If you’re trying to learn how to buy art in auctions, it’s probably best to start by considering the risks and downsides. There are plenty of UPSIDES as well, naturally. But I will get to those in another article.
Let’s start with the “caveat emptor” that goes for anything you buy at auction. Buying art at auction is NOT like buying something at retail. In almost every case you cannot return what you win, and the auction house’s small print will state this.
This policy includes circumstances where the art does not turn out to be what the description says it is! That’s right: if you come home with a forgery, TOUGH LUCK! The good news is that respectable auction houses generally have high standards for vetting the art they auction. But this does not mean they’re always right. And the lesser-known auction houses? I’m convinced they pass of forgeries with a wink and a nod all the time. After all, they get a commission, and they’re not at any risk.
The second risk is that unless you live close to the auction house, you cannot see the work in person. And this can be VERY risky. You can’t really get a perfect “feel” for the painting on a computer screen, and you certainly can’t judge the condition. The auction house might or might not describe the condition accurately.
Dealers such as Guy Lyman Fine Art offer no-questions-asked buy back policies, which protects you from these nasty surprises.
A third risk is lack of self-control. Unless you come up with a concrete price you are willing to pay (and it must include the buyer’s fee, often up to 25%, plus any taxes), and are able to really control yourself, you will find yourself getting caught up in the competition and frenzy and paying more than you wanted to for works of art. This used to happen to me constantly when I was a novice.
Finally, and it’s not a risk but an expense, do NOT forget shipping costs. I have paid $1,000 to ship a single work of art!
None of this is to say auction houses are not good sources for art. But you must go into any auction with care.