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Pricing Art by Joan Seifried
I am a certified appraiser of Fine Art with the International Society of Appraisers and the Appraisers Association of America of New York City - I had an appraisal of two works by a living artist here in San Diego last week and I couldn't find anything on this artist on line or in any of my numerous data bases on gallery representation, auction house sales, etc. I finally got in touch with the artist through a gallery he had shown with in 1966 - lucky the most senior sales person was still around from those days and located an old phone number for this artist. The problem was - he not only had not kept receipts of things he had sold from his own home studio, but he had no record for the prices his own gallery had sold his work. As you know, the gallery takes an artist's piece on consignment or sometimes buys the piece out right and the mark up is up to the gallery,
However, it is just these two prices which an appraiser needs to know to help him or her make judgments about pricing work in the market. But first, how does the price get established at the beginning of a career.
This description by Patricia Frischer is a good place to start,
At some point the artists will sell a work and s/he has to decide at what price to enter the marketplace. The artists may seek out advice at this point and will likely compare various factors of other artists selling prices to his or her own situation. To mention a few, the major factors in establishing comparable features which the art market generally identifies are: medium, style, subject, tone, composition, handling of the paint or other medium, size, major influences (such as professors or mentors), and date of creation. You may have seen such features grouped together. When they are, this is called "School OF" in appraisal theory. In fact if a client asks me to evaluate if he/she is paying a fair price for a relatively new artist's work, I use just this scale of comparables with existing work which has sold in the marketplace.
When pricing work the artists thinks about four main factors: demand, expenses, quality and scarcity. For example, if the artist can only produce a limited amount of work per year, this might create a scarcity which would affect the demand. They may consider the cost of the materials especially if working in a costly sculpture medium. The length of time the artist has been working as an artist is usually coupled to the track record of shows which can usually be seen on a resume or curriculum vitae. Even the subject can sometimes affect the price of the work. A popular period of an artist’s output can climb in price faster than other periods of the work. Don’t forget the obvious ( i.e. size) is almost always a factor.
The artist’s goal is to enter the market place at a price low enough to build the clientele for his or her work and at the same time fairly price the work. Ideally the work will never be offered for less money than this starting price and will slowly but steadily rise during their lifetime and after. Statistics from the Mei Moses Annual Art Index show that buying art is a better investment than the S & P Stock Index. But amazingly the category that gains the most in value is not the master works, but those of the lower priced work which has further to gain in value. So savvy collectors look for those artists who are on the upward path .
The only thing that establishes value, both when buying and selling a piece of art is:
The catch is how do you find these kinds of records in public places?
My first step in researching a living American artist is to see if they are listed on AskArt on line - to be 'listed' means that the work is important enough to have sold on the secondary market - that means at auction in one of the large houses like Christies, Sotheby's, Bonham's or Butterfields. Why? Because auction house have to make their sales public. Galleries do not and for the most part will not.
How do the works go to auction? I know some artists who place a piece of theirs at auction themselves. But an artist is not considered a 'listed' artist until the actual work is sold and the work can’t make an auction sale unless it has some public, nationwide notice. This applies to the grandfather of all value guides for artists…the printed book each year called "Davenports". Therein lies the Catch 22.
Ask Art, ArtNet, ArtFact, ArtAuctionResults and some other on line research services do not need to have a record of a sale to list a name. Sometimes an artist can be listed with them with just a portfolio showing and a few good galleries on the resume. The artist’s web site, which ideally should always have some kind of value record for the work, is another source. Remember, in this case, the record should be based on actual gallery sales, not sales from a personal artist’s studio.
There are now Register Sites for works of art. Yes, these are family easy for artists to list on. They just have to say they created this work and have the work listed. These sites are different from the ones I mentioned above which list an artist's name and then the value. These sites are work specific. The greatest of them all is the Getty Art Registry. Then there's National Fine Arts Title and Fine Arts Registry. All these, however, validate - or make public- the artist’s work in the general public arena. That's very important. In case of a loss of a work or art (that's how these last sites I mention came to be), the theft may be recovered if the work is registered.
A word as to value. The gallery sales is what we appraisers call replacement costs - what someone would have to spend to purchase your work again. What the IRS considers fair market value (FMV) is more and more what the work would go for in its most appropriate arena for sales. If the artist sells mainly out of his or her home studio, it is this price which is FMV. If you are valuing a Picasso, FMV is what that work sells for at Auction. I advise living artists to speak in terms of replacement costs. Fair Market Value is very difficult to ascertain for a living artist because one day he/she might sell out of a street faire and the rest out of a high end gallery. For most living artists, there is no one particular set venue (market) for the work.
Finally one of the best international trend spotters in the Art Market is the French site Artprice. You have to be a little of a statistician to read some of the graphs but in a nutshell I will tell you that last year, no fewer than 328 bids over the million dollar mark for works were recorded, against 210 last year. This has lead to speculation as to an impending art investment bubble. What this means for the collector is that art collecting is making headlines. Time to jump on the bandwagon and start buying. Making sure that you keep good records of your purchases. I am available for email consultations anytime to help members of SDVAN with this thorny issue at email@example.com . For more information www.angelappraisers.com
Read Joan Seifried on Appraising Art