It Might Be Worth Something! Estate Liquidation Facts and Fantasies

Transcription

It Might Be Worth
Something!
Estate Liquidation Facts and
Fantasies
Marilyn Ellis, CTACC, CSA
Lighthouse Organizers, LLC
www.lighthouseorganizers.com
(c) Lighthouse Organizers, LLC 2010,2011,2012,2013
What you will learn today:
1.
2.
3.
4.
Basic understanding of non-titled property
Why non titled property distribution is Complicated
The Estate Liquidation Options available
Various Business Models for each
1. Internet
2. Consignment
3. Estate Sale (In Home)
4. Garage/Tag Sale
5. Pawn
6. Auction
7. Donation
8. Hauling
9. Storage (Delayed decision making)
Who Needs Estate Liquidation?
• Estate :Will or Trust
for Deceased
• Living client or
attorney,conservator/
guardian, for person
who must downsize
and dispose of unneeded personal
property.
Everyone Has Property to Transfer
Titled Property Ownership
Owner is identified on a written document:
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Insurance Policies
Annuities
Real Estate (Deeds)
Bank Accounts
Motor Vehicles
Stocks and Bonds
All these are usually clearly identified in the
Trust or Will
Non-titled Property Ownership:
• Owner is not identified with a written
document
• No written instructions for distribution in
Will or Trust.
Non-titled property includes:
•
•
•
•
•
•
•
•
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•
Dishes
Tools
Furniture
Photos
Books and Printed Items
Guns,
Linens and Needlework
Jewelry
Collections
Clothing
It’s the non titled
property, aka
“Grandma’s Yellow
Pie Plate”…
That causes all the frustration,
anger and Heartache for families
and especially Successor Trustees
Your Pie Plates may not be round
and they may not be Yellow,
but every family has its pie plates
Setting and Managing Client
Expectations is complicated
• When…
• Personal property comes with a lot of memories
and emotion
• Sentimental Value often translates into monetary
value in the clients mind
• Client has been influenced by TV shows
• Money clouds judgment .
I might be sitting on a gold mine!
I
American Pickers
Antiques Road Show
At the Auction
Cash and Cari
What The Sell
Treasure Hunters
Clean House
Storage Wars
More shows appearing
every day.
It might be worth something!
IS THIS YOUR CLIENT?
Blood out of Turnip Syndrome
You’ve had it and used it for 20+
years and now you want your money
back?
Seriously?
VALUE IS NOT
BASED ON
WHAT YOU
PAID FOR IT…
SAD BUT TRUE!
Value is based on:
1. If buyers want it (What the market will bear)
2.
Scarcity
3. Collectability
4. Condition:
If its dirty, damaged, missing parts, it may be
worthless
What determines value?*
Antique: (100+ years old)
Historical
Unique/Rare
Collectible
Currently in demand
SCARCITY
In other words: Are you sure anybody wants it?
*Old does not always equal valuable
Words to live by
New: From the factory, never been used (still
in the box, still has tags on.)
Used: Product was opened and used
Good Condition: Some signs of wear
Excellent Condition: Used but no signs of
wear.
Vintage: Iconic, classic representation of the
“best of “ of a certain period of time.
It’s not easy to tell reproductions
from the real deal.
Determine Value by
Knowing your stuff!
Clients will often be CONVINCED that the piece is rare and valuable
based on family legend and heresay. They don’t like discovering
the truth, will argue and may even “shoot the messenger”.
This is a tough business!
With furniture,
It’s all in the legs!
A quick overview just so you understand the process.
Special:Se
Colonial
1600-1800
Chippendale
Heppelwhite
current
Windsor
(Tavern Chair)
Early American
1640-1700
Queen Anne
1665-1714
Federal
1789-1823
Size:
Type:
Duncan Phyfe
Victorian
1837-1901
Art Noveau
1890-1910
Edwardian
1901-1910
Art Deco
1920-1939
Size:
Type:
Iconic “armchair architecture”
Mid Century Modern
1950-1969
American Folk Art
Tole painting
Hate to be the bearer of bad news, but…
However beautiful handcraft work might be.
Unless your Aunt Bertha was a well known artist
With a proven sales record, those homemade items
may be worth pennies on the dollar or donation worthy.
Exception: Vintage clothing and textiles, but must be in
Good condition (not dirty, stained, moldy,
ripped, moth eaten, etc.)
Samplers/Needlework (maybe)
The Market is very fickle
One day something is “hot” and the next day it is not.
It may be that there has been a sudden flood on the market.
As populations age and die, certain period pieces flood onto the
market:
Art deco and Victorian do not bring high prices right now,
except for very rare items.
What’s Hot and What’s Not
(at the moment)
Hot
• Sterling Silver based on
•
•
•
•
Daily melt rate
Name
Pattern
Condition
• 1950’s Furniture (mid
century modern)
• European paintings
• Asian (in Western States)
•
•
•
•
•
Not
Silver Plate
Victorian & Art Deco
Furniture (with some “one
off” exceptions)
Old Pianos (can’t sell with
ivory keys in most states)
Old, brown, heavy, bulky
wooden furniture
Hummels, Lladro, Bradford
Exchange, Franklin Mint,
Thomas Kincade prints
A word about “collectables”
1. Magazines and TV advertising
“collectables” are very misleading.
2. Their Target Market:
•.
‘Wanna be’ investors who are
distrustful of, or lack enough
funds to invest in the stock
market
•
Want to own something
tangible rather than on
paper
Reality Check
Items mass produced in factories
ARE NOT SCARCE
Even though individual items in these “collections” often cost $60+ each
retail, Auction hammer prices range from $2- $5 each.
Expensive Prints in Expensive Frames that sell in galleries for $1500+
and marketed as “limited editions”, usually resell for $25 at auction. You
know something is wrong when…
The galleries WILL NOT BUY them back.
Moral: If you like these items, visit an Auction house rather than buy
retail!
Wise Words
1. Never buy Art for investment.
2. Only buy what you like.
3. Don’t expect any increase in value
or to even get your money back on
resale.
4. Be content that the Art makes you
happy.
5. Any reputable Art Dealer will
tell you this.
Are you beginning to
realize that your clients
need expert help with
Estate Liquidation?
“Due diligence means never having
to say you‘re sorry” .
Nobody wants to be haunted by
“what ifs” and “if only”
Internet Sales
Model
EBay: National Sales
Craig’s List: Local Sales
• Find out what price others
are asking for the same kind
of item. Doesn’t mean
they’ll get it.
• Postage/Shipping will be
extra.
• Find out what price locals
are asking for the same kind
of item: Personal Pickup up
of item at your home
Checks may bounce.
Strangers in your
home. News reports of
fraud and murder.
Consignment
Business Model
Evaluate at approx 25% OF
RETAIL VALUE just to
move the merchandise.
50% Commission on Final
sales price
Many on staff are untrained
in evaluation.
On-site Estate Liquidation
Business Model
Potential Total Sales (value of property) must cover expenses
and provide reasonable profit for Estate Liquidator as well as
Estate
3-5 days paid staff for intensive labor to get ready for sale
$250-$500 for print advertising
5 paid staff for 2-3 days of sale (sales & theft prevention)
Usually a 50% split with EL and family
Cost of Hauling/Donating what is left over
Most likely need a minimum of $10,000 in sales to make it
worthwhile. Average households usually do not qualify
DIY Garage Sales
It had better be worth it
Consider this about
Garage Sales
1. Very labor intensive
2. Advance advertising will cost approx $300
or more
3. Buyers expect deals and clients will be
insulted
4. What is not sold will have to be disposed of
anyway
5. May not be in clients best interest
a.House should not be seen before it is
ready for sale.
b.Exposes potential buyers to nosy and
talkative neighbors
Pawn Shop
Business Model
•Loan money *with interest and secured
with goods as collateral
•Usually expect repayment in 90 days
•Also Buy outright and sell in their shop
•Price determined by pawn shop owner.
Usually 33% or less of retail price.
•Remember, they have to re-sell it
*Interest rate is set by individual State
http://www.utsandiego.com/news/2009/ap
r/10/1c11questiom172023-smartlivingpawn/ (c) Lighthouse Organizers, LLC 2010,2011,2012,2013
Pickers Business Model
Dealers who shop for specific items for specific clients.
Clients are usually NOT general public (unless
Pickers also have their own retail store)
Clients are:
Interior designers, (homes and businesses)
Set Designers
Photographers
Collectors
They have a list of things clients have already
requested. They will usually offer the seller 33% of
retail value.
AUCTION HOUSE
Business Model
The sum total value of the property is AT LEAST
$1,000 (Some auction houses may have a
different minimum)
2. Many will do estate clean-outs including ordinary
household goods.
2. They take 30%-50% commission
(rate goes down as hammer price goes up)
3. They usually dispose/donate what does not sell.
4. You have option to take back what does not sell
Auction Houses have experts to
properly value your property
Here’s a tip: Stories Add Value!
• If you have an old photo of the piece.
• A story about it connected to a special event
in history.
• Document regarding the piece
• If it is connected to a famous person, place
or event.
THIS IS CALLED A PROVENANCE
and may add value.
Many Auction Houses…
• Offer Free Appraisal Clinics
• Will Appraise by Email (DIGITAL
PHOTOS) for free*
Written Appraisals for Insurance
Purposes
Are By Appointment only and
You will be charged a Fee
* An appraisal is not a guarantee of final
hammer price.
Auction Turn Around Time
• Auction usually takes place 30-90 days after
Receipt of items.
• Auction House may decide to schedule with
a larger collection of the same genre or
theme to increase probability of higher
hammer price
• Auction Houses have large lists of potential
buyers for added exposure.
Storage
Business Model (Delay)
It’s too daunting. Let’s just store
the stuff and think about it later.
=
According to the National Association of
Professional Organizers (NAPO) there is
7 sq feet of commercial storage space for
every man woman and child in the USA
7 X 250 million square
feet =
OR
$150 X 12 months = $1800 per year
Hauling
Business Model
1. Find an “eco friendly”
Hauler who will sort, re-cycle
and donate for you.
2. Depending on location, one
full truck = $500-$800+
3. Haulers also clean up and
sweep area!
Donation
Model
• Charities are hurting right now
• They will often do the entire cleanout for
you at no charge if you have enough value
• It’s the right thing to do.
• Generosity blesses the donor
• Tax deduction for client or estate
Gift to Friends and Relatives,
especially if client is still living
1. Have a gifting party
2. Add fun by making it a raffle
3. Honor friends who will not be
considered by surviving family
and would love something of
yours to remember you by.
4. Don’t cheat yourself out of “thank
you’s” while you are alive.
I have found this quote to be
very persuasive:
“When you let go of what you have
but don’t need, God can come in
and bless you. But when you hold
on to everything, there’s no room
for new blessings.”
• Jodie Watson, Organize Magazine,
May 2008
RESOURCES
“WhoGetsGrandma’sYellowPiePlate?Transferringnon‐ titled
Property”, onlinearticlebyMarleneS.Stum,UniversityofMontana
www.msuextension.org
WhoGetsGrandma’sYellowPiePlate?AWorkbook, MarleneS.
Stum,UniversityServicesPress,Feb1,1999
TheBoomerBurden, JulieHall,ThomasNelsonPress,Nashville,TN,
2009
MillersInternationalAntiquesPriceGuide,ReedBooksLtd,Kent,
UK,2012
AmericanSocietyofEstateLiquidators(ASEL) 6420‐A1ReaRoad
#135Charlotte,[email protected] 800‐272‐4431
ACCESSCODE"00"
JulieHall,TheEstateLady.President,AmericaSocietyofEstate
Liquidators704‐543‐1051 www.theestatelady.com
NationalAssociationofSeniorMoveManagers(NASMM)
www.nasmm.org
NationalAssociationofProfessionalOrganizers(NAPO)
www.napo.net

It Might Be Worth Something! Estate Liquidation Facts and Fantasies

Transcription

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