Auctioning 101: Do plenty of research, read the fine print & follow the money to maximise profit
These five sharp tips put together by leading auction house Bonhams for prospective bidders and sellers.
By Masoom Gupte, ET Bureau |
iStock
Whether you are in the market to buy or sell luxury collectables, you could use these five sharp tips put together by leading auction house Bonhams for prospective bidders and sellers. The tips are included in the Knight Frank 2020 Wealth Report, bringing global perspective on prime property and investment.
‘Authenticity matters’
Tip one: “Contemporary works offer the most transparent provenance chain, with recent original bills of sale and blockchain technology providing certification from the artist. With older works, more time-consuming – and sometimes expensive – “homework” may be needed,” writes Harvey Cammell, global director of valuations, trusts & estates, Bonhams for the report. With older objects, documentation can get tricky. So more information you can amass, relating to previous appearances at auctions, and in galleries and exhibitions, the better.
‘Read the small print’
The art world is becoming an increasingly regulated place, with different rules and rates relating to the sale of fine art. Globally, buyers and sellers should make sure they are aware of current regulations covering everything from the sale and movement of items. Cammell writes, “Many UK art collections will find themselves caught by the forthcoming UK Ivory Act, which effectively bans the sale or export of the majority of items made from or containing more than 10% ivory.”
‘Follow the money’
“Art speculation” has matured into “art investment” as collectors and family offices increasingly see art as a working part of their wealth portfolio. The monetisation of art is big business: banks offer specialist loans against art; hedge funds and dealers place irrevocable bids at auction from clients speculating on lots outperforming their estimates; and brokers advise their clients on buying art for investment,” according to Cammell. Money flows fastest in those areas with the highest “supply” and turnover: contemporary art, jewellery, cars, wine, whisky and watches. Such collections should be valued regularly for insurance and tax planning purposes.
‘Timing is everything’
Here’s a tip specifically for sellers. “Auctioneers try as far as possible to curate their sales to avoid too many similar items overwhelming demand on the day. If you are selling, it’s worth discussing with the auctioneer the timing of the sale and what other lots are included, and confirming the marketing plan devised to sell your item. Specific sale categories, whether that be Asian art, Contemporary or Impressionists tend to be held during certain weeks of the year when the market converges in one of the big centres (London, New York or Hong Kong),” writes Cammell. For sellers that means ensuring the auction house is doing its utmost to make your property stand out, while for buyers it's an opportunity to compare the offerings on the market at that point in time. It’s a win-win for both.
‘Provenance is golden’
This is the gold standard for any serious collector. If you can join all the dots from creation to current ownership, you have the art market equivalent of a gilt asset. “Furthermore, one only has to look at a “big name” auction, from aristocrats to rock stars, to see that the intangible lustre associated with provenance provides a very tangible financial boost to the hammer price. It’s as true today as it was when our business was first established in the 18th century that large, dedicated single-owner sales from historic properties still draw the biggest crowds and, invariably, the most expansive bidding,” writes Cammell in conclusion.
‘Authenticity matters’
Tip one: “Contemporary works offer the most transparent provenance chain, with recent original bills of sale and blockchain technology providing certification from the artist. With older works, more time-consuming – and sometimes expensive – “homework” may be needed,” writes Harvey Cammell, global director of valuations, trusts & estates, Bonhams for the report. With older objects, documentation can get tricky. So more information you can amass, relating to previous appearances at auctions, and in galleries and exhibitions, the better.
‘Read the small print’
The art world is becoming an increasingly regulated place, with different rules and rates relating to the sale of fine art. Globally, buyers and sellers should make sure they are aware of current regulations covering everything from the sale and movement of items. Cammell writes, “Many UK art collections will find themselves caught by the forthcoming UK Ivory Act, which effectively bans the sale or export of the majority of items made from or containing more than 10% ivory.”
‘Follow the money’
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“Art speculation” has matured into “art investment” as collectors and family offices increasingly see art as a working part of their wealth portfolio. The monetisation of art is big business: banks offer specialist loans against art; hedge funds and dealers place irrevocable bids at auction from clients speculating on lots outperforming their estimates; and brokers advise their clients on buying art for investment,” according to Cammell. Money flows fastest in those areas with the highest “supply” and turnover: contemporary art, jewellery, cars, wine, whisky and watches. Such collections should be valued regularly for insurance and tax planning purposes.
‘Timing is everything’
Here’s a tip specifically for sellers. “Auctioneers try as far as possible to curate their sales to avoid too many similar items overwhelming demand on the day. If you are selling, it’s worth discussing with the auctioneer the timing of the sale and what other lots are included, and confirming the marketing plan devised to sell your item. Specific sale categories, whether that be Asian art, Contemporary or Impressionists tend to be held during certain weeks of the year when the market converges in one of the big centres (London, New York or Hong Kong),” writes Cammell. For sellers that means ensuring the auction house is doing its utmost to make your property stand out, while for buyers it's an opportunity to compare the offerings on the market at that point in time. It’s a win-win for both.
‘Provenance is golden’
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This is the gold standard for any serious collector. If you can join all the dots from creation to current ownership, you have the art market equivalent of a gilt asset. “Furthermore, one only has to look at a “big name” auction, from aristocrats to rock stars, to see that the intangible lustre associated with provenance provides a very tangible financial boost to the hammer price. It’s as true today as it was when our business was first established in the 18th century that large, dedicated single-owner sales from historic properties still draw the biggest crowds and, invariably, the most expansive bidding,” writes Cammell in conclusion.
The auctions for the thirteenth edition of the Indian Premier League (IPL) took place in Kolkata on Thursday. The event was attended by the owners and the coaches of the eight franchises and a whopping Rs 140.30 crore was spent. The thrilling auction saw intense bidding wars between the owners of the franchises as each one of them tried their best to clinch as many good players as possible. Here are the highlights of the auction.
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