Converting Your Art & Antiques to Cash - A Primer for
Families Looking to Downsize, Part One - Valuation
The first in a series of two or three likely updates describing the process followed by a San Francisco-based art collector attempting to value his collection and possibly dispose of some personal property. Before you pile possessions at the curb or host a garage sale, review this collector’s experience…
March 29, 2012 San Francisco… Many American families are downsizing in this economy, looking to convert an antique or work of art to cash, as a way to redecorate, or to simply reduce the amount of “stuff” within their homes. Sidewalk sales are great for disposing of bookends and coffee mugs, but how would you set up to sell a painting? Stories of $5 garage sale purchases that turn out to be $10,000 treasures abound -- just weeks ago an East Coast auction house sold a painting acquired for $3 at Goodwill for an astonishing $190,000 -- so a bit of “front-end work” is necessary to prevent a potential blunder on the part of a seller.
A San Francisco collector has an oil on canvas that he’d consider selling. As any savvy 21st century person would do, he googled the artist’s name in an attempt to determine if he has a million-dollar work or a ten-dollar work. What he’ll learn may help others in similar situations…
What’s it Worth?
This is the most important question to be addressed when considering what to do with a work of art, celebrity memorabilia, antiques and collectibles in your home. You need to have the work appraised. An appraisal could offer you one of two values/prices: a replacement value (for insurance purposes, the current-day cost to replace the object should it become destroyed/damaged) or a Fair Market Value (FMV). The FMV (as well as the at-auction value) of an object is the value a knowledgeable person might be willing to pay for the object (based on its condition, size, age, maker, rarity, aesthetics and the history or provenance of the piece). These two values are, most often, widely varied – for example, a crystal vase could have a FMV of $100 but a replacement value of $280, the latter being the price tag that vase would wear today at a reputable retail outlet or at a gallery.
Auction house specialists and art gallery owners recommend regular appraisals of personal property as a means of updating your homeowner’s insurance. Values of antiques, art and memorabilia – including first editions of important novels, original paintings and sculpture by known artists, ceramics, silver, furniture and other artifacts – can and do change over time – the values moving both up and down as collecting and cultural trends or social interests change. For example, after the hit film Titanic broke movie theater records, rescued original Titanic menus, the ship’s cups and saucers, and other memorabilia associated with the vessel sold at auction for record prices. Year later, the market had softened for those artifacts and auction hammer prices were lower.
You should expect to pay for an insurance appraisal – it’s delivered in writing, notarized, and is suitable for inclusion in your insurance papers. Most auction houses will give you an at-auction valuation for free, but anticipate a bit of snotty attitude from the specialists at larger houses if your artwork isn’t by Maynard Dixon or Henry Moore. Their staff routinely search for the $100,000 painting and don’t want to spend much time talking about a $100 painting. Smaller auctioneers, accustomed to selling the $300/600 work of art in their sales will be much more willing to chat about your piece. If any auction house specialist who sees your art is interested in selling it on your behalf, they won’t be shy about asking you to consign it.
All appraisers are not equally qualified and any appraisal is a matter of opinion based on experience and research. The San Francisco Bay Area is robust in auction houses, art galleries and knowledgeable experts for many types of collectibles. Seek multiple valuations on your property and do your homework with respect to the background and professional experience of your appraiser – the more relevant experience, the better. Local Bay Area auctioneers host regular appraisal events where you can bring an object in to their offices to be inspected. You can also submit photos to leading auction houses in New York City and London and await their perspectives. You should take good clear photos of your treasured object - best if these are digital (so they can be emailed to experts) and be sure to capture views of front/back, top/bottom as well as any signature and/or maker’s marks, et al.
Once you have an idea of the potential value of your object, you can take the next step. If the value is high enough to intrigue an auction house, ask them to estimate the costs before you sign any consignment contract. You could expect to be charged for marketing, insurance and photography, as well as other fees. These seller’s fees vary at different firms, so do shop around. As well, ask how long it may take before your property is offered at auction and – more important – if sold, how long it will take to generate a check for you. Be sure and understand what the reserve will be. A reserve is the lowest bid that would be accepted as a sale for your property. It’s not impossible for an auction lot, valued at $500/600, to sell for $120 (or less) if no reserve is in place. You may have to pay a higher consignment fee to set a reserve above 50% of the pre-sale auction estimate, but it may be worthwhile in the long run.
The Question of Title
Before you can or should sell any property, be sure you have the right to do so. That big painting that hung in your deceased grandparents’ home may now hang in your home, but is the title or ownership of the artwork clear? Was the work handed down in your family to you through a will or is it, according to your siblings, jointly-owned by you and your brothers? Every year there’s at least one or two major stories of auction houses pulling property from an upcoming auction due to infighting in a family, a dispute over ownership or a court-ordered delay due to legitimate complaints about who has the right to sell a piece.
The next step for our collector is to ascertain a value for his artwork. He’ll be attending a few Bay Area auction house appraisal events (with a hopeful attitude) and sending Jpegs to auctioneers he’s identified online as having sold other works by the artist of the work in question. Fingers crossed and updates to follow!
SF Bay Area Appraisal Opportunities:
You can carry art and collectibles to the following companies to have a specialist inspect and value your property. Check the listed firms’ websites or call them directly for appraisal hours and any schedule updates.
Every Wednesday at Michaans Auctioneers in Alameda (michaans.com)
Every Thursday at Clars Auctioneers in Oakland (clars.com)
The first Wednesday of each month at Bonhams & Butterfields in San Francisco (bonhams.com)
Heritage, Sothebys and Christies auctioneers may host occasional local appraisal events, check their websites or email images to them.
Any views, opinions and experiences described or expressed by the writer are his own.