Auction fever

The beginning of autumn may be associated with that “back to school” feeling but in the art world it also brings with it a buzz of excitement and anticipation, marking the start of the auction season. The sales at London’s major auction houses offer something for everyone and from everywhere, be it paintings or prints, rugs or jewellery, from the Middle East, Africa, Asia and beyond. Bidders attending the auctions in person can experience the drama of a night at the theatre. If you are tempted to bid at one of the sales but have never done so before, what factors should you bear in mind? Here are some tips.

1. Look before you buy

All the auction houses (e.g. Sotheby’s, Christie’s, Bonhams, Phillips) display the items (lots) up for sale in their viewing galleries for several days before the auction takes place. Anyone can walk in and view the exhibitions – no appointment or invitation is needed and it is well worth doing so, for a number of reasons.

Firstly, it is an opportunity to see for free beautifully displayed works of art which are often of museum quality. Some of these may not have been seen in public for many years if they have been in private hands, so even if you do not bid, this is a chance to catch a glimpse of these works before they are sold to someone else.

Secondly, and importantly for all bidders, lots are generally sold on the basis that prospective buyers have inspected them in person before the sale. While a photograph in an auction catalogue or on the website can give you an idea of what a painting or piece of furniture or jewellery looks like, nothing beats seeing it with your own eyes. Bearing in mind that some of these items will be antiques or painted several hundred years ago, they may not be in perfect condition, but having seen them for yourself, you will be able to make an informed decision as to whether it is something you want and thus avoid disappointment later. Moreover, it can be great fun to ask to handle jewellery you are interested in, or to get down and inspect the underneath of a table, something which you see happening quite frequently and which the auction houses encourage. Indeed, the auction houses’ conditions of sale, while not identical, all expressly state that bidders should inspect lots before bidding and convey the fact that lots are sold “as is” which effectively means, in more colloquial language, “warts and all”, so you must accept the condition the lots are in at the time of the auction.

2. Know your budget and be ready to pay

If you have decided what you would like to bid on, it is important to be clear about how much you are actually willing to spend on the lot in question. The estimates in the catalogue will give a guide but it could be that the low estimate is in fact your limit, or that you are willing to go much higher. Either way, bear in mind that the price at which the auctioneer knocks down the lot at the sale, known as the “hammer price”, is not the final price you will have to pay, because on top of this will be charged the auction house commission, known as buyer’s premium. In addition to this, VAT may be charged.

The buyer’s premium rates vary depending on the auction house and may also be staggered (so that, for instance, on a higher hammer price, the buyer’s premium may be less). The applicable rates will be set out in the catalogue or shown on the website, so it is important to check them, since if you are the successful bidder at a hammer price of, say, £10,000 at the auction, you could well find you are expected to pay around 25% commission on that figure, so you should budget for at least £12,500, and also consider whether any VAT is payable. This will usually be indicated by small symbols next to the lot in the catalogue.

If you are the successful bidder, then a contract will have been formed between you and the seller when the auctioneer brings the hammer down, and you will be expected to pay promptly, which is why it is a good idea to understand and work out in advance how much you are in a position to pay. Moreover, the sooner you pay, the sooner the lot is yours!

3. Keep focussed during the sale

There are a variety of ways you can bid: attending the sale in person, on the telephone or online. It is easy to get swept up in the excitement of the auction, but a cool head will serve you well. The pace of the auction can vary, so you need to be ready when your lot comes up, and stay alert when the bidding starts, so that you can follow what the auctioneer is saying, including any particular notices about the lot you are interested in, and also what the person at the other end of the telephone is saying to you (if you are bidding by telephone). Getting distracted can cost you, because the auction houses are unlikely to accept an excuse about not meaning to bid on a lot as a reason not to pay, and will certainly reject the more creative excuses which have been known, such as falling asleep on the keyboard while bidding online!

4. Read the Conditions of Sale

If in doubt about any aspect of the auction process, a good place to start is by reading the terms and conditions of the auction, which will be printed at the back of the auction catalogue for each sale and will also be shown on the auction houses’ website. The more you understand these, the more comfortable you will feel about participating, and the more enjoyment you are therefore likely to derive from the pieces you buy. Good luck!

If you require legal advice, please contact art law specialist Lisette Aguilar using the details below.