Will your Items Sell Best at Auction?
Many people assume that the best way to sell their art, antiques, collectibles, and home contents is via auction. The truth is: sometimes it is & sometimes it isn’t.
Auction isn’t for everyone or every object. It could be exciting or discouraging. To the uninitiated and inexperienced, the auction sale methodology can be fraught with potential land mines.
Let’s Assume You Find an Auction House Interested
When consigning to auction, the first step is to find the most appropriate house that will agree to take your personal property. It can be a difficult task, so we will discuss that process in depth in a future blog. For now, let’s assume you successfully find an auction house that appears well equipped to sell your personal property. You then need to agree on the terms & conditions of the sale before signing the contract to do business. Auction house fees can sometimes be steep. In addition to taking a commission, there may also be fees for photography, cataloging, insurance, packing and moving. The proper marketing, including the cataloging and photographing of your collection is critical to finding the right potential buyers. Some of these fees are based on the desirability of the consignment. Not every auction wants everything. In fact, most do not want to sell household items. For any collection, negotiations are best done by a broker or appraiser who has a relationship with auction houses. Just because you engage an auction house, doesn’t always mean that they will offer you what’s best for you, take care of everything for you, or offer you all the services you need.
What Will Your Items Sell for at Auction?
At a public auction, anything can happen. Even excellent property that is in the right auction and appropriately promoted can go unsold. On the flip side, occasionally we see modest goods sell for high prices in an unexpected bidding war. Experts may have reasonable expectations on the outcome, but no one can predict results of an auction before the gavel slams and the transaction is completed by payment in full.
Is the Auction Market Even the Best Place for Your Collection?
Auction houses can be a wonderful venue for your items. As we said above, sometimes they can be costly, especially when you are selling modest items. The biggest worry for consigners should be this:
What happens if something doesn’t sell?
What happens if everything doesn’t sell? The seller must not only immediately pick up the unsold items (to avoid paying “storage” costs), but pay the auction house for all related fees incurred. The auction house will charge you, regardless of results. Sometimes there are “post-auction” sales, but you can expect buyers to make rock bottom offers, since they just saw the pieces go unsold.
There may be other marketplaces to consider that are appropriate and profitable.
Auction sales results are reported public transactions. While the seller and buyer may remain anonymous at auction, the sale price does not. Some buyers treasure their privacy, thus 60% of all art sales do not take place in the public eye. These buyers will often pay a premium for desirable objects not openly available. Gallerists specialize in such private transactions. Getting a secretive seller together with backdoor buyer requires significant research and market knowledge. The trick is knowing the players. An insightful appraiser can also find you the potential buyer who will pay equal to or more than the auction sales estimate. Private sale can often be more profitable to the seller by avoiding the risk of “burning” and saving on some fees. (See How Not To Get Burned At Auction)
When you have a house full of property to sell, an Estate Sale can be a compelling sales methodology. The effect of seeing an object in a staged home is powerful. Nosy neighbors, dealers and collectors all want to unearth a treasure. They also know that their competitors will be in the home as well, so sales tend to occur fast. Visitors usually leave with multiple (unintended) purchases. Those spontaneous decisions could be worth a couple of dollars or thousands of dollars. Again, buyers may pay a premium to privately buy the best items in the home. Sales that take place here also fly under the public radar.
So how do you know what to do?
You may be thinking, I’ll go to the auction house first and hear what they say. Auction houses do have an educated staff that can advise you. However, auction houses are consignment businesses. They make the bulk of their money from consignments, not consultations. Is it possible that they will paint the sunniest picture possible to land the contract? In whose best interest will they act? A third-party, independent appraiser can guide you through the sales processes with your best interests in mind. Auction consignment is only one trick of the trade. Who will tell you all your other options?
The art market is like the Wild West.
There are few rules or regulations in the art and personal property field. If you want to sell your items, consult a trustworthy, professional appraiser familiar with all marketplaces to help you find just where your property belongs.
To Discuss Selling Your Home Contents, Call the Magnussons at: 973-425-1550
Co-Authors: Lynn Magnusson, ASA, AAA and Becky Lipnick, Communications Coordinator