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[This information comes from the ADAA website with their permission. You may read the entire unedited information on their website by clicking here.]
Auctions have become big business in the last two decades. A vast number of lots in categories ranging from ancient to contemporary flow through the salesrooms each year, and one needs considerable knowledge of the art market to properly evaluate these sales and their attendant publicity. The press often stresses extreme results—both high and low—when reporting on auctions. However, in order to understand the true significance of a given sales result, one must look at the market as a whole. It is important to recognize that the prices achieved at auction do not necessarily reflect the true fair-market value of the works in question. One can easily overpay at auction, and when selling at auction, one may well end up netting less than by selling through a dealer. For both sellers and buyers, auctions are a gamble in which control is ceded to fickle and sometimes irrational forces. Buying from or selling through a dealer allows for more reasoned decisions, with adequate time for research and consideration. Dealers are able to give personal attention to buyers and sellers at all levels of the market, while auctioneers lavish much of their energy on multi-million-dollar lots. Many CINOA affiliated dealers have made a long-term commitment to the art and artists they represent, whereas auctioneers seldom look much further than the next sale.
Before Buying at Auction, Ask a Trusted Dealer for Advice
CINOA affiliated dealers are generally willing to accompany collectors to sales previews as well as auctions and frequently execute bids on behalf of clients. Unlike auction-house personnel, dealers have no vested interest in the outcome of a sale and are therefore able to offer impartial advice.
Before buying at auction, it is prudent to ask an experienced dealer to examine the work and evaluate its condition and quality. This is particularly important when a collector cannot attend the sales preview in person, as catalogue reproductions are frequently inaccurate.
Don’t assume that a work is in good condition just because no condition problems are mentioned in the catalogue. Catalogue descriptions and auction-house condition reports are not always reliable. If questions arise upon personal examination, a dealer can engage an independent restorer to provide an additional report.
Dealers can also help collectors bid. In addition to suggesting an appropriate price, a dealer can tell whether there is genuine interest in the salesroom or on the phone. Auctioneers are allowed to bid against the audience on behalf of the consignor, up to the seller’s reserve. In such a situation, a buyer may well end up overpaying. Having a dealer bid on your behalf can prevent you from getting unwisely swept up in the excitement of the moment.
Don’t be Misled by Pre-sale Estimates
Pre-sale estimates published in auction catalogues are not necessarily predictive of final sales results or of fair value. Estimates are frequently the result of a negotiation between the auction-house and the consignor and may represent wishful thinking on both sides. At other times, estimates are intentionally set low to attract bidding. Auction-house specialists rely largely on public sales of supposedly comparable works when setting estimates, whereas a dealer is also familiar with private sales and often has more insight into the true value of the work in question. A dealer who specializes in a particular field can evaluate presale estimates and suggest the correct price to pay for a work in the light of current market factors.
Don’t be Misled in the Salesroom
Many factors, both objective and subjective, can affect the outcome of an auction, and things in the salesroom are not always what they seem. A work that sells well below its estimate is not necessarily a bargain. If a lot appears to be going cheaply, it may be that the estimate was too high. Possibly the work is in bad condition. Perhaps the attribution is doubtful and other bidders have been warned off. On the other hand, the most expensive works in a sale are not necessarily the best. Auction fever can drive up the prices of lesser works. Seasoned auction-goers set a limit beforehand and do their best not to exceed it, no matter how frantic the bidding becomes.
Do your homework before the sale, and don’t be afraid to enlist the assistance of an experienced dealer. The modest fee most dealers charge for their services could save you from a far more costly mistake.
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