Buying or Selling at Art Auctions
Buying or selling at an art auction can be exciting and challenging. Aboriginal art auctions have made the headlines for the last decade, with international auction houses such as Sotheby’s, Christies, and Bonhams and Butterfields each hosting major sales of premium works. Australia-based Lawson-Menzies has also conducted annual sales, resulting in increasing demand for high-quality work. Some of these sales are highly-publicized international events, with glamorous invitation-only previews not only in Australia but also in New York, Los Angeles, London, or Paris.
Whether you are interested in buying or selling, it pays to understand the basic procedures used by auction houses – and to do your homework about the specific auction house whose sales interest you and the lots or artworks that you want to acquire.
Buying at Auction:
Before you raise your paddle or call in your bid, there are some important things to know.
1. Review the buyer’s guide. The auction house’s hardcopy or online catalogue includes a guide to how it conducts its business. Catalogues may be purchased by subscription or by single copy and are usually published three-four weeks before the auction. The auction house may also have an email alert list so that you can register your particular interests and receive advance information about items being listed in upcoming sales.
2. Review the catalogue. The catalogue normally includes a photo and description of the item with information about the artist, the work’s provenance or history of ownership, size, medium, condition, and estimated value based on the current market. For exceptional pieces, there may be extensive information about the artist or the individual work of art. The estimated selling price is based on a comparison of prices realized for similar items in recent sales or auctions, but it is no guarantee of the final price. In some cases, bidding far exceeds the estimates; in others, art works don’t draw bids at even the lowest end of the estimated range. You should research the artist and prices realized in previous auctions or sales for similar works. Much of this information may be available online.
3. Register. To bid in person, you need to register with the auction house and obtain a numbered paddle before the auction begins. You’ll need proof of identity, such as a driver’s license, and you may need to provide a bank reference or credit card. To place a bid, raise your paddle until the auctioneer acknowledges you. You should decide in advance the maximum amount you are willing to pay and continue bidding until you win the item or reach your limit and drop out.
4. Bidding absentee or by telephone. You may bid absentee by completing a form in the catalogue or as a download. Absentee bids are executed by the auction house on your behalf, up to the lowest increment that exceeds competing bids and meets or exceeds the reserve price (the lowest price the seller will accept). In the event of identical bids, the one submitted first takes precedence. To bid by telephone, you must also register with the auction house. A representative will then contact you from the salesroom prior to the lot(s) you specified going on the block, and will accept your bids by phone. You should plan to register at least 24 hours in advance of the sale to ensure that a phone line is reserved for you.
When determining your top price, remember to calculate and add in the Buyer’s Premium or auction house commission, which can be as much as 20% or more of the hammer or sale price, as well as any sales tax which may be collected. Each auction house has policies regarding how quickly buyers must pay and pick up their items, or arrange for shipping, after the sale.
Selling at Auction
1. Have your art work appraised. Selling a work of art begins with an appraisal by the specialists at the auction house, usually involving a physical examination of the work and any supporting documentation. In some cases, auction houses will appraise your item using high-quality photographs along with documents. Their appraisal will be based on their best estimate of the actual price someone will be willing to pay for the item, which may vary greatly from insurance appraisals.
2. Decide whether to sell. Based on the valuation, you and the auction house determine whether it is appropriate for sale in their auction. If the house agrees, you are responsible for arranging packing, shipping, and insurance for the work in transit.
3. Execute the contract. The auction house will prepare a seller’s contract, including both the reserve price and the commission structure. The reserve price is a confidential minimum selling price to which you and the auction house agree prior to the sale. Any final bid below that price will not be accepted.
4. Receive your payment. The auction house will take its commission (the buyer’s premium added to the final hammer or bid price) plus fees for expenses, such as catalogue production, insurance, etc., prior to paying you, the seller. Shortly after the sale, you will receive a listing of the final hammer price for the item(s) you consigned to the auction house. You will then receive payment within a specified period after the auction house receives payment from the buyer.
Jill Milroy, Dean of Indigenous Studies,
University of Western Australia, in the Foreword to the catalogue for
Dreaming Their Way: Australian Aboriginal Women
the National Museum of Women in the Arts and the Hood Museum of Art,
© Booker•Lowe Gallery 2014, 4623 Feagan Street, Houston, Texas 77007 USA
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