…by confused collectors who know I worked thirteen years in an auction house:
—Mary-Anne Martin, Winter 1996
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How can it save me money to ask a professional to bid for me at auction?
An experienced bidder can hear when there is real interest from the room or the phone and can also tell when no one is really bidding except the auctioneer (in behalf of the owner). In the latter case you are not really in a competitive situation, i.e., the cost of the work is not market driven. If you are simply bidding against the owner, you may well be paying too much.
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Why should I ask a professional advisor to examine a work for me before I buy?
A professional advisor will always check the condition report for a work before bidding. These conditions reports are usually available at good auction houses, but you have to ask for them. Don’t just assume that because condition is not mentioned in the catalogue that a work is in good condition. A good advisor will also look at the work in person and evaluate the condition, compare how the work actually looks with the illustration in the catalogue (the difference can be shocking sometimes). If any questions arise on personal examination it may be necessary to engage a professional restorer to provide an additional report, for a fee. This can be money well spent since auction houses freely admit that their own cataloguers are not professional restorers and that the in-house condition reports they prepare are only the result of a superficial examination under an ultra violet lamp. Certainly the auction personnel do not make any claims about what cleaning or repairs can or cannot be safely attempted on a work they are offering, and the advice of a restorer may be invaluable in determining whether a painting that is not in perfect condition can be safely restored. Some works should not be touched, so if you are not satisfied with the way a work looks “as is” you should check with a restorer before you buy, not after.
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How reliable are pre-sale estimates? Are auction prices always wholesale?
A professional advisor will compare what’s “on the block” with what’s available “on the market.” Record prices are just that: the highest public price ever paid for a particular object. This is nice for the seller, when it happens, but if you are a buyer you can be paying over retail! I always remember when I buy at auction, that I was the person in the room willing to pay more than 600 or 700 people! This is fine in the case of a masterpiece, like the Frida Kahlo, Diego and I, that I bought in 1990 for only $1,430,000 (the good old days), but not necessarily so smart for works readily available at galleries and art fairs.
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What should I consider when I buy at auction? Or from a dealer?
A professional advisor will discuss with you the five most important points to remember when considering the purchase of a work or art: quality, rarity, condition, provenance and price. No one of these points is sufficient to warrant overlooking the others. All of these points should figure into your decision, even if you decide to make allowances in special cases. For example, if a work were extremely rare, you might have to accept a less than perfect state of preservation. But it would seem imprudent to buy a readily available work in less than fine condition.
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What is provenance? How important is it?
Provenance – literally, where a work came from before is always important. It is never a bargain to acquire a work with unknown or dubious provenance, no matter how reasonable the price. On the other hand, provenance can cost you money. I have seen collectors succumb to mass hysteria in the fever to acquire a shred of something that belonged to someone famous. That is why some cookie jars that belonged to Andy Warhol went for $25,000 in the celebrated Andy Warhol single owner sale at Sotheby’s. And worn ballet slippers that were used by Rudolph Nureyev fetched thousands of dollars whereas ordinary slippers would be worth nothing. That is provenance at work and it is something that auction houses exploit superbly. But if all you want is a collectable cookie jar you can save a lot of money by waiting for an ordinary auction at Christie’s East or by hitting the flea markets.
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If the price is low, am I getting a bargain?
In fact a really low price should sound an alarm in some situations. Never buy something because you are given a story that the owner is in great distress and is willing to sell cheaply if the money comes quickly. I have frequently seen fakes offered in such cases and have personally saved a few collectors many thousands of dollars when I was consulted beforehand about “bargain” pictures. The trouble is, many buyers are convinced that they do not have time to go through the methodical and prudent procedures they would employ in normal situations, and this is when big mistakes can be made. In fact, it is exactly what the pressure salesmen are relying on. Never suspend your judgment because a price seems cheap. Don’t think that because you are dealing with art it is any different from your normal life. If someone offered you a house or a piece of land at a great price you would still check the title and have the property professionally examined before you paid the seller. Why would you behave differently in the case of an artwork?
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If the price is high, am I being cheated?
Price should be a consideration but not the only one. I have seen many collectors pass on great paintings because they thought the price was too high and then go on to form very mediocre collections. These collections are usually hard to resell because they are just merchandise. Some of the finest and ultimately most valuable collections I have seen were put together by collectors who understood that sometimes paying the price pays off. When markets fall off, it is generally the exceptional works that hold their value.
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If I notice a painting in an auction going way below the estimate, should I buy it? Isn’t that a bargain?
Not necessarily. Certainly bargains can come up at auctions and a prepared buyer can get a great buy if for some reason the owner’s reserve, or minimum price is very low. But if a work seems to be going cheaply it may just be that the estimate is too high and the auctioneer is having trouble getting buyers into the bidding, even if the price seems ridiculously low to you. If you enter in at that point, you may just be bidding against the auctioneer, who is acting for the seller. If you haven’t done any comparison shopping in relation to that lot you could be making a mistake. Also, if you bid on something that you didn’t examine first, you are making the classic mistake of novice auctiongoers: bidding on impulse. Maybe the picture is in bad condition, and that’s why no one is bidding. Maybe the attribution is doubtful and other bidders have been warned off. You wouldn’t know, because you didn’t check with anyone first. So be careful about bidding on works that you weren’t thinking about acquiring before you entered the saleroom.
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If I buy the most expensive works in a sale, I’m buying the best, right?
No, sometimes the best works go very high, but sometimes flukes occur. In several cases I observed very small but nice works going for way over the estimated prices, immediately after a large important work by the same artist did very well. A small work by the popular Nicaraguan artist, Armando Morales, went for almost $100,000 in one of the recent sales, right after a large and important work by the same artist went very high. The price for the large work was justifiable, but the small work was way over priced (a friend of mine refused an opportunity to buy the very same picture directly from the owner this summer for $40,000) and I suspect the purchaser will have a difficult time getting his money back should he try to resell the painting any time soon. I have seen postage stamp sized Tamayo paintings of watermelons (the most sought after subject) go for over $100,000 at auction (stocking stuffers, perhaps?) which couldn’t possibly be sold for that amount now, and I have seen mediocre, atypical works by Frida Kahlo fetch crazy prices in the second day sale ($100,000 for an early watercolor in 1990) right after a record price was established in the night sale for one of her masterpieces. Auction fever drives these prices up and the fear (incorrect) that it will never again be possible to acquire a work by an artist who is suddenly doing well. The truth is that there is always an opportunity to buy again at the correct price – you may just have to wait awhile for the right opportunity to present itself. But buying rashly out of desperation is not good idea and it can be costly.
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So if I wait until after the sale and see what didn’t sell, I can really get a bargain?
Not necessarily. I was recently asked this question by a client of my gallery who thought that a painting by a famous artist that was bought in for less than half of what it sold for a few years ago would be a bargain if he could get it for the price at which it was passed over in the sale. I explained to him that it was really necessary to consider if the picture had been sold at the right price the first time round or if had been inflated for some reason. I checked the 1992 price marked in my catalogue (not the published price in the pricelist, which is 10 to 15% higher because of the buyer’s premium) and it turned out that the painting had indeed sold for twice as much in 1992. However, I pointed out that the price it fetched the first time was exactly the low estimate and that I had noted in my catalogue that the purchaser in 1992 was one of the big new (inexperienced) buyers who had been bidding against the auctioneer only (no other bidders) and had paid what was probably the owner’s reserve price. Now that this buyer was forced by circumstances to become a seller, the auction house had advised him to set a much lower minimum price than the price he himself had paid three years earlier, and still the work was not sold. My advice to the collector seeking to make a deal after the sale was that the seller had paid too much originally and that even at half the price, the painting was not really a bargain.
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How come my reserve was $150,000 and my picture was sold for $140,000?
A friend of mine who consigned a work to one of the recent auctions approached me after the sale, somewhat bewildered because he believed his painting was unsold since the bidding did not reach his minimum, yet he heard someone near him say he had bought the painting. I was sure that the work had been sold because I heard the auctioneer call out a paddle number. I suggested that my friend check with the department, since sometimes the auctioneer will let a work go for less than the owner’s minimum because he knows that if you add up the selling comission (6 to 10%) and the buyer’s premium (15% on lots bringing $500,000 and 10% of the remainder) there is 20 to 25 percent commission to “play” with. He can decide to cut the house’s commission, pay the owner as if the work had been sold for the agreed minimum and still make some profit. This is usually done in close situations when the sale does not seem to be going well and the auctioneer knows that he has only one “live” buyer in the room. He can keep bidding against that person in behalf of the owner and risk the outcome that the bidder stops before the reserve is reached, or he can “fold his hand” when he gets near the reserve price and take a little less commission for the auction house.
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Why are you telling us all your secrets in a free newsletter?
In 26 years (13 at a prestigious New York auction house and 13 running a gallery) I have actually acquired a few more secrets than can be fit into a six page newsletter.
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Any other reason?
Yes. I think the more informed a collector is the better and I am happy to make my own experience available to those who seek my advice. Sometimes the best deal is at auction, sometimes it is at a gallery. Sometimes the best paintings go to auction, sometimes they are sold privately. An informed collector will check out the major auction houses, the reputable art fairs, and the galleries. We’re very patient. We can wait for you.