Chapter 7 - The Price of Art
This is every collector's big concern: How can you be certain you are paying a fair price for a piece of art? The pricing of art can be as subjective as taste. Artists may ask themselves, what amount will make it worthwhile for me to part with this piece? The art gallery may ask, what must the art cost to make it deserving of wall space? It is up to you to determine for yourself if a piece is worth the asking price. This isn't easy because there is no established, agreed-upon price for every painting, print or sculpture.
Sound scary? That's understandable. However, while there are no uniform pricing standards, there are ways of determining value ranges. It's to your advantage to become familiar with what makes up the "fair market value" of a work of art.
Simply put, "value" has to do with why something is worth what it's worth. The value of art is, for the most part, based upon condition and vaguely definable things such as quality, rarity, the reputation of the artist, fashion, and market forces.
The reputation of the artist is considered to be the most important factor of all. The value of art can be hugely based on who did it and when. An oil painting by Van Gogh done in 1889 is worth an unbelievable amount of money. The watercolor done last year by Cousin Michelle is… well, you get the picture.
Remember, always ask to see a biography of the artist whose work you are interested in acquiring. Information on the artist's background, training and influences as well as career landmarks such as gallery and museum exhibitions should be included. These write-ups often list private collectors and institutions that have previously purchased the artist's work. This information will provide clues on where artists are in their careers, where they've been and where they're going.
When we speak about the quality of a particular work, we mean in relation to other works by the artist. Ask yourself, where does this piece stand in the artist's overall body of work—the importance of acquiring the best the artist has to offer cannot be overstated. If the piece is a later work, does it show a progression, an increased technical or compositional excellence as compared with earlier works?
The condition of a work of art is paramount. This especially applies to works on paper such as watercolors and prints because they are more fragile than, say, an oil on canvas. Of course, you want to be aware of the condition of oils too. Small tears in the canvas, or a little trimming here and there to fit a favorite frame can and will adversely effect a piece's value.
If a print is an antique or very old, check for "foxing" or stains. Be on the lookout for taped or glued down corners and trimmed margins. Works on paper are subject to fading so make sure the colors are bright and strong. Just like a coin, the value of a work of art can be drastically effected by it condition.
If most of the better work of the artist is already in museums or private collections, then his or her remaining artwork will command a higher price. Ask yourself, is the artist working in a medium that takes a long time to create (such as stone or metal sculpting) so that less work is available? Does collector demand exceed the available supply? And is the artist still living and thus able to produce more work, or deceased so that no further work will be created for the marketplace?
When it comes to graphics or multiple originals that are part of an edition, the edition size can affect the price. If the artist produced an edition size of 10 woodblock prints as opposed to 100, (all other things being equal), the pieces in the smaller edition may have more value because so few were made.
Track Record of Sales
This simply means, what have people previously paid for work by the artist? Does the artist have a consistent record of selling in this price range for a comparable work (size, quality)? If the artist is in a career mid-point, is there any indication of price appreciation?
Don't be shy about asking the seller questions about prior sales prices. As a potential collector, you have a right to know.
Naturally, what is trendy at the time is worth more. It is not a reliable measure of value and, by definition, is prone to change.
The art market, like the stock market, is subject to ups and downs, not all of which can be explained. Up until the 70's and into the 80's, money had not been the be-all and end-all in the art business. It was largely about passion. With the coming of a booming economy people had more discretionary income and everything changed. With a lot of money and young, inexperienced buyers floating around, the scene was set for equally inexperienced people to enter the art business with the primary motive of getting rich. The art market became a money-oriented business.
Unsophisticated collectors were paying outrageous sums for the work of unproven artists. The story of the painter's son selling his first and only work for a lot of money happened during this time of buying art as the "in thing." Of course, when the boom was over, many collectors saw the value of their over-priced art fall through the floor.
A good thing came out of all this. The idea of art as a part of everyday life was, like the genie, not going back into the bottle. Many new artists were given the chance to have their work seen and actually make a living with their art and many new people were introduced to its pleasures.
Remember, current demand can greatly affect the value of art. And, don't be swayed by market hype when determining worth.
Pricing occurs after the value of the work has been established. Value is an important component of pricing but there are subsequent factors that come into play as well.
Having attended scores of art exhibitions one of the most frequent questions I've heard artists asked is, "How long did it take for you to paint that?" What they are really thinking is, "Gee, if it only took a week to paint, it shouldn't cost that much," and are equating time with price. One of the best replies I've heard by an artist to this often asked question was, "All my life."
Most artists do not want to answer the question (so please, don't ask it) because they know the human response is to look at the price of the artwork and divide it by the number of hours to arrive at a price. This is not a valid way to determine pricing.
It does not take into account things such as the cost of materials and tools, and extras such as framing and bronze foundry fees. Sculpture bases, often made of granite or marble, are expensive. The cost of professionally photographing and marketing the work doesn't come cheap. There are fees associated with entering shows. Commissions must be paid to galleries and other dealers (generally 40-60% of the sale price). Costs associated with travel to shows and shipping fees to get the art there usually come out of the artist's pocket.
Then there are years of education and experience, which are hard to quantify, that helped the artist develop the skills necessary to create the work. Artists have overhead too, such as a studio in which to work. Today's artists must also create and maintain a website.
All of these factors must be built into the price if the artist is to earn a living.
The more you look at art, the more you will get a feel for what the selling prices are for the kinds of work you like. When you are in your "browsing" mode, be sure to make note of prices too. You can use them as a basis for comparison when you are finally ready to buy.
Can you bargain for a better price? Fair question.
Basically, there are only two ways in which art is acquired by an art gallery.
The art may have been purchased by the gallery and then given a retail profit markup, or it was consigned by the artist to the gallery with the sale price split between the gallery and the artist as determined by overhead.
As a savvy buyer, you should always ask the art dealer or gallery salesperson if the piece of art you are interested in is consigned or purchased.
Usually, if the artwork has been consigned there is no extra gallery markup to permit price negotiation. If, on the other hand, the dealer owns the artwork outright and needs to turn over the inventory, there is sometimes an opportunity to bargain for a better price. This is not, however, the same thing as a "discount."
Most legitimate, long-established art galleries do not play the game of hiking up prices in anticipation of markdowns, often the case with everything from jewelry to sweaters. Nor do they offer so-called "discounts" from an already artificially high selling price. Successful art dealers know the current market value of their wares and price the artwork accordingly. This is particularly true if the dealer expects repeat business from the customers who acquire art from that gallery. Price-gouging doesn't work for very long in this or any business.