In my last article I wrote about my auction experience with “March in Montana.” Some of you may have noticed my max bid was $1,200 when I said I had a budget of $2,000. If I really wanted the painting like I said I did, then why did I not bid the entire $2,000?
I feel this is a good time to bring up auction fees, such as buyer’s premium.
What is buyer’s premium?
The buyer’s premium is charged on top of the hammer price by the auction company. The premium goes to the auction house to cover their expenses and generate their profit. Typical buyer’s premium runs from 15% to 25% of the hammer price. This means that if I bid $100 and win the lot, and the buyer’s premium is 15%, I will pay $115 for the lot. Fifteen dollars does not seem like a lot, but the same 15% is applied to $1,000 to upwards of $500,000.
15% of $500,000 is $75,000.
The onsite premium at “March in Montana” this year was 18%. So, if my max budget is $2,000, that must include the premium as well. That immediately lowers my overall high bid of $2,000 to around $1,700.
Since I was physically at the auction and was able to take the painting with me, shipping was not needed. That would have been another cost to take into consideration that would cause me to reduce my max bid.
You also may be wondering where I came up with the $1,000, then $1,200 in the photo to begin with.
For that we must go:
Back to the Auction!!!
Lot 175 was a 36”x36” oil on canvas painting by George Flett, (Spokane, 1946 – 2013), titled Artist Grandfather, with an estimate of $1,000 – $1,500.
Once I realized I wanted to try to buy lot 175, I had to determine how much I was willing to pay.
The first thing I had to determine was how valid I think “March in Montana’s” estimate was.
Having dealt with them in the past, I felt comfortable in their ability to provide a fair and reliable estimate. Having said that, however, I always do my own research.
How to research auction estimate prices
Here are some things I did to research my opinion of the painting’s value. Each one could have a had a positive or negative impact on the total amount I was willing to spend.
- Look at what similar works by the artist have sold for at auction in the past few years. (Most websites that provide this service charge a fee. However, if you are willing to dig on the internet, you can usually find the information for free.)
- See if those results are in an upward or downward trend.
- Research any important information or news about the artist or painting.
- Check the provenance.
- Check and verify the physical condition of the piece of art. (The provided condition report is helpful, but it is no substitute to inspecting the painting yourself.)
When I looked for previous auction results, to my discontent, I did not find other pieces like it. The artist is known for his ledger art, like that found in lot 176. Because he was more prolific in that style, the estimate on that lot appeared accurate since I could find corroborating auction results.
From my research, I could not confirm the auction company’s estimate on this painting, but as I said before, I am comfortable with their estimates due to past experience with them.
The artist himself is not necessarily on an upward trend, but works in a similar style are.
If you read my article on Fritz Scholder’s latest auction results, then you know what I mean. Fritz Scholder, (Luiseno 1937 – 2005), was an instructor at the famous and influential Institute of American Indian Arts in the 1960’s when George Flett was a student.
While the catalog did not state the provenance of the painting, with some inquisitive searches on Google, I was able to ascertain who one of the previous owners was and even found a photo of it hanging it their house.
Since I could check off all the boxes above, a bid on the high estimate side, if not even a bit over, seemed to be in store with that of my desire to own the painting.
How to bid at auction
From my notes, you can see I originally planned my max bid to be $1,000. So why the change from $1,500 (the estimate’s high end) to $1,000 when all the boxes above were checked off?
The reason for the drop is I saw two things in the online photo that made me hesitant, and I needed to see it in person before committing the full amount. They were not dealbreakers, just concerns.
Once I arrived in Great Falls, I confirmed that the two issues I saw in the photos were an illusion caused by the flash. After seeing the painting in person, I also thought about adding a frame versus keeping the gallery wrap. I would need to set aside $300 for the frame.
After synthesizing all the information I had obtained to this point, I decided to raise my final max bid to $1,200.
If my max bid was $1,200 for the George Flett painting, the buyer’s premium of 18% would add $216. I also wanted to add a $300 frame. In grand total, the painting would cost me $1,716 dollars. After all my research, it was a number I liked and would have felt comfortable paying.
When lot 175 came up, I bid up to $1,200 and it quickly kept going up and up. It ended up selling for $2,250, not including the buyer’s premium.
As I said in the article, I was disappointed in not winning. One, I really liked the painting. Two, I like to win. Having said that, knowing I bid up to the amount I was comfortable with, I gave it my best effort.
The same guy who said, “You can’t win them all,” I mentioned previously, told me the next time I saw him, “There is always another one.”
Which reminds me, the “Scottsdale Art Auction” starts April 9th.