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Estate Sale Contracts – How to Avoid a Costly Cancellation

Posted by Justin Elliott on May 23, 2017
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For an owner or heir, an estate sale can be the most efficient way to dispose of a houseful of unwanted items. They sign a contract and step away from the process, allowing the professional to handle the proceedings. But what happens when a change of plans occurs, and the contract is cancelled? Knowing the full terms of the contract – including the cancellation policy – is the best way to protect against unnecessary stress and cost.

An estate sale contract is just like any other contract – it details the rights and duties of each party, and outlines the specific costs of the transaction.  In effect, it protects both parties by making the terms of the deal transparent. Sometimes, however, a seller will decide not to proceed with the sale, and expects to terminate the contract without any fees or payments, since the sale did not occur. That’s when understanding the cancellation policy is critical. Depending upon when the cancellation is issued, the estate sale company may have already invested quite a bit of expense and time into the sale, and they would rightfully expect to recoup those costs.

An estate sale company usually goes to work immediately after the contract is signed. Sellers generally want to dispose of the property quickly, so professional liquidators don’t waste time. They assess the situation, hire the appropriate labor, apply for permits (if necessary), arrange for trash dumpsters, and begin advertising the sale. If the property is in poor condition, staff may be sent to remediate hazards so the location is safe for the public during the sale. All of this requires funding, and these costs are usually recovered in the estate sale company’s proceeds at the conclusion of the sale. When the sale doesn’t happen, the liquidator is still liable for these expenses, and the seller should expect to pay for work performed on their behalf.

Many estate sale companies have begun charging an upfront fee to begin work, similar to the retainer fee of an attorney. This is the result of an alarming trend where sellers hire a company to come in and sort, clean, and inventory the property in preparation for the sale, then cancel. They may elect to use a cheaper liquidator, or even do it themselves.  In either case, the estate sale company suffers, as they must still pay for the preparation services. They may lose even more money if they’ve turned down other business in order to prepare for and conduct the cancelled sale. It would not be uncommon for the liquidator to take the seller to small claims court to recover the out-of-pocket costs.

The lesson here is for the seller to understand and prioritize their objectives for the estate sale. If they just want it to be as cheap as possible, they need to go with a less expensive liquidator. If they want to get top dollar from the sale and be treated with professional courtesy, they need to make that decision and stay with it. For the professional liquidator, this business is not a hobby, and sellers should recognize the experience and expertise that they bring to the table. The time to address any doubts or concerns is before the contract is signed, so the cancellation policy needn’t be invoked. In the end, a professional estate sale company will minimize stress and maximize profit for the seller.


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