DECIDING TO SELL YOUR COLLECTION
There are many personal and financial reasons for selling parts or all of your collection. In any scenario, your first step to selling your art is to make it “retail ready.”
It’s time to line up the necessary documentation. This includes the provenance documents, artist name, materials used, recent appraisal, and dimensions.
A dealer or auction house will use this information to outline the costs of promotion and commission. These documents will also determine how to file your taxes.
When you have the appropriate documents pulled, you can begin researching potential buyers and the process of selling art.
Here are a few things to consider when selling artwork:
Discovering Potential Buyers
If possible, start with where you bought the piece. These resources will likely have advice on who might be an interested buyer. The original seller may have interest in buying back the work for re-sale. In some scenarios a gallery will display the piece for a re-sale, meaning you are still the owner if it doesn’t sell. If that’s the case, you should work with them on the most effective and alluring display. Have the details of how the piece will be marketed or available to potential buyers. Whether you are selling through an auction house or gallery, the commission should be outlined for you at the onset so you are clear on your possible profit margin.
Selling through an Auction House
Working with an auction house is another option, if you are comfortable with them taking a commission. A seller’s commission ranges from 20 to 30 percent, according to Mutual Art.
Find an auction house with good communication that is willing to work with you. They should be responsive to your questions and fill you in on the high season and low season for their company.
Here are a few other points to keep in mind:
•You can negotiate their auction house fee to a number you are comfortable with. Work with them on a fair sale value. You want to be happy with this number and also confirm that it is not too high, which might intimidate potential buyers.
•You also want to make sure your insurance company is aware and your policy is up-to-date in the event of damage.
•Confirm transportation restrictions to prevent damage. Read through the contract very thoroughly and consider having your attorney review it.
Selling through a Gallery
Like with auction houses, you want to enjoy working with a gallery. These people are selling your art and the best way to confirm they have top-notch customer service is by visiting them first.
Make sure you are greeted at the door and treated well from the start.
Make sure the gallery is a good fit for your artwork by considering their current collection and pricing. You can work with an art advisor on finding the best art gallery that falls within your specifications.
Once you have found the right art gallery, you can either go through an online submission process or an in-person meeting. If the gallery is accepting new artwork, they will either buy the piece outright or it will be displayed on the wall until it is sold. Galleries will generally take a set commission upon the work being sold. In some cases they will lower the commission, but charge a monthly fee for the artwork being on their walls.
Understanding the Contract
When selling your art with a gallery or auction house, there are a few things you want to be sure you understand in the contract:
Where will the art be displayed? Can the contract be terminated? When will you be notified of a sale? Who is in charge of damages? When and how will you be paid?
Choosing the Right Vendor
If you enjoy working with the vendor, and they have good customer service, it’s likely that they will treat potential buyers the same way. Selling art is a great way to keep your collection dynamic, and to make contacts in the art world. Whether you decide on an auction house or a gallery, continue asking questions until you feel informed and satisfied.
OTHER OPTIONS FOR DIVESTING
When it comes time to sell a piece in your collection, you want to get top dollar for your investment.
The secondary art market can be a competitive place for a private collector to approach solo. Prices vary widely across short periods of time based on what’s available and what other collectors desire. There isn’t one right answer that will guarantee huge returns, but where you sell your art matters.
Even more so than the primary market, prices in the secondary market are governed by supply and demand. Factors like timing of sale, convenience, region, condition, and type of art, are also important—so, factor those into your decision.
In general, the fewer transactions that take place between you and the next owner, the better off you’ll be.That is, of course, if you know how to negotiate and take appropriate precautions to ensure payment. If you’re going down this road, make sure to get your piece appraised and know how to read the appraisal. Depending on the value of your work, these transactions can be complex and high risk. There’s a reason auction houses and other art sales venues take a portion of a transaction. When the sale of your piece looks anything less than straightforward, consider letting a professional handle it.
Art dealers often sell in both the primary and the secondary market. An advantage of working with a dealer is that they have extensive knowledge and connections within the art world. If they don’t work specifically with your piece, chances are they’ll know someone who can.
Dealers are able to leverage their network to get high prices for fine art, especially if it fits within the interests of their clientele. It’s a good idea to do some independent research to see what type of art a dealer typically works with before approaching them.
Keep in mind that art dealers likely know the market very well and also need to turn a profit themselves, so a current independent appraisal is a good idea in this setting.
Auction houses are one of the most common places to buy art on the secondary market. They have the potential to drive huge prices and bring experienced collectors together in one place.
One of the risks when selling your art at an auction is that it may not fetch the price you want. Although you can set a reserve, there’s no guarantee that a piece will sell. A bidding war on your piece can see it go for well over asking price.
Auction houses offer appraisals of art and can handle the acquisition and sale from start to finish, which means a lot less work for you.
WORKING WITH ART ADVISORS
Art advisors are very familiar with the nitty-gritty details of owning an art collection. They are a great resource when managing facets like taxes and estate planning. Here are six art collection details where your consultant can advise.
Art advisors can help:
Guarantee You Have the Proper Insurance
Art insurance is your defense against the unexpected. An art advisor is well-versed in how to secure the proper insurance for your collection. They can help you understand different coverage plans and what type of claims can be made.
Help You Sell Pieces From Your Collection at the Right Time
If you are interested in selling a piece of art, the first suggestion is always to contact the original seller— whether that be a gallery or artist. Your art consultant can assist in this. If the gallery or artist is not available or interested, your consultant can assist in finding other avenues.
Recommend the Right Person for Conservation
Art advisors will either be familiar with or have the tools to research the different conservationists in your area. They can find a candidate with the experience needed as well as manage the art repairs and restorations.
Take the Headache Out of Shipping & Shipping Insurance
If you need to ship an artwork, special attention and care should be given to packaging and shipping insurance. In some cases, certain works require special crating and shipping materials. You need to know when these situations arise. Your art advisor can handle this for you.
Guide You Through Estate Planning
Advisors are a knowledgeable resource to consult with when going through the beginning stages of planning an estate. While most collectors don’t start thinking about estate planning until later in their life, advisors can help you plan out the future of your collection.
Beginning by gathering all the proper provenance documents, advisors will help you set up one of three choices: selling your collection, transferring your collection to your heirs in an LLC, or donating your artwork.
Ensure Your Taxes are Accurate
When purchasing art out-of-state or filing taxes, advisors are experienced in the best way to handle your payments. Sales tax differs from state to state, and advisors can make sure you have everything properly recorded and filed, so that no issues arise and that you save as much money as possible.