Use Independent No-Conflict Appraisers
When Pricing or Valuing Art
Q: I own a painting that my children don't want, so I've decided to sell it. I bought it about 20 years ago. I emailed one of the galleries that represents the artist and requested an appraisal. According to them, it's worth a lot more than I paid for it. I asked whether they were interested in selling it for me. They said they only represent the artist's current work and don't get involved with resales. I'm not sure whether I can sell it for as much as the gallery appraised it for, but can you tell me how and where I can get a good price? I've enclosed a copy of their appraisal.
A: Don't expect to sell your art for anywhere near what the gallery calls its "appraised value." First of all, this so-called appraisal is from a gallery that represents the artist, not an independent appraiser or similar professional with no conflict of interest, so it's not really an appraisal at all. It's more like a statement of what it's current retail asking price might be if it was hanging on their walls today... except they're not interested in hanging it on their walls today. So let's try to figure out what's really going on here and how much the painting is really worth on the open market to you as a private party wanting to sell, not as a gallery that represents the artist.
The gallery's best interest is to "appraise" art and artists they represent as high as possible because the higher the price, the better they look. While big numbers may work nicely for the gallery, they do absolutely nothing for you except maybe give you delusionary ideas about the liquid value of your art. The truth is that this gallery is one of a handful of places on the planet where the artist's work can sell for the kind of money they're telling you it's worth. Now you would think that if the art was indeed liquid at this price, they might have an interest in either buying it back or reselling it on consignment, but they don't. That should tell you something.
What we're dealing with in a situation like this is kind of like a monopoly where a handful of galleries exclusively represent and control his prices at the retail level. They decide what the art sells for at their galleries and "appraise" it at whatever the current retail prices that they've set happen to be (but remember-- this is not technically appraising). The artist's market and prices are created, maintained and controlled entirely in-house, that is, in the rarified settings of the representing galleries (as opposed to from private sellers like you). These galleries apparently don't concern themselves with whatever happens in the broader marketplace, including with resales like yours. They're in business to sell the artist's current work and appear to have little or no interest in what happens after they sell it.
The fact that this gallery, and likely the other galleries that represent the artist as well, do not handle resales typically means they have all the art they need, which they usually get from the artist. It also means that the overall market for the artist is not strong enough to warrant their buying art back or taking it on consignment from the outside. In other words, supply is likely greater than demand and that outside of the representing galleries, you're dealing with a buyer's market.
The little bit of good news is that secondary market resales for this artist do take place, but at prices well below what the galleries retail the art for. A non-conflicted outside appraiser would have advised you of this. Expect to sell your art for only about 20-30% of the value it's been "appraised" at by the gallery. Regardless of what art you collect, if you're a collector who's concerned about what kind of value you're getting for your money when you buy, research secondary market selling prices before you buy rather than after. Knowing and following retail prices over time is definitely recommended, but keep track of the secondary market selling prices too, because those are much more reflective of what you might be able to sell for at any given point in time. All experienced collectors do this.
In addition to doing your own price research, especially online, questions money-conscious buyers should ask when deciding whether or not to buy include the following: Does a healthy secondary market exist outside of those retail galleries that represent an artist and, if so, where is it and how much does art like whatever you're thinking about buying tend to resell for? Does similar art sell or get offered for sale at auctions (either online or bricks and mortar), on secondary market websites or at other galleries in addition to those that represent the artist? If yes, how much does it sell for? And remember to differentiate between art that has actually sold, and art that's being offered for sale but has not yet sold aka retail asking prices. You want actual sales data whenever possible. Asking prices on art that has not yet sold can at times be way higher than the art is realistically worth or what it ultimately sells for.
As for the gallery selling the art, do they get all of their art directly from the artist or do they also handle resales from third parties, secondary market dealers, or from other outside sources? If they do resell, then that speaks to the current strength of the market for the artist's work. Be aware that some galleries may dance around on price issues and say whatever they feel is necessary to sell you art. You want clear direct explanations and actual market data as opposed to convoluted commentaries you can't understand.
When you're not getting clear and understandable answers and information that you can corroborate, perhaps think about doing your shopping elsewhere. Or if you really love the art, research the artist online and see who's selling or reselling. Or try asking the gallery once again-- maybe wait a few days, give them a call, and directly ask whether they resell art by the artist, whether they know anyone who resells art by the artist, or what someone should do if they have an artwork they'd like to resell. A fact of the art business is that occasionally (fortunately not often) blunt direct questions like this are necessary to get at the truth.
If you're still not sure about the answers you're getting to your secondary market questions, check to see how other galleries perceive the artist's market or ask around online. Maybe even speak with an independent art consultant or neutral appraiser or two to get realistic no-conflict overviews of the artist's market. You can also get a pretty good idea of the strength of an artist's market based on the amount of biographical and price-related information you find online-- and the variety of sources you can find that information on (or lack thereof). You want to see a broad cross section of websites and venues that provide information about the artist, or even better yet, buy and sell art by the artist. You don't want to see only one or two or three self-interested gallery websites that represent and sell art by the artist, and nothing more.
In case you need an appraisal or are interested in consulting on any aspect of art you either already own or are considering buying, you're more than welcome to call me at 415.931.7875 or email firstname.lastname@example.org.
(art by Mokha Laget)
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