How To Start An Estate Sale Company

How To Start An Estate Sale Company

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The real estate industry is booming. As baby boomers continue to age and downsize their living situations, the demand for companies to help them dispose of their assets is skyrocketing. According to IBISWorld, the real estate sales services sector will reach $236.1 million in 2023. Now is a good time to start a real estate business.

How To Start An Estate Sale Company

How To Start An Estate Sale Company

You don’t need previous experience to get started. Armed with an understanding of the liquidation process, marketing tactics, legal requirements and client relations, entrepreneurs from all backgrounds can tap into the industry’s potential.

How Do Estate Sale Companies Work

This guide will walk you through how to start selling real estate from the ground up. From registering for an EIN to getting the right business insurance and marketing your brand, we’ll explore the practical steps to turn your passion for antiques and used goods into a thriving business.

Market research is important when starting a local real estate business. It offers details about your target market, local market saturation and trends in products and services.

Industry analysis confirms that selling real estate today offers a compelling business opportunity. The use of specialization and differentiation of services allows new entrepreneurs to compete and secure market share in the real estate liquidation industry.

Starting a real estate business successfully requires understanding your competitors. Conduct a competitive analysis of real estate sales in your geographic target area.

How To Have An Estate Sale In Portland, Oregon: 6 Tips For Success

Search Google Maps for property liquidators near you. Note their location, branding, areas of expertise and online presence. Drive by retail locations (if applicable) and monitor traffic, display appearance and inventory offerings.

Evaluating your competitors’ digital footprint is also important, as much of real estate marketing today takes place online. Search for their business names and uncover websites, social media pages and reviews.

Analyzing competitors across key metrics from location and brand to reviews and niche will reveal strategic opportunities to position your differentiated services.

How To Start An Estate Sale Company

Starting a real estate business requires an initial investment before you can begin operations and generate revenue. Some of the business expenses you will encounter before and after your first real estate sale include:

Brown Button Estate Sale Services

In total, plan ongoing operating costs of approx. $6500 per month as you work to drive sales through real estate liquidations. Keep costs low in the first year as you reinvest profits back into growth.

When starting a real estate business, you must choose a legal entity under which to register. Each type of entity has tax, liability protection and ease of incorporation implications that new entrepreneurs must consider.

A single owner is the simplest and most common default option. You own all assets and debts without legal separation of personal and business finances. Although it’s easy to set up, sole proprietors receive unlimited liability, meaning your assets can be seized to settle business debts and lawsuits.

The formation of a general partnership divides ownership between two or more partners. However, each partner assumes unlimited personal responsibility for debts and legal problems arising in the course of the business. Disputes can also break up partnerships more easily.

How To Hire A Reputable Estate Sale Company

Because real estate sales often involve the exchange of high-value goods, liability protection makes formations like limited liability companies (LLCs) smart choices. LLCs limit owner liability and protect personal assets from company debts and legal judgments. LLCs also impose fewer operating requirements than corporations.

Converting to a corporation in the future remains easier with an LLC as well. In general, corporations are more suitable for large companies. They require more complex registration and their creation is costly.

Even sole proprietor real estate businesses must obtain an Employer Identification Number (EIN) from the IRS for tax purposes. An EIN acts as a social security number for your company.

How To Start An Estate Sale Company

Obtaining your unique EIN is free and easy through the IRS website. The online application takes less than 15 minutes to complete. You will need your personal identification documents, business address and details of the ownership structure.

Estate Sale Company Near Me

Once submitted, your EIN will be issued immediately. The IRS will email a confirmation notice containing your new tax filing number.

You will also need to register with your state to collect and remit sales tax on real estate sales transactions. Each state has slightly different procedures, but it generally involves submitting a simple form and paying a nominal fee. For example, applying for a California dealer permit costs $20 and takes a few minutes to complete.

Check your state’s business tax resources to apply for required sales licenses, understand tax obligations, and process payments smoothly. Staying compliant means your growing real estate company will avoid potentially costly penalties in the future.

Keeping accurate financial records is essential in the real estate business, where high-value inventory constantly changes hands and commission percentages determine profits. Without careful accounting, you risk facing IRS penalties, tax overpayments, or a lack of clarity needed to make optimal strategic decisions.

How Hard Is It To Start An Estate Liquidation Business?

Start by separating your personal and business bank accounts. Never pay personal expenses from your business checking account. Opening a dedicated account provides clear documentation of all business income and expenses that flow through it.

Get accounting software like QuickBooks to centralize your finances automatically. Connecting bank/credit card accounts to QuickBooks allows easy categorization of each transaction, invoice tracking, and hassle-free tax documentation. This eliminates the tedious work of manual data entry and reconciliation.

While the software handles the daily logging, work with the accountant on a quarterly basis. Expect costs between $200-$500 per month for routine bookkeeping and financial statement preparation. After tax season, your accountant can also handle sales tax calculations, tax payments, payroll filing, and compiling your annual statements for about $1,000-$2,000.

How To Start An Estate Sale Company

Getting a business credit card also simplifies record keeping with clear documentation of business purchases. Business cards work like consumer cards, but using them won’t affect your credit score. Limits correspond to your planned monthly expenses rather than individual income, like personal cards.

Estate Sales Company Rules And Industry Guidelines

Operating a legal asset disposal facility means demonstrating compliance through required licenses and permits. Federal licensing information can be found through the US Small Business Administration. SBA also offers a local search tool for state and city requirements.

For example, at the federal level, an estate sale business must obtain a used goods dealer’s license under IRS Publication 526. Report inventory acquisition details within 30 days for all goods purchased except vehicles. This proves legal sources and ownership should audits occur later.

Depending on the areas of operation, such as aviation, agriculture, alcohol, firearms, or hazardous material disposal, several other federal permits may also apply. Assess current and future services to ensure full compliance.

Another compliance checkpoint is licensing at the state level. Common required permits include a professional dealer license, sales tax registration tied to your EIN, and special use licenses for transporting oversized vehicles.

Questions To Ask An Estate Sale Company

For example, those transporting large furniture or utility vehicles for property removal may need commercial driver’s licenses (CDLs) and transport permits that state the maximum weight of the load.

To identify required documentation, contact the Secretary of State’s office using the Small Business Licensing Guide. Renew licenses annually also according to state guidelines.

At the county level, zoning permits likely apply to all leased brick-and-mortar retail space or fixed-site warehouse uses. Different districts enforce specific rules regarding hours of operation, number of customers, signage or building access for persons with disabilities.

How To Start An Estate Sale Company

Reconfirm compliance when signing any real estate lease or remodeling retail location. The same often applies to the conclusion of contracts for the organization of regular real estate sales in private locations.

Key Considerations For Choosing The Perfect Estate Sale Company

Real estate insurance protects your business’s financial viability against unforeseen losses. The frequency of changing owners of high-value goods makes specific coverage vital from day one.

For example, general liability insurance protects when property damage or personal injury to third parties occurs as a result of your activities. Includes legal judgments should the customer be injured during the sale.

Another key policy is employee theft insurance, which protects against inventory depletion when employees steal. Criminal bonds also cover financial losses from robberies, computer fraud, forgery and other criminal activity.

Operating without insurance leaves a serious vulnerability. Consider having a contract moving company drop in and destroy a complete antique bedroom. Or a late-night burglary causes $20,000 worth of jewelry to disappear from your safe deposit box. Both easily mean going out of business without proper coverage.

Tips To Help You Choose The Right Estate Sale Company

Compared to these numbers, annual premiums cost reasonable pennies on the dollar. They eliminate the need to personally cover the five- and six-figure risk options that accompany real estate sales.

Getting quotes involves simply submitting details such as your business type, location, number of employees and revenue online through insurer websites such as The Hartford and Next Insurance.

Evaluate whether current cash reserves could sustain your business through the incident examples provided. If there is uncertainty, get insured immediately.

How To Start An Estate Sale Company

Running an estate liquidation business involves frequent off-site meetings with clients and weeks of remote work spent coordinating sales. A formal office remains helpful for conducting consultations, safely storing sensitive documents, and separating professional and personal life. Weighing options such as:

Top 4 Benefits Of Hiring An Estate Sale Company

Converting a spare bedroom into a basic home office costs a little up front. It provides privacy for client meetings and flexible 24/7 access for business meetings into the night. However, storing valuables in place and disturbing family members often undermines productivity and safety. Expect around $100-$200 for a setup with a basic table and supplies.

Nearby WeWork locations offer comfortable on-demand meeting rooms starting at $40/hour. Store commonly used equipment in cubicles with 24/7 member access. Tiered monthly memberships like WeWork Virtual Office also provide a business address that you can professionally display on websites/business cards starting at $60/month.

For real estate operators planning retail components

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