Experience with auction houses, part1
Updated: Jul 2, 2018
Experience with auction houses... An auction house wants to sell your art, no matter what. To do so, they want the lowest reserve price possible, even if the reserve price is negotiable experience will help the seller to obtain the highest possible reserve price. The auction houses are charging minimum 20 % of the sales price to the seller and 20 % to the buyer, yes that's correct a minimum of 40 % which can go up to 50% + in major auction houses like Sotheby's and Christie's !!! For high value paintings the % are decreasing but still, no wonder that you have so many auction houses in Good shape or Bad shape as I will explain later. If you have a high end value painting ( more than 10 M $ ) you can negotiate the sellers premium with the auction house you consider. Also with art value above the 1 M $ you can ask to receive an advance on the expected sale price.. All this will happen easily if you deal with an experienced art expert. You have good and bad auction houses ! Bad auction houses are the ones who can't pay a seller for the sold item... Weird? yes it's weird, since they have only their functioning money to invest in a sale...publicity, catalogues etc .. And it happens more often than what we think.
I personally had to deal with an auction from the East coast a couple years ago, I don't want to mention their name since they are starting all over recently after having been one of the oldest auction houses in the US. I was a regular buyer and seller at their auction house, until this auction where I had for 150K $ items sold and could not receive my money... Of course sometimes you have bad customers, who are not paying their debt to the auction house and it becomes very difficult for an auction house to pay the seller since they didn't receive their money.
This happens, but it's often an internal problem to the auction house. Too high reserve prices, too much communication publicity, not enough quality merchandise etc. I did wait almost 7 months to be paid but I was finally paid.. When you have experienced it, you know what to do before you buy or sell in an auction house. You need to have your home work made. Recently an auction house in Belgium, 2 month before Xmas, made a lot publicity, fancy articles in the newspapers, announcing a prestige end of the year sale, and they were still accepting high value consignments a couple days before the actual auction day. This auction house existed exactly 1 year, and attracted a lot of buyers and sellers, also online.
Xmas auction was an enormous success with exceptional furniture, fine art, books, jewelry. The auction house announced that the payments to the sellers will occur after new year 2014. After new year, the auction house had disappeared; all items were gone since the buyers came to pick up their items they paid for to the auction house, but money, auctioneer, employees, desks, auction room everything was empty!
I was told that this auctioneer did the same thing a couple times at the 4 corners in France. We had the same sad story a couple years ago in Scottsdale AZ ... one day all was gone. The reputation of an auction house has to be verified, even if this is one of the oldest auction house in the country.. always make your home work, and who better than a fine art expert can do this.