The recession is driving many art sellers underground. 

Instead of relying on the more lucrative option of a public auction, many collectors are increasingly resorting to private art sales in the current economy, according to the New York Times. 

There are several reasons for this. Some sellers are afraid of alerting their friends that they need money. Others might be concerned that if a work is bought in at auction, as has happened to several high-profile lots in recent sales, the market will treat it as damaged goods.

A further disincentive to auctioning works is the high fees houses such as Sotheby’s and Christie’s charge for these sales. The buyer’s premium charged by the two houses — 25 percent of the first $50,000, 20 percent of the next $50,000 to $1 million, and 12 percent of the rest — is significantly higher than the 5 to 10 percent commission charged by the same house’s private sales divisions.

The final reason to avoid auctions is the plunging value of art. Six months ago, Sotheby’s Impressionist and modern art sale raked in $223.8 million; its May 5 sale in the same category is expected to garner just $81.5 million. It’s the same story at Christie’s, where last November’s Imp-mod sale earned $146.7 million, compared to the $94.9 million expected from the upcoming auction on May 6.

A major exception to the trend of avoiding auctions is estate sales. Estates continue to go to auction because executors have a fiduciary responsibility and prices are rarely challenged after public sales.