Ask ArtInfo: Auctions 101

Auctions 101

Photo © Patrick McMullan Co.

Robert Mnuchin, Chairman of C & M Arts, says bargains can be had by making offers after the auction ends on "bought in" works

Photo © Patrick McMullan Co.

Abigail Asher with Barbara Guggenheim, (center) her art advisory business partner, and television news anchor person, Felicia Taylor

Send a letter to the Editor

Save to Del.icio.us Digg this

I've wanted to bid on art at auctions for quite some time now, but I’ve never done so because, frankly, I'm a bit intimidated and confused by the process. Can you tell me what's actually involved? What do I need to know to get started? If I dare to make the auction leap, is there any advice you can offer on making the process as painless and profitable as possible?

Sincerely,
Lost Without a Paddle, Princeton, N.J., July 2006

Well Lost Without a Paddle, you will be relieved to know you're not alone in your mystification about the world of art auctions. Hollywood often represents the salesroom as an elite secret society—complete with its own set of cryptic sign language—that could have you buying a million-dollar Picasso just by scratching your nose.

But after talking to some of the industry's top auction houses and leading art advisors and dealers, we were assured that neophytes need not be intimidated by the auction process—or worried that they’ll make a wallet-draining or embarrassing gaffe.

"Some people think it's like a cattle auction, where things go so fast that you don't know what's happening," said Heather Johnson, a senior vice president at Christie's and the regional director for the auction house in the U.S. "But it's actually much easier than people think."

Still, while no one with a passion for collecting should hesitate to attend auctions, there is plenty for newcomers to consider. Here are five basic steps to help you get started.

Step 1: Registration and Credit Check

Before being able to bid at an auction, you’ll need to register. At a minimum, you’ll be asked to provide personal contact information. Then, depending on the type of auction—and the size of the estimates involved—you’ll often be asked to provide some kind of evidence of your financial standing: a simple bank reference, for example, "just to prove someone has the money to pay for something," said Johnson.

But, as you might expect, if you’re planning to participate at a major, top-tier event—such as at Christie’s Modern and Impressionist sales, where prices often soar into the eight figures—the pre-auction vetting could be bumped up to a full credit check.

Step 2: Where to Bid

In terms of how to participate, there are now four primary ways to bid at auction: in person, by proxy, over the phone and via the Internet.

For one’s first auction, the consensus advice is to be there in person. "For the new collector, I advise nothing more than being at the auction in person," said Nicholas Lowry, president of New York-based Swann Galleries. “You should be there in the room to truly experience the excitement."

The pre-auction registration period to bid in person varies between houses; it's 48 hours prior at Christie’s, a half-hour at Swann.

If you're not able to attend the auction, though, you can leave an absentee bid with the house, and the auctioneer will bid on your behalf. "You say: 'The highest amount I want to pay is $4,000.' But if the last bid in the room is $1,000, you could get the work for $1,000," Johnson explained.

Of the last two bidding methods, by phone and Internet, Lowry considers phone bidding to be the better of the two because it provides "some of the thrill of the auction.”

(But Web-savvy bidders should note that a newly launched feature on the Christie's Web site, “Christie's LIVE,” aims to revolutionize auctions by combining an online bidding tool with the latest in streaming video and audio capability—immersing virtual participants in the salesroom excitement.)

Step 3: Do Your Homework

Abigail Asher, partner at the art advisory firm Guggenheim, Asher Associates, cautioned that the sale estimates given by the auction houses in their catalogs (posted online weeks before a sale) shouldn't be relied on as always being an accurate reflection of a work’s worth. Potential bidders should do their own homework to try to determine a its true value.

The best ways to do so are to shop the commercial gallery market for similar works; consult an art advisor; or research an artist’s pricing history via an online database or with a print reference such as Hislop’s Art Sales Index or Gordon’s Art Reference (both of which are published by LTB Media, ArtInfo’s parent company.)