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October 18, 2006

Good Will Art Hunting... Advice From Lisa Hunter Part 3

Freeadvice_1 So now that we're all filling out our Maidstone Club membership applications.. Here's some more helpful advice from The Intrepid Art Collector.

MAO Question #3: A gallery owner whom I’m friends with has offered to get any work from other dealers I’d want. Is it best to work with only one dealer and have them buy the work for me.. or should I go directly to the dealers who represent the artists? Does this end up costing us more or less?

Lisa Hunter Answer : Cost isn’t – or shouldn’t be – the main issue here. The best thing an ambitious collector can do is forge a relationship with a good dealer. Dealers sell more than art -- they also sell their expertise, reputation, their connections, and their "eye." If this dealer has access to work you can't get yourself, then it's worth paying a premium.

Many buyers seem to resent the dealer’s commission, but I think it’s sort of like paying an attorney to review a contract. You want the person’s years of expertise. Why shouldn’t you be willing to pay for it?

MAO Question #4 : When I first started collecting I had a very limited art budget... so I bought some works I liked; they are nice, but very inexpensive, more common pieces.  Like photo prints that were in editions of 500 or more.  I've since increased my art collecting budget, and now I'm running out of money wall space.  I don’t need the cash, but it seems silly to pay for storage for these inexpensive works.  Even though I still like them, I was thinking of selling some just to make room. What do you suggest I do with these?  What are the best places to sell them, donate them to, or should I just give or lend them to friends?

Lisa Hunter Answer : The definition of a "collector" -- as opposed to a mere buyer -- is someone who keeps acquiring even after all the wall space is full. If you still like the pieces, maybe you should consider rotating them. Install shallow shelves and prop your photos there for an ever-changing display. (From a conservation standpoint, it’s probably good for photos to spend some time in dark storage anyway.) You could also store them in old-fashioned portfolios that you and your guests can flip through – not everything has to be on the walls.

If you’re determined to sell, most auction houses have divisions for less-expensive works. You could also approach the dealer who sold the prints to you to see if he/she wants to buy them back or sell them on consignment.

If you decide to donate the prints, I’d recommend offering them to a charity auction rather than a museum; a museum probably won’t be interested in inexpensive multiples.

And if you decide to give them to friends, I’ll send you my address! J

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Hey Mao,

How about you two talking a little more about the aftermarket. I know we all intend on holding on to these treasures forever, but what if you or your "estate" needs to liquidate some of your works? What should you expect? What are your options?

I also came across this article which, although outdated still has some great insight and is interesting to read. The best part is when this guy rails "against the price gouging aspect of a 17.5 percent buyer’s penalty. Christie’s exhibited a great deal of arrogance and contempt for buyers assuming they would roll over and willingly accept this new increase. Christie’s was right. There were no protests, no “Don’t Buy At Christie’s Campaigns.” Christie’s and Sotheby’s know that in the end buyers’ greed is the controlling influence. Buyers will pay anything to get what they want."

This guys upset about 17.5%!!! Last year I could have sworn Phillips premium was 20%??? this year it's at 22.5% - You would think that with prices reaching sky high they would benefit accordingly as it's on a percentage scale. Instead they need a bigger cut of even bigger numbers!!! Smells like uncontrolled greed to me and you better believe I figure out my maximum bid beforehand incl. premium so it only hurts the seller or hammer price.

I was recently trying to negotiate with someone about buying a print in the aftermarket from someone. They bought it in the spring at auction for a total price (hammer+premium) of $5000 but now need to sell. But they were barely willing to budge on that price to resell to me. But the funny thing is, whoever sold that print at the auction only took home an estimated $3600 after seller fees. Why should this guy get $5000? Why should running a print through an auction house inflate the cost of a 5K print by 1500k? Seems exhorbitant. I've also seen some places charge $10000 for the same print another place charges $4000. This market seems so crazy and arbitrary sometimes.

Here's the article:
http://www.harryrinker.com/pricegouge.html

Billbob-- with prints, condition may be responsible for the price differences. Most print collectors will pass on a damaged piece if they think they can get a pristine one elsewhere. So maybe the $4,000 one is faded or has water damage, and no serious collectors will touch it.

Hey BillBob..
I agree.. these auction houses are charging way too much.. for poor/no service. I don't understand why everyone has just accepted the 20% premium without any pushback.

Even Swann Galleries raised their premiums to 20% from 15% this year.

But until there's a cheaper alternative out there.. there's really no choice for collectors.

Almost No one is going to buy a high end work of art on Ebay!

Although the Phillips auctions can be seen on Ebay.... I called another gallery this past week and they were in a panic b/c they were told a few of their artist's work were on Ebay. They had no idea Phillips posted directly to Ebay. And it's very difficult to ascertain that from just searching an artists name. So, who knows what the future holds for fine art and Ebay....

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