Passing on your art collection: Sales through a public auction house

Posted on October 5, 2015 · Posted in Blog

Art auctionYou’re considering selling your art collection during your life or positioning it for sale after your death. In our last post, we discussed why and how you would sell through a dealer or gallery. In this post, we’ll look at selling through a public auction house. When is this an option and how does it work?

When to sell through a public auction house.
As explained in the last post, working with a gallery is often not an option if you have a diverse art collection with works by multiple artists. Galleries tend to specialize and often aren’t interested in artists they are not familiar with. Therefore for many collectors with an extensive collection, a public auction house may provide a better all in one process.

Additionally, there may be cost savings in working with an auction house as galleries sometimes have a higher per piece cost of sale. Of course, the type of work, the expected sales price, and the size of the collection are all factors in the seller’s ability to negotiate a lower cost of sale.

When not to sell through a public auction house.
The main difference between the gallery and auction house route is the size of the potential market. Typically, an auction house has a larger reach to potential customers, but a gallery may have a more direct link to the artists themselves and have access to private collectors who have shown interest in the pieces in the past. So it’s a tradeoff. Some artwork may do better being sold at auction, while other pieces would not.

An auction house may also decide the artwork is not a good fit. Just as with a gallery, an auction house may not be comfortable working with certain types of art. In that case, it might offer other solutions or suggest alternative places to offer the works.

Working with a public auction house.
To begin, the Executor (or owner) would contact a client specialist (or someone with a similar title) within the auction house to discuss the pieces he/she would like to put up for auction. This would be the contact person throughout the process.

Ideally, the art should already be cataloged including images of each piece as well as clear documentation establishing provenance.

Assuming the auction house is comfortable handling the artwork, the next step would be valuation of the pieces. The auction house would utilize the valuation as part of its proposal to the client. If owners are simply looking for a valuation and they aren’t sure they want to sell, the auction house can conduct a valuation for a minimal charge.

Ordinarily an auction house will not take on an all or nothing client. However, each client’s collection stands on its own. As part of the proposal, the house will describe the auction process and how the pieces will be presented along with a timetable when each of the pieces will be put up for auction. If it is a large collection then it will most likely be offered in stages so as not to flood a market and ensure a proper price is obtained. As part of this proposal, the house will provide its marketing plan, show a sample catalog, give an exhibition description, and in the case of a specialty item, offer to feature the piece if the client requests it. The proposal will also show comparisons to past sales as a reference and to give the client a sense of what to expect.

If parties reach agreement, then a consignment contract will be negotiated. The agreement will list the pieces, the proposed estimates, and the timing of the auctions. It will also address insurance and storage issues. Generally, insurance is covered by the owner, or the house will charge roughly 1% to 2% of the hammer price. Shipping is normally paid by the consigner/owner. However, everything is negotiable so get an expert to help you.

It’s good practice to evaluate multiple auction houses, and if possible, establish a relationship with the selected auction house prior to death or before a sale is going to be needed. This will help ease the process for the seller and provide a road map to the executor and heirs.

Other options for selling artwork.
Sales through a gallery or public auction house are not the only options. Other alternatives not discussed in these posts include selling directly to the public at art fairs or using online auction houses such as ArtBanc.

The important point is to look at all possible options. And regardless of what you decide, remember that the process is always easier when there is well-organized seller who has cataloged the pieces, documented good title, and who has a team of experts to provide advice and guidance throughout the sale process.

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