Estate sale fees and commissions

How the commission works

The standard arrangement is a percentage of the sale's gross takings. The company prices the contents, stages the house, advertises the sale, staffs it over two or three days, handles the money and hands over the balance. Rates vary widely by company, by region and by what is in the house, and no authority publishes them — so anybody quoting a national average is quoting a survey, not a rule. What is worth knowing is that the rate is negotiable and that it moves with the expected gross: a house of genuine collectible material attracts a lower rate than a house of ordinary furniture, because the same days of work return more.

Ask what the percentage is calculated on before you ask what it is. Gross takings and net takings are different bases and the same number means different things against each. So does a sliding rate that falls once the sale passes a figure, which is common and usually favors the family.

Two structures beside the percentage are worth asking about directly. A minimum fee, which protects the company where the sale takes very little and is the reason a small house is often declined. And an outright purchase of the contents for a fixed sum, which some companies offer: it removes all the uncertainty and, on anything with real value in it, usually removes a good deal of the upside too.

What comes off before you are paid

This is the part that separates two proposals with the same headline rate, and it is the part families are least likely to ask about. Any of the following may be charged in addition to the commission, and each is legitimate — the question is whether it was disclosed before you signed.

Advertising and photography, where the company buys listings rather than using its own mailing list. Extra staff or security for a busy sale, or for a house with small, valuable items. Card processing, where the company takes cards — a percentage of a percentage, small but real. Rubbish removal and clean-out after the sale, which is the largest of these and the one most worth pinning down. Moving or transporting large items. Specialist appraisal where something needs one. And the cost of getting anything unsold to a charity.

Ask one question in writing: what will be deducted from the proceeds other than the commission? A company that answers with a short, specific list is a company that will not surprise you. A company that says it depends is telling you the truth, and you should ask for the range.

Then ask when you will be paid and how the accounting is presented. A settlement statement itemizing the takings and every deduction, within a stated number of days of the sale closing, is normal and worth having in the contract. If you are the executor you will need that document for the estate's accounting regardless.

Whether the sale itself is taxable

Most states exempt what they call an occasional or isolated sale — the ordinary case of a household selling its own things rather than a shop selling stock. An estate sale usually looks like that, and often is. But the exemptions are drafted narrowly, and two of them are drafted in ways that can catch a professionally run sale.

In Texas, hiring the estate sale company can be the thing that makes the sale taxable. The household-goods exemption requires all four of: the goods were bought for the family's own use, the seller holds no permit, calendar-year receipts stay under three thousand dollars, and the seller does not employ an auctioneer, broker or factor — other than an online auction — to sell the property. An estate sale company is precisely that. So the decision to hire professionals is not only a decision about commission.^{Source: Tex. Tax Code § 151.304 (Occasional sales) (opens in a new tab)•}

California asks a question instead of setting a number. The sale is exempt so long as it is not one of a series of sales sufficient in number, scope and character to amount to an activity that would require a seller's permit — and none of those three words is defined. Clearing one parent's house is plainly not that. A family clearing four properties over a year, advertising, and repricing what did not sell for a second weekend is a question of fact rather than of arithmetic.^{Source: Cal. Rev. & Tax. Code § 6006.5 (Occasional sale) (opens in a new tab)•}

A sale being exempt does not make the clearance exempt. California carves vehicles, vessels, aircraft and mobile homes out of the occasional-sale exemption by name — which between them is most of what is valuable in an ordinary estate outside the house. Treat the registered items as a separate exercise from the day itself.^{Source: Cal. Rev. & Tax. Code § 6367 (Occasional sales) (opens in a new tab)•}

Two questions remain open here and it is worth being direct about them. Sahvelo has not read the equivalent rule in most states — Florida's, for instance, sits in an administrative rule whose publisher serves the rule's history and effective date but not its text. And who must collect the tax where it is due, as against who owes it, is a separate question this page does not yet answer. If the sale is large, or you are hiring a company, ask them in writing how they treat sales tax and who remits it; a company that runs sales in your state for a living will have an answer, and getting it in writing costs nothing.

What happens to what does not sell

Between a quarter and most of a house may not sell, depending entirely on what is in it, and the contract should say what becomes of it. The three ordinary answers are that the company clears it as part of the fee, that it clears it for an additional charge, or that it leaves it where it is and the family arranges clearance. The third is the one that catches people out, because the sale ends on a Sunday and the house still has to be empty by a date.

A fourth answer exists and needs watching: that unsold items become the company's property. That can be a perfectly fair trade for a clearance included in the fee — but it should be a trade you agreed to, and it should not cover anything the family has not first had the chance to take out.

Where unsold contents go to charity, ask who receives the acknowledgment. If it is written to the company rather than to the estate, the estate cannot claim the donation — and above two hundred and fifty dollars there is no deduction at all without one made out correctly.^{Source 5}

The contract terms that matter

Nine things, and none of them is unusual to ask for. The commission rate and what it is calculated on. Every other charge, itemized. What happens to unsold items, and who owns them. Whether the company may discount, and from what point in the sale — most reduce prices on the final day, and you should know by how much. Whether any item is excluded from the sale, which is how you protect the things a family member is still deciding about.

Then: reserves, meaning the minimum you will accept on named items, which is the only protection against a valuable piece going for very little in the first hour. Who is insured, for what, and what happens if something is damaged or taken during the sale. When and how you are paid, and what the settlement statement will show. And how either side may cancel, and what it costs — a family that changes its mind after the company has priced the house should expect to pay for the work done, and should know that figure in advance.

Exclusive-right clauses are normal and are worth reading. Some contracts give the company the right to a commission on anything sold from the house during the term, including a private sale the family arranges itself. That may be reasonable. It should not be a surprise.

What the sale price is not

One thing about an estate sale is federal rather than negotiable, and it matters to the estate's paperwork. What a sale clears is not the value of the contents for the estate's purposes. Fair market value is expressly not a forced-sale price, and it is expressly not the price in a market other than the one the item is most commonly sold in to the public — so the number the estate records and the number the sale takes are two different numbers, and the second is usually lower.^{Source 1}

This is not a reason to avoid a sale. It is a reason to have the valuation done before the sale rather than reconstructed from the till afterwards, and it is one of the reasons the inventory comes first.^{Source 2Source 4}

Where the valuable articles come to more than three thousand dollars in aggregate, an expert appraisal under oath is what the estate tax regulations ask for — and an estate sale company's pricing is not that. A company that says its pricing serves as the appraisal is describing something else.^{Source 3}

Comparing two proposals, and when a higher rate wins

Put both proposals against the same four questions and the comparison usually answers itself. What is the rate and what is it taken of. What else is deducted. Is clearance included. And what happens to what does not sell.

A higher commission is frequently the better deal, and it is worth understanding why so the number does not decide it for you. A company charging more that clears the house afterwards has absorbed the single largest cost in this whole exercise. A company that reaches genuine buyers for specialist material — through its own list, or an online platform, rather than a sign at the end of the road — routinely returns more on the same contents than the difference in rate. And a company that prices carefully takes longer and gets more for it.

Ask each company for two references from sales in the last six months, and ask the referees one question: did the settlement statement match what you were told to expect? That single question surfaces almost everything this page is about.

Warning signs, in order of how much they should worry you. No written contract. A refusal to state the deductions. A demand for payment up front where the model is commission. Reluctance to let the family attend the sale. No insurance. Vagueness about what happens to unsold items. And any pressure to sign the same day the company first walks the house — there is no reason for that in a business where the sale is three weeks away.

When an estate sale is the wrong answer

Companies decline houses, and it is worth understanding the reasons because they are the same reasons a family should not chase one. A house of ordinary modern furniture and household goods will not gross enough to pay for the days of work, and no rate fixes that. A house that has already been picked over by the family usually will not either — the things that draw buyers are the first things relatives take.

Where there is one genuinely valuable category and little else — a coin collection, tools, a single piece of art — a specialist auction or dealer will usually beat a general sale on that item and the rest can be donated. Where the whole contents are modest, a charity collection and a clearance is faster, cheaper and kinder to everyone's weekend. And where the house has to be empty in a fortnight, there is not time to run a sale properly, which is a reason to accept a clearance rather than a reason to rush a sale.

The honest test: would the sale gross enough that the family's share is worth three weeks of strangers in the house and a fortnight of decisions? For a lot of houses the answer is no, and that is not a failure — it is the reason donation and clearance exist.