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How to Win Art Auctions: A Bullet-Proof Strategy for Beginners

By James Church on October 11, 2021

Reading Time: 5 minutes

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

Key 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!


How do art auctions work?

How to win art auctions requires some thoughtAuctions 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.

How to find art at auction?

“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:

Subscribe for mailing lists and catalogues

Dedicated sales occur each year for each category (e.g. American Folk Art).

Due diligence

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.

Auction information

The results of past auctions are public knowledge. Examine the descriptions, estimates and price to know what similar items changed hands for previously.

Opportunity cost

Buying one work of art may mean you cannot buy another, which you might prefer to own.

Where is the auction?

Remember transport, tax and fees will be in addition to your bid!

How to view art for auction?

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:

  • See and examine as many genuine examples as possible: This will give you a feel for the subject which no photograph can provide so that you can be informed when assessing art at auction.
  • Ask for the auctioneer’s ‘Condition Report’ to check for damage or flaws. Then visit in person to inspect the item. Ok, a trip across the country for a $10 milk jug is an unwise allocation of time and resource but if you are planning to bid for expensive items, this is a must!
  • The back of a work of art is often as revealing as the front. The author found a business card for the artist’s own art class on the back of a drawing.  The auction catalogue missed out this crucial detail!
  • Talk to the in-house specialists at the auction house.
  • Check through the auctioneer’s ‘terms & conditions’ (often bureaucratic but always essential!).

How to win art auctions?

“Never venture, never win!” Sun Tzu

How to win art auctions also involves the digital world!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:

Registration

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!

Bidding:

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:

In-person bidding

This is the authentic and traditional experience. Each bidder receives  a numbered ‘paddle’ to indicate a bid to the auctioneer. Anonymity is difficult!

Absentee bidding

This provides the least temptation to over-spend. The auctioneer will bid for you up to the fixed limit.

Telephone bidding

This is a convenient method but you should leave an “emergency bid” (see absentee bidding above) in case they cannot reach you by telephone.

Internet bidding

This method is normally free with the auctioneer’s own system but using third party platforms will incur additional costs.

After-Sale:

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 buyYou 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!

What are the hidden costs?

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!

Shipping

The auction house will provide a list of local shipping companies and you should obtain quotations before bidding to avoid surprises.

Tax

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.

Storage and display

Do you have somewhere to store or display your purchase? Are the conditions suitable for preserving your art?

Conclusion

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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James Church

James Church is a fourth year PhD student at Kingston University, London. His thesis examines the experience of five British and Irish artists who exhibited at the Annual Exhibitions of the Carnegie Institute, Pittsburgh, and their engagement with the art world of the United States of America, between 1910 and 1931. Previously, he worked as an architect, having studied architecture at the Bartlett School, UCL, and also studied towards a part-time MA in the History of Art at Birkbeck College, University of London, graduating in 2011.

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James Church

James Church is a fourth year PhD student at Kingston University, London. His thesis examines the experience of five British and Irish artists who exhibited at the Annual Exhibitions of the Carnegie Institute, Pittsburgh, and their engagement with the art world of the United States of America, between 1910 and 1931. Previously, he worked as an architect, having studied architecture at the Bartlett School, UCL, and also studied towards a part-time MA in the History of Art at Birkbeck College, University of London, graduating in 2011.

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