There has always been something of a debate when it comes to choosing between buying in auction or buying from a gallery. Buying in auction can be fun, but it can carry a lot more risk, whereas buying from a gallery should include more safeguards and the pictures bought have the benefit of the owners experience and expertise. There are also additional costs when buying pictures in auction. These costs are not always recognised. To begin with, there is a Buyers Premium to pay on the auction hammer price which very often amounts to 30% if you include VAT and sometimes more when you add A.R.R. Then there are transport costs from the auction house, with more potential costs if the picture needs cleaning, remounting and framing.
Here is an example: Hammer price £1000 then add 30% buyers premium, plus 4% ARR= £1340. Postage costs say £80. If the picture needs cleaning add £100. To reframe and place a new mount, minimum £100 total cost = £1620. To achieve a modest mark up, a dealer paying for all these extras may ask £2000 for a picture which went on the hammer for £1000.
This is why galleries on balance tend to be a bit more expensive, because they have these extra costs and must achieve a mark up. Auction prices on the other hand can produce very erratic results with some producing prices which are so low that they don’t represent the true value of a picture and sometimes so high that they would eclipse any price tag a gallery would place on it. There have been several large single owner collections of bird art, in recent auctions, which have achieved prices that galleries could only dream of, so it seems that when there is plenty on offer and the sale is well advertised, it brings out the big collectors and the prices can soar.
Because auctions rely on attracting the right buyers at the right time, something they don’t always manage to achieve, we sometimes see pictures fail to sell, or sell on a low estimate. Many of these pictures are often readmitted at a later date, sometimes in a different auction and can end up making several times more than its previous price or estimate. I personally bought a picture from an auction in 2019 for £200 on the hammer and then sold the same picture a year later in a different auction for £980 on the hammer. This has happened to me on several occasions, so it shows that there is no such thing as a right price when it comes to auctions.
The point of buying art is to get something that the purchaser considers a fair price. So the question then becomes how much should I pay a gallery or a dealer, if the picture in question was bought at a bargain price. It all comes down to the quality of the picture and what someone personally considers its worth. If someone offered me a picture that I wanted and I considered the price a fair one, I’d buy it regardless of what it cost the vendor. These are all decisions that only the buyer can make, but remember good examples always come at a premium.