Liz Taylor's jewelry brought a pretty penny to Christie's, breaking records left and right earlier this week (and they continue until December 16th). Auctions are probably one of the most entertaining cultural past times I've ever taken part in. Not only is the excitement of seeing who's going to outbid who, scintillating, the people-watching is phenomenal. Auctions unlike purchasing items in a gallery or retail store, are meant to be the barometer of the market, a test of what's to come. Generally speaking, bidding is meant to be competitive and fall under prices paid in the retail market. Their are exceptions, of course. The first are items that have social and cultural importance such as Liz Taylor's belongings. It matters what the provenance is (the lineage of who has owned the item or work) and celebrities can bring top dollar depending on who owned it and/or who purchased it for them.
I've broken down the major parts of buying at auction and highlighted key terms in bold. If you have a question, feel free to email me.
Not every city will have a Christie's or Sotheby's but there will some form of auction in your area whether they have a brick and mortar location or are a seasonal pop-up event. You can get just about anything at auction but I'm going to speak solely about bidding for art. First of all, I suggest bringing a friend. If for nothing more than someone one to roll eyes with and make small hand gestures, it's a great social event and having someone to talk to about it later is priceless.
My first experience at an auction was ten years ago when I read about it in the paper. I drove to the Hilton, registered my credit card with a paddle number and foolishly won a carved, wood side table with slots for wine. It didn't matter that I didn't drink wine or that I hadn't inspected it closely. I had won it and the feeling was sublime - until I had to lug it out to the car myself. (This is where bringing a friend comes in handy). Had I inspected it more closely, I would have noticed that the dovetail joints had come apart on one of the lower legs. Normally, you could take a rubber mallet and pop it back in place but this wood was so warped from moisture damage that it would have been impossible. Lesson learned.
Here are the major steps for research prior to the auction.
1. Get a condition report
2. Inspect the item firsthand and/or attend the preview
3. Understand the estimate and nail down your financial limit including fees (shipping too)
4. Decide if you're going to bid through absentee bid, phone, online or be present in the room.
First and foremost, inspect the goods in your lot, the number assigned to your piece(s). Request a condition report. For art, this is common practice. No matter the price point, the piece should have been inspected by a specialist and a report, no matter how short, should have been produced. It will give you the current condition of the piece starting all the way from "excellent" to "good". Very rarely do reports tell you that it's a bad buy! If you're in the area and can do so, go to the preview and drink the champagne! Usually this will occur a few days before the auction and all the pieces will be available to see. Specialists should be on hand to answer any questions you may have.
The estimate that's included with the item means that's the fair range the house thinks it will sell for. A few words of caution, however when you're looking at the estimate. Sometimes, a reserve, a price that the seller has been promised a minimum on, has been worked into the price. If it doesn't hit this number, they don't have to sell it. As the buyer, you don't have the knowledge of a reserve but as you get more experienced at it, you might be able to gauge when a reserve has been set in place. This can account for what some may see as a high estimate from time to time. If an estimate seems low, the house may have set the number so that the seller will be tickled when it sells for many times more. This practice is not necessarily illegal but a nuanced practice that are unfair to both the seller and buyer.
Once you've decided which piece(s) you're going to bid on, read the fine print carefully. Every piece will have a buyer's fee or premium (or what my ex-employer called the "stiff" - great name). This is the amount that the auction house gets for brokering the sale. Most will have different price points at which the percentages will change. I've included Christie's buyer's premium list here as an example. As you can see, it's quite a consideration when bidding and many forget to include the "stiff." On top of this fee, consider the shipping fee which you should get an estimate on prior to bidding. Even if you purchase a $300 vase, the crate or Strongbox they use to ship it will most likely cost more than the item itself.
I've bid at auction in the room, on the phone and have even been on the other side taking bids over the phone for collectors during an art auction. It's an exhilarating experience and if you can, I recommend going to live auction at least once. That said, not all auctioneers are compelling to watch. They can have off days too where they hold the bidding too long if the prices aren't coming in well or the pieces aren't selling, in which case they'll refer to this as "bought in".
If you decide to do an absentee bid, you're going to fill out the form with your credit card or bank information and leave the maximum number you're willing to shell out for the piece. If you go with a phone bid, you'll have registered in advance and will receive a call about 4 to 5 lots before your piece. For an online bid, you're actively on the house's website and watching the bids in real time. And the golden experience of them all, is being in the room itself when the bidding is going on. Most will not have the excitement of an evening Contemporary sale at Sotheby's but it's still a great learning experience. You don't have to have a paddle to sit in unless it's a big sought-after ticket so go in and enjoy the people watching with a friend!
Later this week I'll go into the intricacies of how to bid with each method. Happy bidding and good luck!