Category Archives: Auction Advice

Market Status: Time to Sell

Now that there is more time to consign (deadline is now August 12th), I asked Peter his thoughts on the current state of the market and recent consignments.

Peter Loughrey: So far the October 2010 Auction will include a large assortment of items in the $1,000 – 1,500 range, which will make for an exciting opportunity to buy.  Although the lower price range is almost full, we can still accept a few pieces in this range.

However, there is a strong market for high-end material in the $5,000 – $25,000 range, which is supported by motivated buyers at the upper end of the market, who have been using art as investment.  Many works of art in this price range are selling for as much or even higher than at the peak of the market in Spring 2008. In our last two auctions items in this price range have realized the strongest auction results in our 18-year history.

In the Los Angeles art market especially, top buyers feel the recession is over and are eager to buy quality works; however there is very little available to satisfy the demand.  If you regret not selling at the peak of the market, now is your second chance, don’t miss out again.

As for recent consignments, the past few days have been exciting for us. Three highlights include:

– Andy Warhol Campbell’s Soup screenprint

– David Hockney Swimming Pool lithograph

– Diego Giacometti Table

To take advantage of this market, please contact Peter, peter@lamodern, to submit images and/or descriptions of the material you wish to consign.

For further reading on the shift in the art market, check out this article by Kelly Crow from The Wall Street Journal, published August 4th.

How to Sell at Auction

What to expect when selling at auction according to LAMA’s Director Peter Loughrey:

Submitting Material for Possible Inclusion

Submitting your items is easy. A simple list will do, but sometimes we will need to see photographs. We can also simply make an appointment to come by and look at your items at your location. However, emailing a simple list or description gets the ball rolling.

Receiving the Auction Estimate

If you have an item we feel we can sell for you, we will then prepare a “pre-sale” auction estimate composed of a value range. Estimates in general have two purposes.   First, they are used to inform the seller.  Second, they are used to attract a potential buyer.  An aggressive or high estimate may make you, the seller, happy; but it may also turn off potential bidders.

I believe it is important for an auctioneer to give an estimate independently. A good auctioneer tends to have a confidence level on what he can achieve and he will give you an estimate he feels will best serve the item. Sometimes an aggressive estimate, but other times a conservative estimate is needed. Most auctioneers (LAMA included) base their estimates on relevant auction results; often the estimate is low in order to assure that bidders will become attracted to the work (it is not in anyone’s best interest to overestimate the work).   If the seller is satisfied with the estimate, then terms are usually negotiated based on, among other things, the value of the work.

Calculating Commission

The seller’s commission is based on, among other things, the value of the work. Most auction companies (LAMA included) will offer a lower commission on higher valued works. LAMA, however, charges a flat-fee, which includes services such as photography, cataloging, advertising, etc., and does not charge a commission if an item does not sell.

Last But Not Least

One important question to ask an auctioneer when selling at auction is, “Does this auction house own any of the other works in the auction?”. This is a subtle but important question to ask. If the auction house owns or has a financial interest in many works in the auction, there is a good chance that the auction company will be promoting those works instead of yours.

Advantages of Selling at Auction

Top three reasons to sell at auction according to Peter Loughrey:

Upside

Unlike selling at a fixed price, an auction has the unique ability to create a competitive environment, where there is no fixed limit to how high the value can be set on any individual item. As soon as you put a fixed price on something, someone invariably is going to offer you less. The unique aspect of an auction is that people are offering you more. Also, as soon as you set a price on an object you are limiting the result to that amount in the best case scenario. You have therefore eliminated any upside potential.

Power in Numbers

At a well publicized auction there will also be many other items like yours, which creates a powerful marketing tool to gather all interested parties together for one large event that offers a very large selection of items to choose from. It’s the easiest way for a collector to view the maximum amount of material to feel that they have made an informed decision.

Maximum Value

Because an auction company is selling hundreds of other items like yours, it does not need to charge as much commission as a retailer would. Everyone knows if you are selling more volume you can charge less. Most auction companies charge between 5% – 25% seller’s commission. Most dealers or retailers need to charge far more to cover their expenses. An auction company sells millions of dollars worth of material in one day, the best retailers sell as much in an entire year. Consignors therefore get the benefit of the large volume discount when costs are considered.

Thoughts on the May 23, 2010 Auction

It’s finally March and soon we are getting ready to close out the sale in preparation for photography in two weeks. Amidst the chaos at the warehouse with all the furniture and art flying in, I got a chance to take a moment to reflect on how the auction is shaping up and ask Peter a couple of questions.

What is the proportion of fine art to furniture?

Peter: For the first time the majority of the consignments is fine art.

What is an investment piece for a beginning collector to look out for?

Peter: We have a lot of small works on paper and prints in the sale under $5,000. One of my favorite areas in this auction would be the photographs. The Richard Avedon, 1971, Image of Warhol, estimate $3,000 – 5,000 will probably be a great long-term investment for a not a lot of money now.

Richard Avedon, 1971, Image of Warhol, estimate $3,000 – 5,000

Is there anything you are anticipating to go up on the auction block?

Peter: We have several works by artists we have never sold before- Thomas Hart Benton and Paul Cadmus. It will be interesting to see what the reaction to this material is with our regular buyers.

In terms of the market have you seen a shift in what people want to sell?

Peter: I am starting to get offered a lot more works from the 70s and 80s in both furniture and fine art. Also, in this auction we have the largest selection of recent contemporary art, so it seems more people are starting to sell recent works. In the past the average age of modern and contemporary artwork that was offered to us was about 25 years old. This time we have a lot of works that are less than five years old.

What is your favorite piece you have gotten in so far?

Peter: John McLaughlin, “Untitled (#33)”, 1958. Even though it’s a small work, it has the most beautiful proportions of any paintings by this artist that I have seen in the market in some time. In addition, the condition of the work is pristine, which is very rare for McLaughlin’s work.

John McLaughlin, “Untitled (#33)”, 1958, estimate $20,000 - 30,000

Auction Advice for the Beginning Design Collector

Recently someone asked me, ‘I am very interested in design and I really want to start collecting. What should I be looking for, especially when buying through auction?” So, I asked Peter his thoughts, well because he’s been in the business since 1989 and has almost seen it all.

Peter :”On any given sale, I would advise a beginning collector to be most cautious of condition first. Also to build a healthy, trustful relationship with any auctioneer you are doing business with.”

I also asked, “Is it better to buy investment pieces or functional pieces?”

Peter: “The best advice with collectors is to buy what they like. However, investors should know going into collecting their own primary incentives- you have to be honest with yourself with respect to the reason you are entering into this market. Is it because it is ‘hot’? Is it because you have seen someone you admire buying this type of work, or is it inherently attractive? It’s okay to buy solely for investment, but that will usually  set completely different parameters than those of a collector who simply wants to decorate their primary residence or someone who wants to decorate a vacation home. Advice for beginning collectors needs to be tailored to their reason for entering the market.”

For more information on Peter Loughrey, check out his bio on the LAMA website.