Buying art: how to avoid being duped
Auction records are the best source of information on the art market because they are the only records that are transparent and were done in public. That is the view of Miles Barth, senior specialist, photographs for online art resource and auctioneer artnet.
“artnet does not get involved with any gallery sales records,” he says. “Gallery sales are not made public, and if you ask a gallery owner what they sold a piece for you don’t know if they are telling the absolute truth. At least if we’re using auction records, those records were set in a public environment without any constraint on the buyer or the seller.”
He says that art buyers should be wary of unscrupulous galleries that try to guide them to buy a particular artist’s work in order to inflate the prices.
Even the auction world is not safe from manipulation. Some dealers will put an artist’s work up for auction and then buy it back at a price that exceeds the auction house’s estimates, creating a public record that the artist’s work fetched a record price.
This means that even auction records need to be taken with a pinch of salt – especially when you factor in the tactic used by some auctioneers of placing members of the auction house’s staff in the audience at an auction in order to look out for anyone who seems to be bidding enthusiastically.
“If they see someone who is so motivated that they are bidding very rapidly right after the previous bid, they will then make what is known as chandelier bids, in order to keep raising the price,” says Barth.
“It is one of many strategies and techniques that auction houses, galleries and dealers can use to raise the price.”
Ironically, just because one piece sells at a high price, this does not mean that subsequent pieces will fetch the same inflated price – in fact, it can mean that the market suddenly gets flooded with similar pieces as people who have been watching the auction results seek to cash in on the price hike.
“If a piece suddenly goes up by $10,000 in value from the last time it was sold, my phone starts to ring,” says Barth. “People are calling because they have that very item, and they want me to sell it for them because they just saw that the piece had increased in value.
“The problem with that is it doesn’t mean that every single one of those items will sell at the same increase as that piece that just sold for an enormous amount of money.”
One reason for this could be that the high price was artificially inflated; another might be that the piece sold to the one person who was determined to buy it at any price, but that there is nobody else in the market with a similar appetite. Therefore one sudden jump in price is not a guarantee that a similar piece is likely to fetch the same figure.
In order to buy wisely, Barth has a simple piece of advice: keep track of the prices your chosen artist is fetching over a period of time using resources such as artnets massive database of sales records.
“It’s all about doing your homework,” he says.