The Auction Experience

Part I: Preliminaries

My Uncle Lou loved to play the horses, so whenever he came to New York he'd call my father, saying “Johnny, pick me up and we'll go and buy some oats at Aqueduct!” In auctions as in horse races, the greener the student, the higher the “tuition”. Uncle Lou was joking – he was a very good handicapper, and for his part, my father wisely never strayed from the two-dollar window.

Participating in a live auction is enjoyable and can, at times, be exciting. But the reason that you're there in the first place – winning the lots that will enhance your collection or, if you are a dealer like me, strengthen the quality of your inventory - demands thorough preparation and discipline, the key predictors of success and satisfaction. The important point is to recognize and learn from your mistakes, because it's inevitable that you'll “buy some oats” along the way.

There are several ways to directly participate in an auction. In my opinion, being there is best, not least because of the sense of excitement that precedes auction itself, but also because you'll get to observe the complex interactions that make the event a study in social Darwinism. Bidding on the phone provides the immediacy of participation absent the emotional and experiential fringe benefits. On-line bidding, which has become more prevalent in recent years, usually provides an audio / video link to the auction proceedings. Rremember, however, that audio / video feed often lags behind the real-time proceedings. You can also submit advance written bids by e-mail or by fax.

In certain situations, you may want to bid indirectly through a dealer acting on your behalf. The dealer must know your bid limit, of course. The surrogate provides you with anonymity and a dispassionate, professional approach to the coming auction proceedings. This is probably best when the object of your heart's desire is sure to be costly and the target of intense competition.

The direct methods have one requirement in common: to participate in the auction, you must agree to abide by the the auctioneer's terms and conditions. When you register with the auctioneer and agree to these terms and conditions, you become party to a binding, legally enforceable contract. Auctioneers generally include this information in their printed auction catalogs, as well as on line at their websites. I am telling you because if you didn't already know this, now you do. Ignorance is no excuse.

Some quiet evening, sit down and carefully read the Conditions of Sale. Then read the Limited Warranty. Finally, read all of the advisory language. Re-read it until you clearly understand what is being said and, most importantly, what it means to you as a prospective buyer. If you are new to auctions, this effort will pay great dividends and help you to avoid the costly mistakes so often born of ignorance.

There is no need to be intimidated by auctions and auctioneers. Auctioneers are neither enemies nor adversaries. Their role is to provide a straightforward, transparent environment for the transfer of ownership of desirable objects from a willing seller to a willing buyer. Your adversary is the competing bidder. Your only prospective enemy is the person who greets you in the mirror each morning, and then only when you have failed to thoroughly prepare for the auction and maintain bidding discipline.

While you must qualify to participate in an auction, you are under no compulsion to bid. But if you are the high bidder at the fall of the hammer, you are now the owner of the lot with responsibilities to fulfill before your can actually possess it. If you have executed your bidding strategy properly, you will have paid no more for an auction lot than it is worth and that you can afford, and your purchase will be an occasion for happiness. There are, however, a number of reasons why your joy in victory can be greatly diminished, and I will discuss them in my next installment.


Part II: Print Values – An Equation In Many Variables

The satisfaction derived from a winning bid would be seriously blunted if you have paid too much at the fall of the hammer. I say this with some authority because, in the early stages of my involvement on the bidding side of auctions, I frequently allowed enthusiasm fueled by adrenaline to gain the upper hand. I was more naive then, almost entirely unaware of the breadth and depth of my ignorance. As a novice collector and bidder, the relatively inexpensive lots that I sought ultimately went for sums that never caused undue distress. For this I thank my parents, who were not spared the rigors of the Great Depression, and who imparted their resulting fiscal conservatism by osmosis to their son, who pretended not to be paying attention. If you're a neophyte as all of us have surely been, this is a good way to begin.

The appropriate price for a print is governed by its popularity, its scarcity, and its condition.

Let's start with popularity. Picasso always draws intense interest at auction simply because so many people want something signed by him in a conspicuous location on their wall. This allows the owner of the print to bathe in his own self-esteem, congratulate himself for his own good taste and, with luck, provoke spasms of envy of the deepest green among his friends and acquaintances. Even mediocre pieces by Picasso fetch prices well in excess of their intrinsic value as works of art - provided that the signature is plainly visible. But the difference in price between a truly great Picasso lithograph and a less inspired work of his later years will be considerable, placing the latter within reach of those with a lower net worth but an equally strong penchant for conspicuous consumption.

Scarcity as a factor of price is inextricably linked to popularity. A very rare impression by a highly collectible artist will fetch a considerably higher price than either a print by the same artist from a large edition, artistic quality being equal, or a scarce impression by an artist currently out of favor or less well known, assuming artistic merit to be comparable.

Condition adds yet another variable to the equation. Condition will always affect the value of a print, but less so for a rare masterwork than for something not as desirable. Much will be forgiven if a copy of Rembrandt's Christ Healing the Sick appears at auction with correctable condition problems. Though its value will undoubtedly be affected, it will still command a price that compares favorably with the annual income of a Boston police officer with ample detail assignments. The less desirable a print, the greater the negative impact of condition problems on its price. All other factors being equal, less than perfect condition will count more heavily against a print from a large edition than from a small one.

Auctioneers staff their various departments with talented and knowledgeable individuals who arrange and supervise auctions in their specific area of expertise, such as fine prints and drawings; rare books; and autographs, for example. When receiving consignments from prospective sellers, a low to high auction estimate will be established for each item, together with a reserve price below which the item will not be sold, if the seller requests it. The auction estimate represents the auctioneer's best judgment of the approximate range within which the item is likely to sell. This is by no means infallible, but is often surprisingly close to the mark. The price range is distilled from a combination of factors including past auction records, overall condition, frequency of the item's appearance at auction in recent years, and the auctioneer's intuitive sense of the current market.

You can do worse than to use the auction estimate as your starting point, but you can also do better with further research, which I'll discuss in my next installment.


Part III –  A Glimpse At Auction Psychology

Each auction has its own chemistry based on the pool of assembled bidders; the nature, quality, and rarity of the lots; the time of year; the state of the economy; and, perhaps, the phase of the moon. Print auctions are generally eclectic affairs. With lots ranging from old master etchings to contemporary serigraphs and everything in between, the focus of each bidder is often directed toward one or another artist, genre, or period, distributing competitive intensity and moderating it as regards any single lot.

There is always the likelihood that you will be competing against an equally motivated buyer or buyers; the resulting bidding war can drive the final price far higher that any collector or dealer would ordinarily pay. When this happens, you will occasionally hear the auctioneer effusively thank the warring bidders at the fall of the hammer. If you have emerged victorious, this is no occasion to be pleased with yourself or appreciative of the the auctioneer's gratitude. Ultimately, it's your decision – and yours alone – to either chase the comet's tail or to gracefully bow out of the fray. It is in the frenzied atmosphere of such situations that the competitive instinct and, in Mr. Alan Greenspan's immortal phrase, “irrational exuberance,” can raise hell with your well-laid plans.

Unless you are collecting in the realm of top tier works by top tier artists, there is no reason to believe that a given print will sufficiently appreciate in value over time to justify the higher price that you have paid. In fact, prices paid for an artist's work can rise or fall significantly over time and do so almost without exception. If you view your print collection as an investment vehicle rather than as a source of personal pleasure offering a lifetime of engagement and study, I strongly recommend that you take a cold shower and contact a broker representing Canadian mining stocks, where your chance for wealth beyond your wildest dreams is marginally higher.

I have been what is called the under-bidder on numerous occasions; I have not yet found an instance where the resulting regret at having lost the lot has lasted more than one day. Always remember that if you are buying prints, you are competing for something that exists in multiples. You will probably see another copy of the work at auction in the near future. When the bidding goes wild for a certain print, the high price realized will draw additional copies to the market from sellers eager to capitalize on this unexpected and irrational spike in value.

    In a well-advertised auction, especially one with lots at the high end of the quality/scarcity spectrum, expect this to happen. If you can identify them, dealers are your best price barometer. Watch them. At some point they will sit on their hands unless they're bidding on behalf of a client, and if you manage to secure the item one or two increments above their stopping point, you have probably won the lot at a reasonable price. As an added benefit, the dealer will have thoroughly examined the lots of interest prior to the auction, and may have seen something that you, the novice bidder, have missed. This will have a significant bearing on his or her decision to withdraw from the bidding at a particular point.

    The most fearsome adversary at auction is the bidder with great knowledge of the material being sold, adequate monetary resources, and the emotional discipline of Mr. Spock. If you do your homework with respect to your favorite artists, and plan thoroughly for the auction itself, you will get as close to the Vulcan ideal as it is humanly possible to do. My next installment will discuss bidding strategies.


    Part IV – Preparing For The Auction

    Working with the auction catalog, build a fantasy list by identifying all of the lots (with auction estimates) that you would add to your collection if money were no object. Now rank the list in order of preference. Leave it alone for a day or two, then return and refine it again. Now it's time to do some research to validate or modify the auctioneer's estimates.

    If you're a dealer or a serious collector, you will have access to an auction price database such as,, or Review their various plans in order to identify one that best suits your needs. In most cases, a short-term trial membership is usually available so that you can test the waters before making a more cost-effective long-term commitment.

    Check each of the items on your wish list against the price database that you've chosen. In most cases, you will find a number of auction records for each of the upcoming lots which span the past ten or more years. Some prices may be significantly higher than average resulting from intense competition for the print on that particular day, an inscription with high association value, or a simple case of irrational exuberance. In one case in my experience, the relatively high price for a particular print resulted from an intentionally generous gesture by the winning bidder at a charity auction. A lower than expected price could be the result of poor condition or simple lack of interest among the assembled bidders.

    After eliminating the excessively high and low auction prices, the average of the mid-range prices realized is a good check against the auctioneer's catalog estimate. If you find a given work at a retail site, you should expect to see a somewhat higher price for it, though in recent years, dealers have become more reticent about displaying prices on line.

    Unless the catalog description of a print is detailed and describes specific points explicitly, be sure to obtain condition reports from the auctioneer for each lot in question. Ultimately, there is no substitute for being present at the auction preview sessions; the auctioneer's staff is there to help you obtain the information that you need.

    Based on your research, establish a value for each lot that represents a reasoned and reasonable bid. Calculate the total for all of the lots on your list and compare that sum to your budget for the auction. Here's where it may be necessary to make some difficult choices in order to reduce the total dollar value of your wish list about 20 per cent lower than your budget. This is because the catalog's auction estimates do not include the buyer's premium that will be added to your invoice.

    Depending on the auctioneer, this premium can range from 15 to 25 per cent. If you bid through an on-line intermediary like Live Auctioneers, the buyer's premium will typically increase by an additional 3 per cent. If you are buying for your collection, you will also be responsible for state sales tax if you are located in the same state as the auctioneer or if you are picking up your lots at the auction rooms.You can legally avoid the sales tax if a) you and the auction house are located in different states, and b) you arrange for the auctioneer or a third party to pack and ship the lots to you at your expense.

    Assume that you're planning to bid in person at a Skinner auction in Boston; that you live in Massachusetts; and that you have a total auction budget of $5,000. For every dollar that you bid, you will also be charged a twenty-five per cent buyer's premium, and sales tax of 6.25 per cent. This means that your winning bids should total about $3,765.00. If your winning bids total $5,000.00, your auction invoice will be about $6,640.00. This illustrates how planning and discipline (especially by avoiding runaway bidding wars) can help you to avoid unnecessary peptic upset. Your immediate disappointment at standing on the sidelines while others bid merrily on some of your favorites will be tempered when you have the opportunity to bid on other copies of the same works in surprisingly short order. Happy hunting!