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The Art of Bidding: A Beginner's Guide to Buying Art at Auction

Sept. 15th, 2024

The Art of Bidding: A Beginner's Guide to Buying Art at Auction
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The Diverse World of Auctions

Before we dive into the specifics of art auctions, it's important to note that the auction world is wonderfully diverse. While we're focusing on fine art in this guide, auction houses like Christie's, Sotheby's, and Phillips deal with a wide range of collectibles and valuable items.

From fine wines that make sommeliers swoon to sparkling jewelry that would make a magpie jealous, from rare watches that could make time stand still to classic cars that are more sculpture than vehicle – each category comes with its own set of rules and considerations.

Here's the kicker: auction conditions can vary significantly depending on what's being sold. Bidding on a case of vintage Bordeaux might have different requirements than bidding on a Picasso. For example:

  • Fine Wine: Auctions might require proof of proper storage facilities or have specific shipping regulations.
  • Jewelry and Watches: These auctions often involve certificates of authenticity and may have stricter bidder verification processes due to the high value and portability of the items.
  • Classic Cars: You might need to arrange specialized shipping, and there could be additional documentation required for cross-border sales.

So, while we'll be focusing on art in this guide, remember that if you venture into other auction categories, you'll want to familiarize yourself with their specific rules and requirements.

Have you ever dreamed of owning a piece of art that speaks to your soul? Perhaps you've imagined yourself in a grand auction room, paddle in hand, ready to bid on a masterpiece. Or maybe you've simply wondered what it would be like to participate in the exciting world of art auctions. Well, my friend, you're in for a treat! Let's embark on a journey through the enchanting (and sometimes bewildering) world of art auctions together.

Why Buy Art at Auction?

First things first: why should you consider buying art at auction? Well, why not? Auctions offer a unique opportunity to acquire pieces that might otherwise be out of reach. They're not just for the uber-wealthy or seasoned collectors – they're for anyone with a passion for art and a desire to own something truly special.

Think about it: where else can you find such a diverse range of artworks, from emerging artists to established masters, all under one roof (or website)? It's like a treasure hunt, except the treasure is hanging on the wall, and you get to take it home!

The Big Three: Christie's, Sotheby's, and Phillips

When it comes to art auctions, three names stand out: Christie's, Sotheby's, and Phillips.

Christie's, founded in 1766, is like that distinguished professor who's seen it all but still gets excited about new discoveries. Sotheby's, established in 1744, is the cool aunt who knows all the latest trends but also appreciates the classics. And Phillips, the youngest of the trio (founded in 1796, practically a baby in auction house years), is like that hip gallery owner who's always on the cutting edge.

Now, you might be thinking, "That's all well and good, but how do I actually bid at these places?" Fear not, intrepid art lover! We're about to break it down for you, step by step.

Step 1: Creating Your Account – Your Passport to the Art World

Before you can start bidding on that exquisite still life or mind-bending abstract piece, you'll need to create an account with your chosen auction house. Think of it as your passport to the art world – you wouldn't try to enter a foreign country without proper documentation, would you?

Each auction house has its own process, but they all involve some level of identity verification. It's like they're saying, "We need to make sure you're not an international art thief or money launderer – nothing personal!"

For Christie's, Sotheby's, and Phillips, you'll typically need to provide:

  • A government-issued ID (passport or driver's license)
  • Proof of address (utility bill, bank statement)
  • Sometimes, financial information

Pro tip: Don't wait until the last minute to set up your account. Give yourself plenty of time before the auction you're interested in. It's like preparing for a first date – you don't want to be scrambling at the eleventh hour!

Step 2: Registering for the Auction – Getting Your Ticket to the Show

Once you have your account, you'll need to register for specific auctions. This is where the auction houses start to show their individual personalities.

Christie's and Sotheby's usually require you to register for each auction separately. It's like RSVPing to a party – you're letting them know you'll be there, virtually or in person.

Phillips, on the other hand, is a bit more laid-back for their online auctions. Once you have an account, you're generally good to go. It's more of an open-house vibe.

Remember, though, that policies can change faster than art trends. Always check the auction house's website for the most up-to-date information. It's like checking the weather before a picnic – better safe than sorry!

Step 3: Bidding Options – Choose Your Own Adventure

Now we're getting to the exciting part – how you'll actually place your bids! Each auction house offers a variety of options, so you can choose the method that suits your style.

In-Person Bidding

Ah, the classic paddle raise. There's nothing quite like the thrill of being in the auction room, surrounded by other art enthusiasts, with your heart racing as you lift that paddle. Christie's, Sotheby's, and Phillips all offer this option for their live auctions.

But what if you're more of an introvert? Or what if you're in your pajamas and don't feel like putting on real pants? Don't worry, there are options for you too!

Online Bidding

Welcome to the 21st century, where you can bid on million-dollar artworks from the comfort of your couch. All three auction houses offer online bidding platforms that let you participate in live auctions in real-time. It's like playing a very expensive video game, except the prize is actual art.

Telephone Bidding

For those who prefer a more personal touch, telephone bidding is an option at Christie's and Sotheby's. A representative will call you during the auction and relay your bids. It's like having your own personal art concierge!

Absentee Bidding

If you're busy during the auction (or if you don't trust yourself not to get carried away in the heat of the moment), you can place an absentee bid. You tell the auction house the maximum amount you're willing to pay, and they'll bid on your behalf up to that limit. It's like setting a max bid on eBay, but for fancy art.

Remember, the availability of these options can vary depending on the specific auction. Always check with the auction house beforehand. It's like confirming your restaurant reservation – better to double-check than show up and find out they gave your table away!

Step 4: Understanding Prices – The Art of the Deal

Now, let's talk money. When you're bidding at an auction, there are two important numbers to keep in mind: the hammer price and the buyer's premium.

The hammer price is the final bid amount – the price at which the auctioneer's hammer falls. But wait, there's more! The buyer's premium is an additional fee that the auction house charges on top of the hammer price.

Here's a general idea of what you might expect:

  • Christie's: 26% on the first million, 21% up to $6 million, 15% after that
  • Sotheby's (as of May 20, 2024 for New York):
    • 20% on the hammer price up to and including $6,000,000
    • 10% on any amount above $6,000,000
  • Phillips: 27% on the first million, 21% up to $6 million, 14.5% after that

It's crucial to note that these rates can vary depending on the location (based on local currency thresholds), type of auction, and date. Always check the current rates before bidding. It's like reading the fine print on a contract – boring, but necessary!

Step 5: Payment and Currency – Show Me the Money!

Congratulations! You've won the bidding war and that beautiful piece of art is yours. Now comes the fun part – paying for it. (Okay, maybe not so fun, but definitely necessary.)

Each auction house has its own payment methods and policies. Generally, you can expect to pay by wire transfer or credit card. Some houses, like Christie's, even accept PayPal for certain amounts.

Remember, the full amount (hammer price + buyer's premium + taxes + shipping) is usually due pretty quickly after the auction ends. It's not like buying a car where you can finance it over five years (although Sotheby's does offer some financing options – who knew?).

As for currency, most major auction houses deal in multiple currencies, but it's always best to check. Phillips, for example, requires hammer prices to be paid in USD for their online auctions.

Step 6: Shipping and Collection – Bringing Your Treasure Home

You've bought it, you've paid for it – now how do you get it? All three auction houses offer shipping services, but you can also arrange your own shipping or collect your purchase in person.

If you're having the auction house handle shipping, remember that international shipments might take longer due to customs. It's like waiting for a package from that obscure online store – patience is key!

If you're collecting in person, don't dawdle. Christie's and Sotheby's may start charging storage fees if you don't pick up your art within a certain timeframe. It's like leaving your car in a parking garage – the longer you wait, the more it costs!

Final Thoughts: Your Art Collecting Journey Begins

And there you have it – your guide to navigating the world of art auctions! Remember, this is just the beginning. The art world is vast and ever-changing, much like art itself.

Don't be intimidated by the big names or the big price tags. Art auctions aren't just for the ultra-wealthy or the experts. They're for anyone who loves art and wants to bring a piece of that beauty into their lives.

Maybe you'll start small, with a print or a photograph. Or maybe you'll go big and bid on that sculpture you've been dreaming about. Whatever your path, remember that collecting art is a journey, not a destination.

So, are you ready to raise that paddle (real or virtual) and start your art collecting adventure? The next masterpiece for your collection could be just a bid away!

Remember, the world of art auctions is dynamic, with policies and procedures that can change. This is especially true when you consider the wide range of items that can be auctioned, from fine art to wine, jewelry to classic cars. Each category may have its own specific rules and requirements. To ensure you have the most current information for your area of interest, always refer to the official websites of the auction houses:

These resources will provide you with the latest details on account creation, bidding processes, payment methods, and more. Happy bidding, and may the art be with you!

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