Where to buy art for investors - part1
Since I started to appraise artworks for customers in the USA some 25 years ago, I was often consulted by customers who requested to know the value of an artwork bought in a gallery 20-30 years before. Often, they were disappointed when I announced to them the value of their artwork as of today. Sometimes the actual value is 1/3 of what they paid 30 years ago. Is investing in fine art not a good business? Of course, it is a very good investment when you follow basic rules.
Why do you need to avoid galleries if you want to make a major investment, Picasso, Chagall, Warhol, etc ?
A gallery often has costly functioning costs: -rent of a space which is usually in an area of very high standing, -employees to make the gallery function -a members of organizations like Artnet.com, etc. A gallery owner who invests in a painting or in an artist doesn't know when his investment will sell, and if it will be profitable, sometimes he may have his investment blocked forever. The same for an artist he exhibits in his gallery, he usually charges the artist 50 % of the sale price of a painting, but he has to invest in exhibition catalogs, vernissage, commercials on radio, articles in magazines, etc. In conclusion, it's always the customer who will pay the bills for the gallery owner. This is one of the reasons why art bought in a gallery is rarely a good investment for a short time.
Of course, for upcoming artists, a gallery or auction houses ( Arcadia sales Christie's- Discovery auctions from several important auction houses : Doyle NY - Yvey Selkirk Saint Louis - LAMA - Los Angeles) are the most interesting places to buy.
Galleries will disappear in the future, just like the little stores disappeared to make space for big chains of warehouses. The most important fine art brokers have no longer a gallery; they operate from their own houses, lofts, condos etc.
Why is it wise to buy from them? You will not pay all the costs you will have to pay to a gallery owner: no employees, no expensive space rentals, no expensive catalogs or commercials in magazines like Architectural Digest, Art News, Rob Report, etc . Of course, you will need to trust your broker. A serious broker will always give all the documentation for an artwork, including the certificate of authenticity delivered by the sole recognized expert for that particular artist , but also made recently. An expert may be recognized at one time but maybe contested another time, and other experts may be in charge. The certificate of authenticity will not be older than 6 months. Besides the certificate, the broker will provide you with complete documentation about the artwork, including the provenance, the bibliography of the artist, the references of the artwork in older auction sales, private sales, references to the "catalog raisonne" and a fair market value of the artwork.
A good broker
- has at least 10-15 years of experience in the fine art market,
- has a degree in fine art.
A broker will show references to his work and will introduce you to his clients. A good broker is often recommended by one of his clients.
So as in real estate, many people think that it is easy to be a broker in fine art, and brokers appearing all over the world are willing to make a fast buck. Good brokers are very discreet people, which is a major quality for a fine art broker.
A Picasso will cost you 10 M $ with a broker, and the same painting will cost you at least 15 M $ in a gallery. Also, if you want to sell a Picasso, don't forget that auction houses charge premium costs. They are variable but always very pricey. They charge premium costs to the buyer as well.
A good broker will show you several possibilities depending on the fine art you have.
© Gerard Van Weyenbergh - https://www.vwart.com