ART CONFIDENTIAL Part 2 – Questions New Art Buyers Are Afraid to Ask November 27 2019
Many people interested in buying original art are intimidated by the art world and don’t know where to turn for guidance. Art Confidential is a 5-part guide for new art buyers. The series is written to assist new art buyers in building a foundation and a starting point for an art buying adventure that will lead to a lifetime of enjoyment and, if you’re lucky, obsession.
Written by Kelly Juhasz, Fine Art Appraisal and Services
Originally published in Distillery District Magazine, July 2019, Vol. 38
ART CONFIDENTIAL – 5-Part Guide for New Art Buyers
Many people interested in learning more about buying original art are intimidated by the art world and are afraid to ask about what they don’t know. You are not alone if this describes you.
Asking a lot of questions helps you gain a deeper understanding and establish a higher level of comfort in buying. Those of us working in the art world love to talk about art and share our knowledge, so begin asking questions right now.
To get you started and to support new art buyers in building a foundation of art market knowledge, here is an introductory list of questions which will help build your confidence.
- What determines the value of a work of art?
- the artist’s skill and talent,
- formal elements of the artwork such as composition, colour, technique, size, materials and condition,
- the artist’s education, experience, reputation and supply of work,
- collectors’ demand and tastes,
- subject, message and meaning,
- a consistent and recognizable style, and
- past ownership (provenance) and exhibition history.
When looking at a celebrated artist’s overall body of work (oeuvre), there will be work for which the artist became known. It is important for new art buyers interested in purchasing historical or recognized contemporary work to understand the career of the artist and learn which of these value characteristics are important in setting the prices of the artists under consideration.
A qualified art advisor and appraiser can assist you in buying quality pieces at good prices. The advice you will receive is educated, experienced, transparent and independent. A qualified advisor can help you learn and prevent you from making big mistakes.
- What do I ask the artist or gallerist about the artwork?
When looking at a historical work, talk to the gallerist about where the work fits into the artist’s career and inquire why and how the artist is celebrated. Ask about the artist’s selection of materials and size, and ask how their market has performed over the last five years. Inquire as to the supply of work by the artist to find out how often their work comes available. These kinds of questions will help you learn about the value characteristics important to the particular artists who have peaked your interest.
- If the price is not posted, is it okay to inquire?
Artwork hanging in a booth at an art fair or in a gallery is there to be purchased. Artists or gallerists may not like the look of the price or a label on the wall beside the work. They may not feel that the process should be about the price because they want you to focus on the artwork. But, for most of us, we can’t buy if we don’t know the price. So, yes, ask for the price. If you really like the artist's work but the price doesn't fall within your budget, they may have a smaller work or a work on paper that is more in your price range. Do not be embarrassed if they don’t. You’ll just have to keep looking and that’s a lot of fun.
- Is asking for a discount on the price common practice?
- Can I return a work after I’ve purchased it?
- When I buy a piece of original art, is it mine to use however I want?
- Is art an investment?
It can be. Art falls into a category called “treasure assets” and for these kinds of assets to be an investment, a buyer must know a great deal about the art and how the art markets operate. Art as an investment is very high risk and typically longer term because of the high transaction costs. For work purchased directly from an artist or from an artist’s dealer, collectors would be reselling in the secondary market (the market where artwork is sold a second time or by a subsequent owner such as on consignment through an auction house or specific fine art gallery) and it is the costs of buying and reselling that can range up to 50 percent in commissions to the dealer, advisor and/or auction house. Commission rates are often dependent on the selling price. There are also the costs of packaging, transportation, framing, insurance and capital gains tax on work that has increased in value from the day it was purchased to the day it is resold.
In order to realize a solid gain, the value of the art sold would need to have increased substantially to cover all associated expenses. Much of the artwork purchased in the primary market falls in value if it enters the secondary market. Knowing the market trends and value characteristics of particular artists will help you select works that could increase in value over time. Carefully selected artwork and an investor armed with great art knowledge and market information would likely see a return similar to bonds. On the other hand, your art may be worth more than you think if you’ve inherited some work or started buying recognized artists’ work a long time ago.
Have the artwork appraised by a qualified appraiser. Remember, most art buyers buy because they love being surrounded with original art and they realize that some may increase in value but most will remain works they just love to view and possess. If you are interested in buying art as an investment, it is beneficial to work with an advisor to help you select the best work available by the best artists in the best market at the best time in your price range.
- What do I need to do after I’ve purchased art?
- You may need to insure the work. Check your existing homeowner/tenant insurance policy to see if it covers fine art and for how much and from when/where that coverage takes effect.
- Part of care and maintenance are the framing requirements for the work. Framing with poor quality materials and workmanship can prove to be more expensive than spending extra money upfront for conservation framing. For example, wood pulp in mat board for prints and photographs could burn the artwork and, without the proper glazing or glass, UV light can fade work so consider acid-free matting and UV protected glazing.
- Find out how best to transport your artwork and display it. Sixty percent of insurance claims for fine art are due to damage during transit or hanging. Talk to the artist, art advisor, framer and/or installer for help with finding the best materials and location with optimum conditions to display and protect your new acquisitions.
- Establish a paper trail. Keep all background information concerning your art purchases including the purchase receipt and promotional materials from the exhibition. If possible, take a photo of yourself with the artist with the two of you holding the work. Create an inventory list with the artist’s name, title of the work, year it was created, details of the signatures and the exhibition history (or auction or gallery information) along with an image. If you are buying a work in the secondary market, obtain past ownership details at the time of purchase.
- How can I find out the value of my art for insurance coverage or my estate?
Always work with a qualified appraiser who is a member of a recognized personal property appraisal organization such as the International Society of Appraisers. A qualified appraiser can help you manage all the responsibilities you have as an art owner. They can reduce your risks by providing unbiased and thoughtful opinions of value upon which you can base your financial decisions. As well, a qualified appraiser’s value conclusions are based on prescribed methods of evaluation, research, report writing standards, formal education and training. Remember, many qualified appraisers are also advisors but not many advisors are also qualified appraisers.
Kelly Juhasz is an art advisor and a qualified appraiser specializing in fine art and antiques at Fine Art Appraisal and Services, and an Accredited Member of the International Society of Appraisers. She is the principal at Fine Art Appraisal and Services offering artist legacy services, collection management, estate planning for treasure assets, sales services and Canadian Cultural Property appraisals.