The Importance of Contracts For Estate Liquidation Businesses
As estate liquidators, we are always hearing from people who want to get into the estate sale industry. They want to know how it is done and where to start. Often people only see the fun side of being an estate seller – sale day and the thrill of the treasure hunt. As estate liquidators, we do loads of behind the scenes work and we are exposed to many difficult disputes and problems. Sometimes no matter how hard we work, or how diplomatic we are, or how great our work is, someone is just not pleased and we may be faced with threats of bad reviews or even lawsuits.
Every time someone has threatened to take action against me, I have been able to point out that I am doing what is required of me per the terms of our contract and in some cases I have been able emphasize that things they promised me in the contract that had not been fulfilled on their end, so if they were to file for mediation, it could very well turn out that they were paying me not the other way around.
The liquidation community is generally open with one another – I hear a lot of the stories that people face when they are conducting sales. People ask what they should do when clients remove the best property after a sale has been set up, or what to do if they have been locked out of an estate sale they set up. Issues like this should all be addressed in your contract in advance of your work. I remember reading one comment from an estate liquidator who didn’t use contracts, they just wrote their commission percentage on the back of their card and gave it to the client.
Everyone operating an estate sale business needs a solid set of contracts.
Contracts define the relationships that both parties have in any given business transaction – whether you are hiring an independent contractor, an employee or planning to conduct an estate sale for a client. Contracts ensure that both parties know what is expected of them. When you complete your consults by going over a contract before signing it, you answer questions at the time and you can help ensure that everyone is on the same page. A contract can ensure that both parties know what is expected of them before any work begins. And a contract establishes what will happen if either party doesn’t do what was expected.
So in an estate sale contract, if you indicate that the client may not remove items you were told you could sell from the sale – and they do anyway, you can also establish an understanding that they will be paying you a commission on the items removed from the sale. If you were told that you would be selling their family pick up truck at the consult but they later decided to sell it privately, this would be a violation of your contract, which is only fair because you may not have even taken the sale without a high value item like that in it, and you based your commission rate on what they told you was for sale.
You should not be faced with losing money or a slimmer profit in these circumstances. You are running a business, you don’t do this just for fun, right? As an estate liquidator, this circumstance occurs often and knowing in advance that your bottom line has been protected eliminates conflicts with your clients.
Contracts can also save you legal costs if something does go wrong, my estate sale contract states that all parties agree to professional mediation, which is an alternative to a court lawsuit. It is faster and cheaper than a court case. You can even specify that the losing party would pay legal fees of both sides, this increases the risks associated with filing a suit and can help make a court case less likely.
I see a tremendous need for the services estate liquidators provide all across the country. This is a great industry and there are many different types of both appraisers and liquidators out there. There can be lots of competition.
When my family moved across the country from Pennsylvania to California and I opened my business, I didn’t know anyone here. I thought it would take months or even a year to build up the contacts I would need to land my first job.
The first thing I did was put together a very affordable but well written website and then I started getting called for consults. A lot of people find me online, but as my business has grown, now I get referrals from Realtors, past clients and customers who shop at my sales. My business met all of its goals outlined in my business plan for each of its first three years. And I have been very fortunate to have excelled in a competitive field. I would love to help others do the same.
I created the Estate Sale Business Kit: No Nonsense Materials that Estate Liquidators Need to help anyone in the industry who needs a solid set of business materials. The book includes estate sale contracts for every type of sale, my consulting agreement, employee and contractor agreements, an employee handbook, a non competition and non disclosure agreement and my sample business plan.
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