The experience of buying art and collectibles, and auctions in general, are two things I get questions about often. Today, I thought it would be fun to have a true expert here to give us an intro to this often so-called world of mystery. Michael Jefferson is a senior specialist with Wright auction house in Chicago and I’m thrilled to have him here today to share his expert advice. Enjoy! xo, Tobi
To the uninitiated, buying at auction can be a daunting process. However, knowing a few simple rules, you can easily begin to buy with ease and success at auctions.
First of all, what is an auction? An auction can take many forms, but the simplest way to describe it is: A public sale of goods or property that is sold to the highest bidder. Auctions can range from high-end sales of paintings that reach millions of dollars, to estate auctions, where one dollar will buy you something of considerable quality. At Wright, we focus on mid-century design and post-war and contemporary art that falls in the upper middle range of the spectrum.
Auction houses regularly hold auctions and it pays to research who sells the goods you wish to collect. It is recommended that you sign up with auction houses to receive notices of sales and utilize their websites to view the goods that are to be sold. In our area of the market, dealing in design that is of merit and quality, it really pays to pick up the phone and speak with a specialist. I often form very close relationships with my clients and advise them on goods in our auctions, as well as those items they come across elsewhere. In my view, I want my collectors to obtain the best things they can find…I hope they buy most of them from our auction, but providing expert knowledge can go a long way to ensuring clients return to me when adding to their collections. The advice auction house experts provide can help clarify the condition and quality of items you have an interest in. Furthermore, experts can help assess the true value of an item by citing precedents for similar items that have sold. This type of information is free and invaluable to collectors because you can make mistakes buying uninformed!
The Basics: Auction houses collect items over the course of several months and create a catalog of goods to be sold on a specific date. At Wright we typically hold sales once every four or five weeks, but a search on the web can find auctions happening just about every day of the year. Websites like LiveAuctioneers.com host thousands of auctions online around the world all year long, and it’s a good source for people to explore what is being sold elsewhere.
Each item in a sale has a lot number which simplifies the identification of an item, each item is subsequently called a “lot.” In addition, each item is given a full description which includes the designer name, the manufacturer, year produced, dimensions and an estimated price. Auctions start low and end high, whereas in a retail situation, you start high and discount down to come to an agreed price. Auctions are conducted in lot order, and nearly without a break, until all the items in an auction have been offered and sold.
To bid, you have to contact the auction house and register. Registration is the simple process of providing your name, billing address and contact information. In return the auction house will give you a bidder number for the specific auction you wish to participate in. There are many ways to participate as a bidder. The traditional way is to be in the audience and bid live during the auction. With the ever shrinking world we live in, however, it is very easy to participate in auctions anywhere in the world without being in the auction room. One way is to leave an absentee bid, which is the maximum amount you agree to pay for a specific lot. Absentee bids are executed on your behalf by the auction house. The auction house is obliged with an absentee bid to purchase the lot for the lowest possible price. Sometimes you will purchase a piece well below your absentee bid amount, sometimes it lands right at the top of your bid, and other times you will be the underbidder, someone whose highest bid has been topped by another bidder. The best way to bid, if you cannot be there in person, is to register to be a phone bidder. With this, you are called by an auction house employee during the auction and that representative will bid with you live for your lots of interest. Phone bidding allows you to gauge the level of interest in a lot and to decide in the moment what you wish to bid on so you can bid a little more if necessary to win a lot. Finally there is internet bidding. Technology has gotten quite good and websites such as Live Auctioneers allow an ever greater pool of bidders to bid on auctions remotely.
Auctions can be high energy affairs and lots can be sold as quickly as one per minute. It is this energy that can be really captivating and also dangerous as you are swept into the moment. Auctions are very good ways to determine the fair market price for an item, and it is based on the number of ready bidders at any given moment. Many collectors prefer to buy at auction, since competition is the reflection of what something is really worth in the open market, whereas a retail situation is a price set by the dealer.
Another important rule to remember is that there are fees when purchasing from auction. Auction houses make their money adding a “buyer’s premium” to the hammer price at which a lot sells. Often this premium can range from 10% to 25% and should be taken into consideration when submitting a bid amount. For instance, Wright charges a 25% buyer’s premium therefore; if you win a lot at a hammer price of $1,000 your invoice will reflect the hammer price plus the buyer’s premium which would make it $1,250. It is easy to get swept up in the excitement that auctions create – it is fun to win a lot after some competition and often it can produce a bit of euphoria. Be sure to set limits for yourself, however, as there are always more auctions and more goods to be purchased later.
By starting with just one auction, you can easily become a veteran of the auction process. Auctions are a great way to purchase items for your collection or home at fair prices, or to obtain very rare and collectible works that will prove to be a good investment. In general, the auction process is quite simple, democratic and ultimately a great deal of fun.
Wright’s next auction will be on September 27, 2012. Living Contemporary is one of our most anticipated auctions of the year, featuring a unique mix of functional and non-functional design from the 20th and 21st centuries. Jump in at www.wright20.com!
I hope this advice provided some insight in the world of auctions!
-Michael
A bit more about Wright…
Wright is a Chicago-based auction house specializing in 20th and 21st century art and design. Wright has pioneered whole fields of collecting and transformed the market for modern design. Wright’s auction schedule can be viewed at www.wright20.com. In addition to auctions, Wright features Wright Now, an online marketplace of stylish and significant works available for immediate sale. Visit Wright Now at www.wright-now.com.
[images: Wright and Google Images]
