{"id":1117,"date":"2016-12-06T15:28:06","date_gmt":"2016-12-06T22:28:06","guid":{"rendered":"http:\/\/estatesales.org\/university\/?p=1117"},"modified":"2022-08-29T10:47:38","modified_gmt":"2022-08-29T16:47:38","slug":"estate-sale-contracts-guide","status":"publish","type":"post","link":"https:\/\/estatesales.org\/university\/estate-sale-contracts-guide\/","title":{"rendered":"Estate Sale Contracts Guide"},"content":{"rendered":"

Estate sale contracts vary from company to company, but\u00a0no matter how many sales you conduct, your contract\u00a0is your most important document. In fact, your entire business\u2014and reputation\u2014depends on it. And while\u00a0your contract should always evolve, when you\u2019re starting\u00a0an estate sale company<\/a>, you just need to start somewhere.<\/p>\n

Here at EstateSales.org we recommend hiring an attorney to help create your contract, whether that means banging out a document from scratch, or cobbling together bits and pieces from other estate sale contracts. It all depends on how much you want to spend. Either way, never underestimate the value of having a professional on your side.<\/p>\n

We created this guide to help you get started, including types of estate sale contracts, what to cover, best practices, regional differences, and even some sample contracts to look over.\u00a0Please note: The\u00a0information in this blog post and the sample contracts serve as general advice and NOT official legal advice. We recommend consulting an\u00a0attorney for your own contract.<\/em><\/p>\n

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Types of Estate Sale Contracts<\/h2>\n

Estate sales can get complicated because there are myriad ways to get rid of used items, even hard-to-sell items<\/a>. But no matter how you conduct business, your contract should be clear. There are generally four main types of estate sale contracts – and many variations thereof. Our guide mainly deals with\u00a0on-site estate sale contracts.<\/p>\n

On-site.<\/strong> This contract covers your traditional estate sale that usually takes place in the client’s home. Items are sold, and then the remainders are most likely disposed of or donated to charity.<\/p>\n

Consignment.<\/strong> This type of estate sale contract specifies and details how the estate sale company will sell the\u00a0items on consignment, whether in a warehouse, showroom, or other type of setting.<\/p>\n

Clean-out.<\/strong> This is when an estate sale company is\u00a0paid to clean out the entire contents of an estate with the understanding\u00a0that items\u00a0will be sold in\u00a0an onsite estate sale, on consignment, or tossed. Another option is a “straight clean-out” where, for for a flat fee, the estate sale company cleans out the estate and does what they wish with the contents.<\/p>\n

Buy-out.<\/strong> Everything in the estate is bought at one flat rate.<\/p>\n

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Estate Sale Contracts: Pre-sale<\/h2>\n

While the actual estate sale is the star of the show, there\u2019s a lot leading up to the sale. Your contract will need to cover how much you charge, estate sale pricing and appraisals<\/a>, advertising and marketing, setting up, and more. Think of this as a task list, so all parties know who’s responsible for what before\u00a0the sale.<\/p>\n

Commission<\/h3>\n

This is probably the most important part of your estate sale contract. How much you charge can make or break the deal. Since pricing varies based on region, do your due diligence to see\u00a0how other estate sale companies in your area operate. Don\u2019t be afraid to ask questions. The\u00a0Facebook Group, The Estate Sale Company Network<\/a>, is an excellent online resource exclusively for estate sale professionals.<\/p>\n

Insurance: Is Everyone Covered?<\/h3>\n

Professional liquidators should be bonded and insured to cover any possible estate sale dangers and liabilities<\/a>. However, it\u2019s also important that your client have current homeowner\u2019s insurance as well. Accidents happen, especially in strange homes, and in the event a shopper gets injured\u2014or worse\u2014during your sale, you want to make sure all parties are\u00a0covered. This goes for damage to the premises and\/or damage or loss to any items at the estate.<\/p>\n

Inclement Weather Policy<\/h3>\n

This will vary according to region, but you\u2019ll want to go over\u00a0any policies regarding\u00a0inclement weather. If the roads are too icy or a hurricane hits, your sales will suffer.\u00a0Spell out the back-up plan in your contract, especially if you live in an area prone to bad weather.<\/p>\n

Estate Dwelling Policy<\/h3>\n

Some estate sale companies<\/a> don\u2019t allow the client (or the client\u2019s relatives) to live in the estate leading up to and during the sale. Other companies have more lenient policies. Wherever you lie, be clear about it in your contract. Heads up: It can be awkward if\u00a0your client is trying to grab a cup of coffee\u2014while you\u2019re trying to price and tag the mug.<\/p>\n

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Estate Access<\/h3>\n

Before the estate sale, you and your estate sale employees<\/a> will need access to your client\u2019s home or estate. How will this be handled? Some clients prefer you use a certain entrance, some may provide a key or gate\/alarm code. Be clear about the conditions of access, so there are no awkward misunderstandings.<\/p>\n

Inventory Appraisal and Pricing<\/h3>\n

Who is responsible for final appraising and pricing? As an estate sale company you should outline your terms up front to avoid confusion later. Other things to consider:
\n\u2022 Will there be a minimum price for selling individual items?
\n\u2022 What constitutes a \u201clot\u201d and how will they be handled?
\n\u2022 What are your policies concerning possibly illegal items (alcohol, guns, selling taxidermy<\/a>, ivory, etc.)<\/p>\n

\u201cMissing\u201d or Removed Items<\/h3>\n

There are two kinds of estate sale companies: those who have had an item suddenly go up \u201cmissing\u201d after inventory\u2014\u00a0and those who haven\u2019t yet<\/em>.<\/p>\n

The truth is, clients are attached to their items, and relatives have a way of showing up and reclaiming things they suddenly remember they want, like vintage jadeite dishes<\/a> or antique furniture<\/a>. Account for this in your contract and provide a deadline, after which all items must be out of the house or paid for. Since this is a particularly common dispute, you\u2019ll need to\u00a0be specific about what happens if items are missing after your\u00a0deadline.<\/p>\n

Staging the Estate Sale<\/h3>\n

The\u00a0more difficult estate sale clients have to be told more than twice to stay out of their own homes. This goes for setting up your estate sale<\/a>, too. Since this can be an emotional time for your client, it\u2019s usually better if they are hands-off while you\u2019re transforming their former living space into a retail-ready showroom.<\/p>\n

Advertising and Marketing<\/h3>\n

It\u2019s one thing to set up an estate sale. It\u2019s another to actually get shoppers in the door. Who will pay for advertising and marketing your estate sale<\/a>? This expense should be\u00a0accounted for in your contract. Some estate sale companies factor this into overhead costs, while others charge clients a flat rate or piece-meal for various costs, including:<\/p>\n

\u2022 Facebook or other social media ads
\n\u2022 Print newspaper ads
\n\u2022 Subscription costs for EstateSales.org and other estate sale listing sites
\n\u2022 Signage
\n\u2022 Email marketing software fees<\/p>\n

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Estate Sale Contracts: Day Of<\/h2>\n

Make sure your estate sale contract is specific about how the estate sale will operate. This includes designating tasks, whether that means the client will help out or stay away. Be clear ahead of time about extra expenses for staff or security, so no one gets a rude surprise.<\/p>\n

Estate Sale Staff<\/h3>\n

How many estate sale employees<\/a> you have\u00a0may change, depending on the size and frequency of your sales. If you don\u2019t normally operate with full-time help, but need to hire staff for larger sales, it might make sense to pass these charges along to your client. If so, be sure to highlight the conditions in your contract.<\/p>\n

Security<\/h3>\n

Security is an important aspect of your estate sale. Handling security could mean having employees on-hand to watch for shop-lifters or even hired cops, depending on the size of the sale. Include in your contract whether you or your client will be responsible for this expense.<\/span><\/p>\n

Clients and Relatives On Site<\/h3>\n

Another debate between estate sale companies is whether to allow clients and\/or their relatives on site during the estate sale. Whatever you decide, make this clear in your contract. This will come in handy when you’re dealing with difficult clients<\/a>.<\/p>\n

Cash Bank<\/h3>\n

While it\u2019s true most shoppers use credit cards these days, some shoppers will still want to pay with\u00a0cash. You\u2019ll need a minimal cash bank to provide change. Will you or your client provide this? Some estate sale companies include this detail in their estate sale contracts, so there is no confusion later.<\/p>\n

Credit Card Fees and Chargebacks<\/h3>\n

While the rules vary from state to state, some estate sale companies pass on the fees associated with credit card transactions, so it\u2019s not taken out of their profits. In some locales this is illegal. Likewise, some credit card companies allows \u201cchargebacks\u201d or refunds in the event a card-holder is unhappy with a purchase. Unfortunately, the ephemeral nature of estate sales means liquidators are\u00a0chargeback\u00a0targets, as credit card companies are likely to side\u00a0with their clients.<\/p>\n

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Estate Sale Contracts: Post Sale<\/h2>\n

What happens after the estate sale closes is just as important as prep and day-of procedures. Outline\u00a0how post-sale tasks will be handled to ensure a smooth ride, from start to finish.<\/p>\n

Shipping and\/or Delivery<\/h3>\n

Getting items to their designated owners is a task in and of itself. Make sure your estate sale contract addresses:
\nWho takes care of shipping or delivery paid-for items
\nWho wraps and mails items?
\nWho pays shipping and delivery fees?<\/p>\n

Leftover Items or \u201cRemainders\u201d<\/h3>\n

The more you have spelled out in your estate sale contract, the less time wasted later making decisions. You\u2019d be surprised how things can fall apart because people are confused about where the leftover or hard-to sell items<\/a> should go.<\/p>\n

Some estate sale companies handle leftover items on consignment, which can often mean a more complicated contract. Other clients prefer to trash leftover items or donate them to charity. Whatever you decide, your contract is the place to iron out these details.<\/p>\n

Charity Pickup<\/h3>\n

It’s best to decide on a charity during the initial consult, so this detail isn’t overlooked later. If you know a charity that\u2019s easy to work with (ie. on time), volunteer their services.<\/p>\n

Pro-tip: Arrange for your client to meet for pickup. Otherwise outline in your contract what you charge for your time if you have to be the one who waits.<\/p>\n

Proceeds Payouts and Itemized Inventory<\/h3>\n

When and how will sale proceeds be paid out? Another smart detail to include is how the itemized inventory of items sold will be presented to the client post-sale. Here at EstateSales.org we recommend to always document, document, document and there are many tech tools<\/a> to help.<\/p>\n

Keeping a detailed itemized list of all items and sold prices facilitates better record-keeping. Some point-of sale systems automate this to certain degrees and this can expedite the process. Whether you track in a spreadsheet or use specialized software, be clear in your contract what level of documentation your client can expect.<\/p>\n

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Estate Sale Contract Provisions<\/h2>\n

As your estate sale company holds more sales, you\u2019ll figure out more of these clauses to include in your contract. We talked to a few estate sale companies to find out what they include based on past experience.<\/p>\n

Indemnification Clause<\/h3>\n

This is a fancy way of saying: CYA. Not only should your estate sale company be insured and bonded, your client should also be insured with proper homeowner insurance that covers damage, liability and theft.<\/p>\n

No Guarantee of Sale Numbers<\/h3>\n

Remember, you can give a ballpark figure of how much you think an estate sale will bring\u2014but make sure you spell out in your contract that this is just an estimate and not a guarantee.<\/p>\n

Possible Disputes<\/h3>\n

Be sure to account for possible disputes that may come up. Since you dictate the contract, you get to dictate these terms, too.<\/p>\n

\u201cWe specify that if a conflict comes up, both sides agree to settle by professional mediation, which could save a lot of money if you have to go in,\u201d said Lisa Kroese of Estate Fusion<\/a>. \u201cEven if you prevail, you could have a lot of court costs. You could get reimbursed later, but if would be cheaper via professional mediation, rather than both sides hiring lawyers and going through the formal court system.”<\/p>\n

Another tip Kroese recommends: If you cover different service areas, specify conflicts must be settled in your own town, so you\u2019re not inconvenienced\u00a0and forced to travel.<\/p>\n

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\u201cHidden Treasures\u201d<\/h3>\n

Part of your job as an estate sale company is to make the most money possible for your client. It goes without saying, sometimes the hidden treasures you find at an estate can be quite valuable. (This is is what you hope for). In fact, sometimes the estate owner had no idea the treasure was valuable\u2014or even existed!<\/p>\n

Unfortunately, when this happens, a client will often try to keep the item \u201cin the family.\u201d But part of why\u00a0they\u2019re paying you is for your expertise at uncovering\u2014and then appraising\u2014unknown or hidden treasures. However, explaining that to a client with heightened emotions can be tricky. Estate sale contracts should cover this, so everything’s clear from the beginning.<\/p>\n

Credit Card Fees and Chargebacks<\/h3>\n

Credit card fees can put a dent in your profits. Some estate sale companies pass\u00a0this expense to the client instead. If a client then wants to use cash only, explain how many shoppers use debit and credit cards these days, and taking cash only can cut down on sales. Plus, to keep up with other estate sale companies, accepting electronic payment is a no-brainer.<\/p>\n

You might also explain the concept of \u201cchargebacks.\u201d Cathy Talley of Estate Sales of Virginia<\/a> includes a provision about this in her contract that says the client is responsible for paying in the case of a chargeback. Chargebacks are essentially refunds\u2014which means you lose the money.<\/p>\n

\u201cWhen somebody charges an item or service, the credit card offers a provision where that charge can be disputed, and refunded.\u201d said Talley. \u201cScammers sometimes do this to get out of paying, and the credit card company sides with the client.\u201d<\/p>\n

Termination Agreement<\/h3>\n

This clause goes both ways. You may have a few make-it-or-break-it stipulations, or your client may want to back out for whatever reason. Instead of having the whole thing go up in smoke, work a termination agreement into your contract that ensures you\u2019re compensated for the time and expense you already invested. That way, it\u2019s not a total loss.<\/p>\n

Accounting for Regional Differences<\/h2>\n

Not all estate sales operate the same way from city to city, let alone state to state. Things will operate differently in San Francisco<\/a>\u00a0versus Oklahoma City<\/a>, or New Jersey<\/a> versus Michigan<\/a>. There are definite regional differences you\u2019ll want to\u00a0consider in your contract. In other words, don\u2019t think you can just grab any old contract from anywhere and use it for your means. Nuances matter.<\/p>\n

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Inclement Weather<\/h3>\n

If you live in Florida<\/a> during the summer, which can be subject to hurricanes, or upstate New York<\/a> in the winter, you\u2019ll want to\u00a0remember this when writing your estate sale contract. Neither you nor your client wants to risk time or money due to Mother Nature, so make sure you have\u00a0a back-up plan.<\/p>\n

Commission Rates<\/h3>\n

How much you charge is usually a combination of years of experience, services offered, and regional norms. In some areas, a 30% commission rate might be standard while in others, it might be too high or too low. Research estate sales in your area to find a fair price to charge.<\/p>\n

How Proceeds are Handled<\/h3>\n

While dealing in cash only might be a preference, in some areas, it\u2019s a mandate. According to National Estate Sale Association\u00a0board member Martin Codina of Fine Estate Sales<\/a>, it\u2019s customary to pay all proceeds in cash in Long Island on Sundays\u2014and that’s just one example of regional differences. Find out the quirks in your area by talking to other estate sale professionals.<\/p>\n

Local Laws<\/h3>\n

Some rules vary due to state law, so be familiar with local regulations. For example, how state tax is handled, as well as passing along credit card fees to your client, may vary. Selling taxidermy<\/a> has various state laws, as well, if that applies to your estate sale. This is why hiring an attorney is in your best interest, since laws get tricky and are subject to change.<\/p>\n

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Estate Sale Contract Best Practices<\/h2>\n

1. Bring estate sale contracts to the initial consult.<\/strong>
\nIt\u2019s a rookie mistake to go into a consult without your contract in hand\u2014 and a missed opportunity to close the deal. Some estate sale companies take it a step further and send the contract ahead of time for parties to look over. This gives clients a chance to compare contracts.<\/p>\n

\u201cI want them to be prepared and ask every question they could possibly ask – or share the contract with the siblings who aren\u2019t in the same state who are going to have concerns. Then when I show up, they have an idea of some of the things we cover,\u201d said Nancy Greger of House Recycled, LLC<\/a>.<\/p>\n

2. Use your contract as a selling tool.<\/strong>
\nSome companies go all out and may use a graphic designer to trick out their contracts. Whether this means a bit of DIY Photoshop skills, hiring a college student to help, or hiring professional creatives, go beyond\u00a0black and white is a nice touch.<\/p>\n

\u201cOur contract is different. It\u2019s actually a cool little booklet – it\u2019s 81\/2 by 11 folded in half, full color, very visual, easy to read, \u00a0and clear so the client knows exactly what they\u2019re signing. We have a full time creative director who designed it,\u201d said Lee Parsons of Aether Estate Sales<\/a>.<\/p>\n

3. Keep it simple.<\/strong>
\nNo one wants to wade through pages of legalese, least of all a client you\u2019re trying to woo. Keep it clear and simple is the best rule of thumb and makes it easier on your client who most likely won\u2019t have a lawyer.<\/p>\n

4. Go over the contract with your client.<\/strong>
\nEven if your contract is simple, take the time to explain each line item, offering your client\u00a0the opportunity to ask questions.<\/p>\n

\u201cA lot of times they have other things on their minds, their parents\u2019 wakes, for examples, so a lot of times they\u2019re agreeing to things but not really focused on it, so if you sit them down, and go over it, then later on if something comes up, you can say, Remember when we were at your kitchen table and I explained to you\u2026\u201d said Kroese.<\/p>\n

5. Require line-by-line initialing.<\/strong>
\nIt\u2019s true: people don\u2019t often read estate sale contracts before signing.<\/p>\n

\u201cIt\u2019s like when they sign the terms and conditions for the next app and they just sign to get to the app, like, Give me my iTunes! People do that with contracts,\u201d said Codina.<\/p>\n

Combat this human desire to race to the end by requiring\u00a0your client’s initials on each line, instead of just at the end of the document or on each page. This helps them \u00a0slow down and think about what they’re signing (hopefully).<\/p>\n

6. Streamline your contract to customize it on the fly.<\/strong>
\nWhile some parts of your contract might never change, logistical concerns often vary\u00a0from sale to sale. Instead of reinventing the wheel, have a \u201cpermanent contract\u201d and a customizable section. This could be the same document or two.<\/p>\n

\u201cThe customizable part spells out the logistics that the contract doesn\u2019t necessarily go into very much, but they work together,\u201d said Greger. \u201cWe have a Rules and Regulations document, which is subject to change, and we can make changes there. But when it comes to the specifics of the contract, which is the main document, that\u2019s non-negotiable.\u201d<\/p>\n

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Lee Parsons of Aether Estate Sales Co. goes the extra mile to present a visually interesting estate sale contract that also serves as a selling tool. \u00a0He also uses Docusign, so clients can sign remotely.<\/figcaption><\/figure>\n

7. Go digital.<\/strong>
\nMost everything is done electronically these days, and signing contracts is no different. Many clients prefer the convenience of signing from their mobile phones. Parsons recommends signing up for a service like Docusign<\/a> if your estate sale company can afford the expense,<\/p>\n

8. Keep it alive.<\/strong>
\nEstate sale contracts are living documents. Revisit yours from time to time to evaluate how it\u2019s been working for your business so far, and how you might modify it. This could mean involving a professional or not, depending on your budget.<\/p>\n

\u201cI do an annual review with my attorney so that we can review it depending on things that happened. Because of human nature, even if it\u2019s in your contract, things still come up,\u201d said Kroese.<\/p>\n

9. Remember your reputation.<\/strong>
\nBeyond honoring your contract or making money, your reputation goes a long way. Are you kind\u00a0and easy to work with? Do you genuinely have the client\u2019s best interest in mind? Martin Codina points out that he provides a service – thus, his contract is designed to protect his client. Taking into account ethical concerns, and looking out for clients who often are vulnerable, goes a long way in securing a good reputation.<\/p>\n

\u201cMy personal contract is slanted to protect the consumer, it\u2019s always for the consumer,\u201d said Codina. \u201cBecause I serve the consumer. I don\u2019t really think of myself as serving me. I have to protect the consumer against me!\u201d<\/p>\n

10. Testimonials: Get it in writing.<\/strong>
\nPositive testimonials\u00a0help secure more contracts in the future. The best way to build your company is by word-of-mouth. Assuming your estate sale went well and your contract was honored, solicit\u00a0a review in writing from your client. Yelp, Linked In, Google Businesses and Facebook host reviews and can be found on the Web by potential clients.<\/p>\n

Never feel shy about marketing yourself when you\u2019ve done a great job on an estate sale! This is how businesses grow.<\/p>\n

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Sample Estate Sale Contracts*<\/h2>\n

Want to take a look at some actual estate sale contracts? Simply enter your email address below to receive an email with a downloadable link.<\/p>\n

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