Buying Art: A Cautionary Tale
On a recent Sunday evening, I received a text message from a client who is an avid and active art collector. She was urgently requesting my opinion on the value of a piece of art that was to be auctioned the next morning. I was met with a moment of excitement, as well as slight panic. There were so many questions to be answered and much more detail needed to help her make a wise decision. I immediately called her with two important questions: Why this item and why now?
For the occasional buyer or new collector, I caution never to purchase under pressure or in a short time frame. My advice is to first educate yourself by visiting museums and galleries, reviewing magazines and online options, as well as viewing art in the home of friends. Become comfortable with your personal style and taste in art.
For the established collector, I would ask, “How does this fit into your existing collection? Is this a favorite artist or an opportunity you've been watching and waiting for?” Whether you are a first time buyer or an established buyer, here are some tips that will help to ensure your satisfaction and enjoyment in your art purchases for years to come.
What to know prior to purchase
Education about the artist includes knowing whether they are living or deceased and who is representing the artist – are they represented by a dealer, an estate, family or is the artist representing himself or herself? Also understand if this content is representative or in high demand and where the market is for this artist.
Knowledge about the piece itself includes the condition, whether it is signed and/or dated, the provenance (history of ownership), and if it is included in the artists' catalogue raisonné. Also ask if this piece is one-of-a-kind or one in a series, and find out about recent sales by the artist and sales by comparable artists.
Familiarity with the seller is also critical. Know their reputation and understand the terms of the sale – if the piece is found to be inauthentic, what is your recourse? Commission, written agreement for return, payment plan, extra charges for shipping and other incidentals should be outlined clearly.
Now that the prized piece is yours, how you care for and protect your art will directly affect its marketability and value over time. The material of the art piece will affect the way you care for it in order to properly preserve it over time. For example, organic materials will deteriorate and are best kept in an environment that has stable temperature and humidity. Rotating your art to allow a “resting” period is also recommended. Regardless of the material, I advise my clients never to display fine art in direct sunlight or near vents. And just as with any other major purchase you make, don't forget proper insurance.
Now it's time to think about your long-term plan for the art. Ask yourself if you would like to see this as a gift to a museum or charitable organization. This is common practice by experienced art collectors as a way to enhance their legacy and extend the enjoyment, education and history of the piece by sharing with others. Your heirs may or may not want your art, but a conversation on this topic will mitigate potential misunderstandings and add to your peace of mind. A trusted advisor can be a valuable asset in this process and your estate planning team has the experience and expertise to be an objective presence to help you and your family.
Current trends in art
Internet auctions can be a fun and exciting adventure, but it's still the “wild, wild west” for the business of art. And while increasing in popularity, the preferred method is still to purchase through more traditional sources. In fact, most collectors enjoy the hunt, the process and the relationships they develop while looking for art. Whether you're working with a dealer or an artist, it's all a part of the purchase and your story.
Another trend is the growth of international, regional and local art fairs. These can be intense entertainment events where the competition of trying to buy something before it's taken can lead to decisions that are too hasty. The same rules apply before you go to the fair – research which artists will be participating, current prices, ask for a “hold” on an item, get terms in writing and think about why you want to purchase.
One very positive trend we've seen lately is a heightened awareness about the importance of having an inventory. No longer just for museums and galleries, this practical and valuable first step can be an important piece of your comprehensive legacy or estate plan. Information should include an image, artist name, type of object, dimensions, condition description, provenance, location and any historical information available. While this can be a DIY project, most enlist the help of a professional to gather, document and inventory a collection.
Research, plan, purchase
Back to my client: On day of the auction, she decided to watch the online bidding but did not participate. The item sold at a premium price – more than she wanted to pay. She is patiently continuing the search for work by this artist to enhance her collection.
Regardless of whether she had taken my advice, I must remember that even the most experienced collectors can get caught up in the excitement of an internet auction, an international art fair or any of the current trends grabbing collectors' attention. However, if you keep a checklist of the information you need to know prior to making a purchase and have considered the long-term plan for this piece of art in your life, it's unlikely that you'll regret the decision you've made.
Jan Leonard is senior vice president and managing director for charitable trusts, private foundations and fine art services.
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