You’ve amassed an art collection that you want to pass on, but unfortunately you don’t have heirs to take it or they are not the best choice to maintain it. As we discussed in an earlier post, one option is selling the collection. You can sell it during your lifetime or lay a foundation for the sale after your death. This can be done in various ways in your financial and estate planning. However, whether you are looking to sell a collection now or you want to help others understand what selling the collection will entail in the future, below are some key points you should know.

There are 2 main avenues for a sale – selling through a dealer/gallery and selling through a public auction house. These aren’t the only ways, but they are the most common among highly valued collections.

In this post, we’ll look at selling through a dealer or gallery. When is this an option and how does it work?

When to sell through a dealer/gallery.
Selling through a gallery works when the right artwork is matched with the right gallery. In most cases, galleries are only interested in working with collections they are familiar with and only interested in artwork and artists they either represent now, had represented previously or would be considered a hot commodity in an area in which they have an expertise.

For the seller, working with a gallery that knows the individual artists and can market them is very beneficial. A big advantage to the seller is that the gallery has access to collectors who would be interested in buying. The gallery would have a list of private collectors who have expressed interest in the artist in the past and it would be able to negotiate directly with such private collectors of behalf of the estate. A knowledgeable gallery is more likely to find a buyer quickly and at a good price.

Selling through a gallery is also advantageous when an estate is looking for anonymity. A seller who wishes to keep the selling of the artwork private won’t be able to do that working through a public auction house.

When not to sell through a dealer/gallery.
Galleries are not usually in a position to take on an entire estate collection unless they are familiar with all the pieces. Although working in the secondary market, a gallery would not be as effective as an auction house at evaluating pieces with which it is inexperienced. Typically, galleries have a more limited staff making it difficult for it to allocate resources towards evaluating a diverse art collection. Therefore, even if there are pieces in the collection the gallery is interested in, it is not likely to take an all or nothing proposition (i.e. taking artwork it wants along with artwork it doesn’t).

Working with a dealer/gallery.
If you want to work with a gallery, ideally you should work with one that currently represents the particular artists or was the gallery that originally sold the artwork. This creates loyalty and trust and also gives provenance and a trail that shows the authenticity of the artwork.

If you don’t already have a relationship with an appropriate gallery, start one. If there is a diverse collection, you may need several outlets to sell everything and therefore you may need to establish a relationship with each individual gallery.

Assuming a gallery is interested in your collection, it could be the outright purchaser of the art. However, in most cases it would take the artwork on consignment. In that case, there would be a standard consignment agreement that would need to be negotiated which would include the normal components (shipping, insurance, storage, commission, timeframe, etc.). This step should always be done with the assistance of highly skilled and experienced advisors who have negotiated such contracts in the past.

In our next post, we will discuss how and why to sell your artwork through a public auction house.

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