Where to buy fine art to make a good investment part 1
Updated: Jul 2, 2018
Since I started to appraise artworks for customers in the USA, some 20 years ago, often I was consulted by customers who requested to know the value for an artwork bought in a gallery 20-30 years before. Often, they were disappointed when I announced to them the value of their artwork as of today. Sometimes the actual value is 1/3 of what they paid 30 years ago. Is investing in fine art not a good business? Of course it is a very good investment when you follow basic rules. Why do you need to avoid galleries if you want to make a major investment, Picasso, Chagall, Warhol, etc ? A gallery has often very expensive functioning costs: -rent of a space which is usually in an area of very high standing, -employees to make the gallery functioning -member of organizations like Artnet.com, etc A gallery owner who invests in a painting or in an artist doesn't know when his investment will sell, and if it will be profitable, sometimes he may have his investment blocked for ever. The same for an artist he exhibits in his gallery, he usually charges the artist 50 % of the sale price of a painting, but he has to invest in exhibition catalogues, vernissage, commercials on radio, articles in magazines etc. In conclusion, it's always the customer who will pay the bills for the gallery owner. This is one of the reason why art bought in a gallery is rarely a good investment at short time.
Of course for upcoming artists a gallery or auction houses ( Arcadia sales Christie's- Discovery auctions from several important auction houses : Doyle NY - Yvey Selkirk Saint Louis - LAMA - Los Angeles) are most interesting places to buy.
Galleries will disappear in the future , just like the little stores disappeared to make space for big chains of warehouses. The most important fine art brokers have no longer a gallery, they operate from their own house, loft, condo etc.
Why is it wise to buy from them? You will not pay all the costs you will have to pay to a gallery owner: no employees, no expensive space rentals, no expensive catalogues or commercials in magazines like Architectural Digest ( $ 10,000.00 a page), Art News, Rob Report etc . Of course you will need to trust your broker. A serious broker will always give all the documentation for an artwork, including the certificate of authenticity delivered by the sole recognized expert for that particular artist , but also made recently. An expert may be recognized at one time, but may be contested another time and other experts may be in charge. The certificate of authenticity will be not older than 6 months. Besides the certificate, the broker will provide you with a complete documentation about the artwork, including the provenance, the bibliography of the artist, the references of the artwork in older auction sales, private sales, references to the "catalogue raisonne" and a fair market value of the artwork.
A good broker
- has at least 10-15 years experience of the fine art market,
- has a degree in fine art.
A broker will show references of his work and will introduce you to his clients. A good broker is often recommended by one of his clients.
So as in real estate, many people think that it is easy to be a broker in fine art, and brokers appearing all over the world willing to make a fast buck. Good brokers are very discreet people which is a major quality for a fine art broker.
A Picasso that will cost you 10 M $ with a broker, the same painting will cost you at least 15 M $ in a gallery. Also if you want to sell a Picasso don't forget that auction houses charging premium costs. They are variable but always very pricey. They charge premium costs to the buyer as well.
A good broker will show you several possibilities depending on the fine art you have.