Why Auction Estimates Mean Almost Nothing, part 2
- gerard van weyenbergh
- 10 minutes ago
- 2 min read
The Psychology of High Estimates
The opposite can also occur.
A work receives a strong estimate.
The owner is pleased.
Expectations rise.
The catalogue appears impressive.
Then bidding begins.
And stops.
The work fails to sell.
Collectors often assume a high estimate indicates confidence.
Sometimes it does.
Other times it simply reflects the auction house’s desire to secure the consignment.
Auction houses compete aggressively for desirable property.
A generous estimate can help convince an owner to consign.
The estimate becomes part of the sales presentation.
The problem arises when the market disagrees.
The auction house publishes an estimate.
The bidders publish the real answer.
The Difference Between Value and Price
One of the most important lessons in the art market is understanding that value and price are not identical.
Value is theoretical.
Price is real.
An appraisal may suggest one figure.
An auction estimate may suggest another.
A dealer may propose a third.
The market ultimately decides.
Collectors frequently confuse these concepts.
A painting estimated at $500,000 may sell for $100,000.
A painting estimated at $100,000 may sell for $1 million.
The estimate did not determine value.
The bidders did.
What Auction Houses Know
Experienced specialists understand something many collectors do not.
The estimate is usually the least interesting number in the catalogue.
More revealing questions include:
· How many similar works have sold recently?
· Who are the likely bidders?
· Is the artist’s market expanding or contracting?
· Are major collectors currently active?
· Is there museum interest?
· Has a significant exhibition recently occurred?
· Are economic conditions favorable?
These factors often influence the outcome far more than the published estimate.
The estimate is visible.
The real market forces are usually hidden.
The Danger for Collectors
The greatest danger occurs when collectors use auction estimates as evidence of value.
I have seen owners purchase works solely because an auction house estimated them at impressive levels.
Years later, when attempting to resell, they discover there is little market interest.
The estimate created confidence.
The market created reality.
A sophisticated collector understands that an estimate should never be treated as proof.
It is merely one opinion among many.
And like all opinions, it can be wrong.
The Unsold Lot Nobody Talks About
Auction houses publicize record prices.
They rarely celebrate unsold lots.
Yet unsold works often provide more useful information than successful sales.
A work can carry an impressive estimate.
It can be accompanied by excellent marketing.
It can appear in a prestigious sale.
And still fail to attract bidders.
Why?
Because the market was unconvinced.
Collectors should pay close attention to these failures.
They reveal the difference between expectation and demand.
An unsold lot is often the market’s way of saying:
“We do not agree.”
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