Art Values - How to Value Art
How Much is My Art Worth?
Q: I need to know how much my art is worth. Can you help? It's supposed to be valuable according the gallery I bought it from, but I'm having lots of trouble selling it for anywhere near the price that they say it's worth. Here's what's happened so far...
I bought a limited edition print at a gallery for $3500 in 2003. At the time, they told me that it had a retail value of $5600. I contacted them recently and asked about the current price, they gave me an updated valuation for $7300, and now I want to sell it. First, I offered it to the gallery, but they told me they already have several in stock and don't need any more at the moment. I took out several online ads and listed it for sale on one art resale website, but nobody responded. I also tried to sell it at an online auction, but the high bid was only $900. What do you recommend? I want $5000 for it.
A: This is a rather extreme example of how large the difference can sometimes be between retail gallery or primary market prices and prices that private sellers like yourself might hope to sell for on secondary or resale markets. It's also a perfect opportunity to talk about how art prices work. Unfortunately, you won't be able to sell for $5000 or even anywhere near that, at least at the moment. This particular print is relatively common in the marketplace right now and not in great demand, but things can always change. Regardless of value though, it's a really nice image and that's the important part.
If it's any consolation, you're not the only one who finds out the hard way that you can't necessarily sell your art for retail gallery prices-- in spite of the values the gallery has given (and continues to give) you. Many people who buy art at retail galleries don't understand that much about how the art market works, and many dealers who sell art are not all that interested in explaining it to them. If you want to know what your art is realistically worth on resale markets, you might consider getting it appraised here. In the meantime, here's an explanation how art values generally work in the real world of buying and selling art...
Briefly, the art market is made up of two distinct segments, retail or primary markets and resale or secondary markets. The retail or primary market consists of art sold by dealers, galleries, and other art business professionals at retail prices out of retail venues. The secondary market consists of all art that is being resold by parties other than the original retail dealers at places other than galleries, including auctions (online and bricks & mortar), art websites, estate sales, online classified ads, flea markets, art wholesalers, and so on. Retail galleries can also sell secondary market art, but again, they can usually sell it for retail prices whereas other private sellers generally can't. For anyone who is not a retail gallery, secondary market prices are generally considered to be more in the vicinity of wholesale than retail and in the large majority of cases tend to be somewhat less than retail prices, and occasionally way less as in the case of your print. However, a modest percentage of art does increase in value over time and can be sold for more on secondary markets than was originally paid for it. In exceptional cases, it can be sold for way more.
People who own art also need to understand how secondary market art prices are determined (aka the difference between how much a gallery tells you your art is worth on primary markets and how much it is realistically worth on the open market). Approximating art prices is a science, not an exact one, but one based on concrete observations of how much similar works of art have sold for in the past or are currently being offered for in the present. Without going into detail, a realistic appraised value is not what someone thinks art is worth or how much you see it priced at retail galleries before it sells, nor is it necessarily what someone casually tells you it's worth. A realistic appraised value is based largely on what the art has already sold for or typically sells for not only at retail galleries, but everywhere-- at auctions, secondary market websites, and related venues-- and it's based on actual price information about sales that have already taken place. To repeat: An appraised value is not how much someone wants to sell art for or how much they think it's worth or what its selling price is at an expensive gallery; it's how much the art actually sells for everywhere, at galleries as well as at various circumstances outside of galleries.
If you want to know how much your art is worth because you want to sell it and you're interested in having it appraised on order to find that value out, you have to tell the appraiser that those are your intentions. The appraiser will know that you're not a gallery, that you can't expect to get a retail primary market gallery price for the art, and will instead give you a realistic value of what you can expect to sell for based on current secondary market selling prices. In other words, the appraiser will not give you a value equal to what the art is priced for as it hangs unsold on an expensive art gallery wall, but instead give you a value based on what comparable works of art currently sell for outside of retail settings-- at auctions, at fixed-price secondary market websites, and so on.
The best way to get an accurate value for purposes of reselling your art is to use a neutral appraiser with no conflicts of interest with respect to either the artist or to any galleries selling the art. You used the gallery that sold you your print to price it for you, and they're about as far from a neutral no-conflict party as you can get. They want people to believe that the art they sell is worth as much as possible, so naturally they're going to "appraise" it as high as possible-- and often without any justification for doing so other than that's what they price it at. That's not an appraisal; it's merely a statement of their current retail asking price.
To repeat, the so-called "appraisal" they gave you is not really an appraisal at all, but rather the current primary market retail asking price of the print at their gallery. It has no relevance to you, a private party, or what you can reasonably expect to sell your print for in a private sale on the secondary market. Furthermore, it may not even have relevance to what the gallery sells the print for. If a customer offers $5000 for their $7300 print, for example, and the gallery accepts that offer, then the print certainly isn't worth $7300. Remember how they sold you yours for $3500 and then turned around and gave you a retail value of $5600? If it was worth $5600, they would have held firm at that price and not given you any discount.
As mentioned above, your print is relatively common in the marketplace right now and currently sells at auction for between $800 and $1000, or about as much as the high bid that you received when you put it up for sale at the online auction. Fixed-price secondary market websites and secondary market dealers tend to list it higher, in the $1200-$2800 range, but keep in mind that those are asking prices, and sellers may be willing to take cash offers that are lower. Bottom line: If you don't need the money, hold onto your print and continue to enjoy it; if you need the money now and have to sell, take the $900 or perhaps try to get a little more and be done with it. The good news is that it will likely not go any lower in value and at some point will probably start going back up.
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