Are your closets and cupboards bursting with possessions you no longer need? Now could be a good time to prune your unwanted belongings. And the amount of money you'll make may pleasantly surprise you, especially if you're trying to build up your cash reserves like many other people these days.
Tim Luke, an appraiser and auctioneer in Hobe Sound, Fla., who stars in HGTV's "Cash in the Attic," says, "From my travels around the country, I'm convinced that the average household has $1,000 to $2,000 of potential cash in stuff that they don't use."
The key to successfully selling your castoffs, obviously enough, is finding the right market for them. There are eager buyers for virtually anything that clutters your house, garage, or storage unit. That even includes a plastic bag of soda can pull tabs. Believe it or not, a bag of pull tabs may draw bidders on eBay. A recent search for "pull tab" on that Web site turned up 314 results.
So make room in a corner of your garage and fill it with the possessions that you want to unload. Then select the sale method below that should put the most money in your pocket. First we've listed the methods that will probably take the most time. But for the right items, more time can translate into more cash.
Called garage sales, yard sales, or tag sales, some people adore this American institution. Others hate the idea of spending a weekend haggling with strangers about whether a dog-eared copy of "Valley of the Dolls" is worth a dime or a nickel.
Yard-sale shoppers are likely to snap up clothing and small household goods at bargain prices. So you'll make the most money in the least amount of time if you have many inexpensive, portable items to sell.
Don't underestimate the importance of "portable." Kris and Jack Herzberg of Ridgewood, N.J., teamed up with a neighbor to hold a three-day yard sale last spring. They made about $800 selling clothing, baby gear, and household goods. But no one bought the rolltop desk or Craftsman-style bookcase they had kept in storage since they combined households a decade ago. "I don't know what we were thinking," Kris says. "People would have had to come with a van to buy that big furniture."
Running a weekend yard sale is a workout. You have to haul all the stuff that you want to sell out of your garage, put price tags on everything, and spend the day bargaining with buyers. Then you'll have to move what doesn't sell back into your garage so it will stay safe from thieves and the elements, only to haul it out again the next day.
But first find out if your town requires you to get a permit to hold a yard sale. For example, the Herzbergs had to pay $5 for a permit good for two consecutive days. If you live in Brookline, Mass., you're required to get a permit from town hall but there's no charge for it.
You also need to publicize your sale. You can place classified ads in local newspapers and on free Web sites like Craigslist, Kijiji, GarageSaleHunter, and YardSaleSearch. Be sure to mention any special collectibles that you'll be selling. It's also a good idea to make advertising flyers that you can post on bulletin boards in local businesses and supermarkets. Make large, easy-to-read poster-board signs that you can stake along major routes directing shoppers to your home. You can read more pointers in "Your Hidden Money! How to Have Your Own Profitable Yard, Garage, Block or Estate Sale" (Aztex Corp., 2001).
Holding a yard sale is relatively inexpensive. Aside from any newspaper ads, your only other expense may be $10 or so for paper, poster board, and markers to make flyers and signs. Even if your town requires a permit, it will probably cost no more than a few bucks.
Use a simple size and weight test to decide if you should sell something online. "Don't do it if it's big and heavy and difficult to ship," says Skip McGrath, co-author of "Titanium eBay, Second Edition: A Tactical Guide to Becoming a Millionaire Powerseller" (Alpha, 2009). Do consider selling an item online if you can pack it in a box and take it to a post office without risking a hernia.
If you want to get a sense of how popular your item might be and how much it might sell for on eBay, check the prices of similar items on the site's "completed listings" (meaning the auction has ended). You'll have to register first, but you can do so free. Click on "advanced search" and then check "show completed listings only." There's also a helpful tutorial explaining the steps to selling on the site.
To find information about selling items on Amazon.com, go to the site's Quick Start page.
You need to write descriptions and take photographs of everything you want to sell, post listings online, answer e-mail from potential bidders, and ship whatever sells to the winning bidder. If that sounds too onerous, another option is to use the services of an eBay drop-off store. You can find one in your neighborhood by searching the local Yellow Pages or at yellowpages.com. Most of the stores, which are not part of eBay, will only accept items that are likely to fetch $50 or more, but then they will take care of posting the photos and descriptions, packing and shipping sold items to buyers, and collecting your money for you.
McGrath estimates that you'll pay fees equal to about 10 percent of the money you make from items sold on eBay. The fees include such services as posting your listing, completing a sale, and receiving payment through PayPal, which allows you to accept credit-card payment without establishing an expensive merchant credit-card account. If you use an eBay drop-off store, expect to pay a 30 percent to 40 percent commission.
You owe Amazon money only if your item sells. Commissions range from 6 percent to 15 percent of the sale price, depending on the product. Amazon also levies a closing fee that varies by item, and charges 99 cents for each transaction.
If you own valuable antiques or collectibles you no longer want, auctions can be a place to find likely buyers. Auction houses range from major players like Christie's and Sotheby's, which often sell artwork and rare antiques for millions of dollars, to small-town auction houses that will handle less rarified objects, perhaps selling them at your local Elks Club.
You'll probably get the highest price for a bona-fide antique or collectible by selling it at auction. If you're not sure about the rarity or value of, say, an antique chest or ceramic vase you no longer want, look for similar items in reference books or on Web sites that cater to collectors. Your local library will probably have "Antique Trader Antiques & Collectibles 2009 Price Guide" (Krause Publications, 2008) or similar illustrated books. Or check out Kovels.com, which features prices on more than 600,000 antiques and collectibles.
Finding an auction house for the object you want to sell may require some effort. Take a few photographs of your stuff and write detailed descriptions that you can send to potential auctioneers. Be sure to mention any restoration or repairs and note the item's provenance, especially if you have proof that a famous person once owned it. For the names of auction houses that deal with the type of item you want to sell, check "Kovels' Yellow Pages Second Edition: A Resource Guide for Collectors" (Random House, 2003). To find local auctioneers, check your Yellow Pages or yellowpages.com.
Fees are negotiable and often depend on how much an auctioneer wants your item in a sale. You might be able to get an auctioneer to pay to ship your item to the auction house, for example. In general, you'll pay a sales commission equal to 10 to 25 percent of the sale price. Some auction houses that specialize in selling inexpensive objects charge about 25 to 50 percent.
Ask in advance about the rules for setting a reserve price, below which you will not sell. If your item doesn't move, some auctioneers may charge you a fee of about 5 percent of the reserve price. Some auctioneers may offer to hold your item until their next sale, when they will try to sell it again at a lower price or with no reserve. If it still fails to find a buyer, expect to pay another fee.
The tax collector will also want a cut of your profits. The Internal Revenue Service taxes the proceeds from the sale of collectibles as capital gains, generally at a maximum rate of 28 percent. Under IRS regulations, collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, or alcoholic beverages that you've held more than a year, like a bottle of first-growth Bordeaux. Your profit or loss is the difference between the basis, usually your purchase price, and the sale price. You must keep receipts that establish the basis.
When large pieces of furniture failed to sell at their yard sale, the Herzbergs called a local consignment shop to pick up the items and try to sell them in return for a commission. Although it took about a year for the furniture to sell, at least the couple no longer had to pay more than $100 a month to keep it in a storage unit.
Consignment-shop owners generally don't want to bother with poor-quality furniture, and some take only antiques. Other items an owner may take, like clothing or household goods, should also be in great shape.
Find local consignment shops by doing a ZIP code search on the Web site of the National Association of Resale and Thrift Shops. Once you find a shop, stop by with a few sample items or photos of things you'd like it to consign.
The shop owner will suggest a price for your item and split the proceeds 50-50 with you if it sells. He or she may reduce the asking price if your item doesn't sell in 30, 60, or 90 days. After that, you may have to take it back. Whatever the agreement, get it in writing.
Today local newspapers and Pennysavers have competition from free online listing services like Craigslist and Kijiji. It makes sense to run a free online ad first, and resort to paid advertising only if your free ads don't muster any interest.
Use classified ads to dispose of items that are bulky or basic, like the air conditioner that doesn't fit in your new windows or the bright red IKEA bookcase that your spouse often suggests would make terrific kindling.
Write the ad and find out how to submit it. In general, people looking to buy used household goods through classified ads expect to pay around 10 percent to 20 percent of what it would cost for them to buy a similar item in a store.
Don't invite potential buyers to your home to inspect the item until you've discussed it with them in detail on the telephone and given them a clear idea of the price. "Make sure you're not home alone when potential buyers come over," McGrath adds.
Craigslist and Kijiji are free, while costs to advertise in newspapers and on their Web sites vary widely. You might pay less than $50 for an ad in your neighborhood newspaper but $75 to $150 or so to place one in a large daily.
If efforts to sell your unwanted stuff are unsuccessful, call Goodwill, the Salvation Army, or other charity and ask it to come to your house to pick up leftover items. Then you can take a tax deduction for donations of used clothing and household items that are in good or better condition.
You'll have to do a little legwork to figure out how much you should deduct. The IRS says that the fair market value of used clothing and household goods is the price that buyers would pay for them in a consignment or thrift shop. Some charities provide valuation guides on their Web sites to help you figure out how big a deduction you should claim. For example, the Salvation Army values men's suits in good condition at $15 to $60 each, while Goodwill pegs them at $10 to $30. Choose an amount that makes sense given the garment's age and quality. Tax preparation software, such as TurboTax and TaxCut, also includes valuation guides.
It's important to maintain a paper trail of your contributions in case the IRS audits you. Different rules apply depending on the value of your gifts. If you claim a tax deduction for a noncash contribution worth less than $250, the charity should give you a written acknowledgment that includes its name, the date and location of your donation, and a description of your gift. If the value of your donation falls between $250 and $500, the acknowledgment must also say whether you received goods or services in return (and if you did, an estimate of the value).
The more generous you are, the more paperwork you'll have to fill out. If your gift is worth more than $500, you must attach Form 8283 to your tax return. For donations valued at $5,000 or more, you must also send the IRS a written appraisal of your gift. You can deduct the cost of the appraisal, however, subject to the 2 percent limit for miscellaneous itemized deductions.
This article appeared in the July 2009 issue of Consumer Reports Money Adviser.