How to win art auctions is a rewarding journey! Acquiring art by bidding at an auction is an opportunity for you to acquire varied art and collectibles, potentially at far lower prices than through a private gallery or dealer. However, knowledge and preparation are essential to make profitable choices. This beginner's guide aims to introduce you to this fascinating and exciting world.
Auctions are prominent venues for most collecting categories so it is best to establish your aims and parameters at the outset. This will help with how to win art auctions. Deciding upon what category (e.g. eighteenth-century French portraits or contemporary Japanese video art) is the first step, then establish where such items might be found.
"In the midst of chaos, there is also opportunity." Sun Tzu
Takeaways
Discover precisely how auctions work
Learn how to buy pinpoint bargains and avoid costly rookie mistakes
Your step-by-step guide to help you avoid over-spending!
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Auctions are a traditional way to sell goods and property publicly. Numerous "lots" (a single item or groups of items) are included and the auctioneer acts on behalf of each individual "consignor" (the current owner). The lots will be offered sequentially by the auctioneer for bidding. In traditional "English" auctions, the bids rise in set increments until a final, highest bid is made. At this time, the auctioneer gives "fair warning" (a last call) after which the fall of the auctioneer's gavel (hammer) transfers ownership (subject to payment).
Auction houses are paid by both the seller and buyer. The auctioneer deducts a 'commission' from the 'hammer price' before payment is made to the seller. Conversely, the auctioneer also adds a "buyer's premium" to the 'hammer price' to form the total paid by the purchaser. These fees are usually each around 15-25% of the hammer price.
"Patience is a virtue, possess it if you can!" [Anonymous]
An auction occurs at a set time and, despite the advantages of the internet, at a set place. To bid, you have to know of the auction, have searched through the lots and have the ready cash at your disposal. To stay informed:
Dedicated sales occur each year for each category (e.g. American Folk Art).
From the information provided by the auctioneer, does the item look genuine and of sufficient quality or interest? Ask for additional photographs before making a special trip in person.
The results of past auctions are public knowledge. Examine the descriptions, estimates and price to know what similar items changed hands for previously.
Buying one work of art may mean you cannot buy another, which you might prefer to own.
Remember transport, tax and fees will be in addition to your bid!
Become as knowledgeable as possible on your specialist collecting category to make informed decisions on art investing. Inexperienced collectors or those making high-value purchases should seek advice from suitably qualified conservators or art advisors. Quality and condition are key determining factors in value.
Top tips for viewing art at auction:
"Never venture, never win!" Sun Tzu
The major evening sales of fine art at Sotheby's, Christie's and Bonhams sell the finest examples, by the most famous names at the most fabulous prices! They are the art-world equivalent to blue-chip stocks. However, small auctions may provide investors with more opportunity in areas like investing in wine. Sometimes, the most profitable investments are sometimes found in overlooked, unloved and unfashionable categories or even areas. Whisky investing and fine wine investing has come to the fore recently. This is not an absolute rule as, over time, the finest examples of any category, style or artist will tend to hold their value best when compared to average examples.
The key stages are as follows:
Anti-money laundering regulations and the need for bids to be binding require the auction houses to request identification. Register well-before the auction to avoid missing out!
The psychology of bidding and "auction fever" are well-known. Bid only what you can afford! In the excitement of the auction, it is easy to go over your original intention. How to win art auctions is an 'art' not a 'science'! Art advisor Mary Rozell advises:
'Prudent collectors should decide on their own personal bidding limit before an auction starts and be disciplined about sticking to it.'
Methods of bidding at auction:
This is the authentic and traditional experience. Each bidder receives a numbered 'paddle' to indicate a bid to the auctioneer. Anonymity is difficult!
This provides the least temptation to over-spend. The auctioneer will bid for you up to the fixed limit.
This is a convenient method but you should leave an "emergency bid" (see absentee bidding above) in case they cannot reach you by telephone.
This method is normally free with the auctioneer's own system but using third party platforms will incur additional costs.
A "reserve" (minimum price) prevents valuable items being sold for too little money. The lot will be "passed" or "bought in" (remain unsold) if no sufficient bids are received. Some will ask: "What was wrong with it?!" However, you can make an "after-sale offer" to the auction house if you still wish to buy. You may be able to buy the lot for less than the reserve and many passed lots are sold this way.
The successful bidder will then pay and the price includes the" buyer's premium" and certain taxes!
You should consider how to transport your purchase and where you will keep the art you just won at auction. A life-size marble elephant for £10 may seem a bargain but transport across the country is expensive!
The auction house will provide a list of local shipping companies and you should obtain quotations before bidding to avoid surprises.
Taxes may be levied by customs (e.g. 5% VAT for original art coming in to the UK) for international purchases, so check your local regulations.
Do you have somewhere to store or display your purchase? Are the conditions suitable for preserving your art?
We hope to have given you a brief overview of the process of how to win art auctions and some questions to address. A useful beginner's guide is Mary Rozell's The Art Collector's Handbook. Knowledge is key at all steps of the process and always remember to factor in fees, commissions, taxes and transport into your plans. It is best to buy art that you enjoy and appreciate, first and foremost!
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