Estate Auctions vs Tag Sales
At some point in many peoples lives, there comes a time when they have to deal with the difficult task of liquidating someones estate. Its at this
point that the question typically comes up, should I use an auction or a tag sale? Both processes serve similar purposes, however, there are some
distinct differences in the two that in our opinion make holding an auction the
hands down winner.
Both seek to sell the contents of an estate or home but that is pretty much
where the similarities end.
In most states and certainly in Alabama, Tennessee and Mississippi auctioneers
and auction companies are required to be licensed and are governed by a
licensing body to protect the publics interest. Typically, managers running tag
sales have no licensing requirements of any kind and if you have a complaint
about thier ethical practices or performance, tough, there is no one to take it
Tag sales typically last multiple days. The merchandise is priced (tagged) by an
individual or company managing the sale and on each day following the first, the
prices are slashed typically by 25-50%. On the last day, once the sale is over,
many times up to 20% or more of the merchandise has remained unsold causing the
administrator of the estate to deal with the remaining goods. Often the manager
of the tag sale will make an offer for everything remaining giving way to
question whether items were over priced intentionally at the onset so they
wouldn't sell. At an auction, the prices are set by the market based on bidding
activitiy and an items worth will be determined by said activity thus giving way
to a fair market value. Often emotions get involved in the auction process and
bidders are not willing to stop until they get what they want causing items to
excel far beyond anticipated prices. This can not happen at a tag sale as the
price is set on the tag before the start of the sale and because of this, if an
item is under priced for lack of knowledge, the estate is the loser.
In most cases, the companies managing tag sales CAN NOT sell the real property
for the estate wheras most auction companies who deal with estates also work in
the real estate industry allowing them to sell the real estate at the same
auction the personal property sells at.
If you are unable to attend an auction, in most cases, the auction company will
accept absentee bids or phone bids helping to maximize the return for the
estate. Again, because of the nature of the tag sale, this simply won't happen.
You will pay a commission based on sales to both the auction company and the
company or individual managing the tag sale. The difference is that often an
auction company can charge a smaller commission to the estate than the tag sale
company by charging a buyers premium to the successful bidders thereby spreading
the burden of the commission out between multiple parties and relieving the
estate of the full burden.
DOWNFALLS TO A TAG SALE
1. 100% of the items will sell for NO MORE than the tagged price.
2. Upwards of 20% or more of the merchandise goes unsold by the end of the sale.
3. At times, items are under priced and sold to dealers, family or friends of the tag sale manager.
4. Regulation and licensing of tag sale providers is virtually non-existant in the US. Harmed sellers
only option is to sue in court.
5. Most tag sale providers lack the ability to market nationally and include the most informed buyers for
rare and unusual items.
6. Many tag sale service providers lack the expertise to price the merchandise appropriately.
7. Some unethical service providers will overprice the high end items leaving them unsold till the last
day giving them the option to buy the
items at a large discount or to sell them off to friends and family at a
Copyright Spring Creek Auction Co. 2009