UNCOVERING THE SECRET WORLD OF ART AUCTIONS
Updated: Jul 28, 2020
World’s blood sport – Auctions. Wealthy collectors. Art speculators. Exhibitions. Galleries. Competition for the finest works in the market. The world of art has never been so accessible than it is today; in an age rife with technology! Annual art sales are at between 60 – 70 billion dollars a year and the transactions for the same happen in galleries, art fairs and online as well. Successful sales mean a boom in performance and adds to the ever-growing world of art. It is fun to watch but the prices elicit gasps and celebrity bidders usually stir up a storm. Although 20% of the total sales come from experienced bidders, they still find it intimidating.
High profile public events, where the price of the piece is determined by the highest bidder in front of the whole world, hence it is recommended to do your homework before you register to bid by looking up the
online catalogues published several weeks before the actual bids so that the aspiring bidders can look up about the piece thoroughly – from its images to price to the history, everything is there in these catalogues.
With tons of information available at your fingertips, it is very confusing to decide which piece is worth bidding on. Art, being not just an object of attraction but an emotionally charged narrative, changes your perception. You may like something in the catalogue but not when you see it in real life, hence it is suitable that you take help from a consultant/advisor if you are bidding for the first time, so that you bid on the right
pieces! Auction houses are still some of the best places to buy art and the competition in here is exciting, mysterious and seductive – all at once. In the earlier times paintings were purchased at prices around 24,000 Euros, which was a staggering price back then and only last year a new world record was set for a Leonardo Da Vinci painting which sold for a record $450 million in a bidding war.
Every piece of art is unique with respect to its rarity and scarcity in the market and their owner is the only person who can “read it” every single day! Van Gogh was prolific but when a 1932 Marie Therese portrait comes up in an auction, it will go to the highest bidder who will wake up to it everyday and “experience the emotional resonance of the master’s genius.” To be able to live this kind of dream is what motivates people to buy a rare piece of art. Hence, scan every piece of information you can get your hands on before you raise your paddle!
This multi – billion - dollar industry was not always like this! The process of selling your art was way different than it is now. In the earlier times, a painting was ordered to be made by patrons and then made to order and the patron specified how much he would pay, what materials would the painting be made of
and how long would it take to complete. Its advantage was that you just had to paint what you were ordered to and did not have to wait for it to be sold. Earlier the paintings were made with gold and other precious material making them very expensive. Today, a painting’s value depends on something very different; it is now all about the expression of the artist and the materials used don’t matter much! Picasso could have painted on a napkin and it would have been incredibly valuable just because it was by Picasso.
HERE ARE SOME IMPORTANT TERMS COMMONLY USED IN ART AUCTIONS
1. Appraisal -This is the approximate market value assigned to a particular lot by the auction house's specialists.
2. Auctioneer - The Master of Ceremony (MC); a showman or a woman who uses humor and drama so that they get high prices from the bidders. Each auctioneer has a signature style, which among the younger generation might feel like edgy and in – your – face.
3. Bid - the price a bidder is willing to pay for a particular work. It can be done by being at the auction personally, through phone or having a surrogate place it on your behalf.
4. Buyer's Premium - the surcharge added by the auction house to the price of the piece, it is usually between 20 and 30 percent.
5. Catalogue – the glossy brochure sent to the collectors and other interested bidders by the auction house which provides them with all the information required and to pump up the offers.
6. Chandelier Bid – A fake bid because of which the others may increase their bids. Also known as a ‘rafter bid’, this practice is frowned upon in the industry.
7. Consignor - The person, estate, or institution that put a specific artwork up for auction, oftentimes as a result of one of the "three D's": death, divorce, or debt.
8. Estimate – this is the estimate price that the auction house thinks a work can fetch. It is agreed upon in advance and is included in the catalogue as well. It includes a low as well as a high estimate. There are estimates for each individual work and estimates for the overall sale.
9. Guarantee – a particular amount of money that the auction house has to pay the consignor irrespective of the fact that their painting is sold or not.
10. Hammer - This is the auctioneer's Excalibur, it is like somewhat like a judge’s gavel and when the auctioneer brings it down (sometimes with a light tap), it means that a sale is made.
11. Hammer Price – the price of the winning bid when the gavel comes down. It does not include the buyer’s premium.
12. Paddle – “The snooty cousin of the ping pong paddle”, they are numbered paddles which indicate the prices. Some bidders may use a discreet signal which signals the auctioneer with a prearranged sign. It can be a simple nod to a complicated language to bidding expressions.
13. Reserve – this is the minimum price that a consignor allows the auction house to sell their artwork for. Hence, if the artwork does not get sold, it will be bought back in.
14. Seller's Commission – this is the price that the auction house takes from the consignor for his/her work. This fee can be waived or reduced in case the auctioneer is sure of landing the consignment.
15. Specialist - These are the on-staff connoisseurs who put together the auction, acquiring the works, assessing their value, and contextualizing them in the frame of art history for the catalogue. These people are specially and highly trained by experts in a particular field and then they spend their time jetting around the world to find the rare treasures one sees at auctions.