How to Buy and Sell through a Dealer
[This information comes from the ADAA website with their permission. You may read the entire unedited information on their website by clicking here.]
How to Buy and Sell Through a dealer
CINOA affiliated dealers are passionate about the art and artists they represent, and they are eager to share their enthusiasm with collectors. Good dealers consider time spent with beginners not only gratifying but an investment in the future. Engage a dealer in conversation about an artist or work you admire, and ask questions. Acquiring a work of art is a personal and genuinely rewarding experience, and clients can profit considerably from a good ongoing relationship with a dealer who has their collecting interests in mind.
WHAT'S IT WORTH? Many people think that auction results and Internet price guides are sufficient to determine the value of a work of art, but these guides rarely tell the whole story. The evaluation of a specific work depends on numerous factors, including quality, condition and evolving market conditions. Dealers can evaluate a work in the light of recent sales, both public and private. A good dealer will explain to you how a price was determined, and why a given work may be worth more, or less, than a seemingly similar example. CINOA affiliated dealers, who have years of experience dealing in their areas of specialization, are particularly qualified to price works correctly and have a vested, long-term interest in maintaining a stable market.
WHY SELL THROUGH A DEALER? CINOA affiliated dealers have spent many years creating a circle of collectors interested in their specialized fields. It is likely that these dealers will have among their clients some who are interested in buying the work you want to sell. Unlike an auction house, which is locked into a fixed sales calendar, a dealer can begin marketing a work from the time it is received. Sellers also have more control over the final price and conditions of sale when working with a dealer. The absence of arbitrary time constraints allows for a measured and effective interchange among the dealer, the seller and potential buyers. Dealers protect sellers with confidentiality and comparative privacy, avoiding the negative over-exposure that can occur at auction. Dealers work closely with sellers to accommodate their needs as well as changing market circumstances.
OUTRIGHT SALE AND CONSIGNMENT Outright sale to a dealer is the quickest method of deaccessioning art, but since the dealer must invest working capital without any promise of a quick return, the amount paid is usually less than could be netted from a consignment sale. Therefore, most sellers today prefer consignment arrangements. In such an arrangement, the dealer works on a commission basis or with a fixed net price, and the seller is paid when the work has been sold. Since the dealer is responsible for the work until the seller is paid, it is important to choose someone, like a CINOA affiliated dealer, whose reliability is assured. The cost of selling through a dealer is generally comparable to or less than selling at auction, and a competent dealer is often able to obtain a more favorable net outcome than would be possible at auction. In addition, dealers frequently absorb extra costs, such as photography, catalogue illustration and insurance, that auction houses routinely charge to the seller.
SETTING THE PRICE To determine a fair value, ask the advice of a trusted dealer. It is a good idea to get several informed opinions and to check prior auction results. Ask the dealer to explain the valuation strategy. There are many variables that affect price, and an experienced dealer can interpret both public and private sales results to accurately assess a work’s fair-market value. Bear in mind that it is in the dealer’s interest as much as the seller’s to achieve the highest possible price, but the market does have practical limits. A transaction can only be completed with a willing buyer, a willing seller and a price acceptable and fair to both parties.
ESTATES Estate beneficiaries are frequently best served financially by working through a dealer. A dealer can help collectors, executors and lawyers develop a strategy for achieving the highest price if a collection is to be sold, or for dividing a collection fairly among multiple beneficiaries. Often a collector’s heirs and legal representatives are less knowledgeable about a collection than the person who formed it. Collectors are therefore wise to involve a trusted dealer in their estate planning.