it like a job, which means putting in the hours. Think somewhere is too far to drive because it\u2019s four hours away? Consider the 9-5 grind and making the drive might not seem like such a stretch. Mr. X\u2019s tried and true approach is simple: the early bird catches the worm.<\/span><\/p>\n

        \u201cIf I see it, I go. I study estate sales in California, San Antonio, Austin, Louisiana, Mississippi, Dallas, and if I see it, I\u2019m either on the road or on the plane to get to it\u201d he said.<\/span><\/p>\n

        When he\u2019s in the field, if the sale starts at 8 or 9 in the morning and it seems promising, he\u2019ll even post up the night before, or get there super early to be first or with the first group through the door. This strategy is non-negotiable.<\/span><\/p>\n

          \n
        1. Document, Document, Document<\/b><\/li>\n<\/ol>\n

          One way to make sure you\u2019re covered is to always record everything, from start to finish, for legal purposes<\/a>. The more information you can provide, the easier it is to prove ownership or provenance in the event of litigation. This is especially true if you shop at estate sales to make a profit. <\/span><\/p>\n

          \u201cI would advise anyone doing it to make money to take photographs of the estate sale. Make sure you have the address written on the receipt, and you have all your documentation. So if some piece does turn out to be very valuable, you’re covered,\u201d Mr. X said.<\/span><\/p>\n

          Estate Sale Documentation checklist:<\/b><\/p>\n