Art auctions are a wonderful place to find collectibles that you are passionate about. Not only is it fun to participate in a live auction from the comfort of your home, but it is also quick and convenient at a time when restrictions are in place. With online auctions, regardless of where the sale takes place, you won’t miss the action.
To help you master online bidding, we gathered vital tips and advice directly from Petros Michaelides, a veteran art dealer and auction bidder, the co-founder and head of Peter’s Gallery.
The trick is that auctions vary widely, and bidding styles differ even further from person to person, so finding your own style can only be achieved through experience. That said, novices often make certain mistakes that lead to overpayment for works or losing their artworks due to lack of knowledge. For those wanting to sharpen their skills before the next sale, here is a basic guide to effective bidding—with a few tips to help navigate any auction.
Research is critical when bidding at auction, because knowing exactly what it is you are bidding on—and how aggressively to bid on it—are the cornerstones of collecting. If you feel that your knowledge of the medium is limited, find an expert you trust and discuss the lot with them. Most dealers and specialists are happy to give their advice on a work. The best way to find an ethical expert is by asking more experienced collectors who they like to work with, and who they trust for information. Another great resource is a price database where you can look up auction records for comparable lots. Most of the free services only offer limited records, which can be misleading. Don’t skimp in this area; pay the annual fee for a reputable database.
Call the artist’s gallery and find out if the work is available on the primary market first. Surprisingly, people frequently pay two or three times the current retail price at auction for a work, which is available from the gallery. If the gallery tells you the work is sold out, ask what price the last piece in the edition sold for and when the edition was closed. This gives you a sense of how desirable the work is and how much time it has had to appreciate. Finally, when deciding how much to spend, take into consideration the additional charges. This includes sales tax, the buyer’s commission, and shipping fees.
Your research is now completed, you understand the artwork you’re bidding on, and you’ve got a good idea of how much you want to spend. How do you bid? The most favoured way to bid is with an a proxy bid (automated bidding). Collectors in a live online auction can easily get caught up in the excitement of the event and pay more than they originally intended. With a proxy bid in place, you can bid the exact amount you calculated and receive priority in the case of a tie with a live bid. I would also recommend you select a top price threshold that is one increment bid above what you would normally pick. For example, if you want to spend around €1.000 on a lot, put your proxy bid in at €1.100. People tend to think in whole numbers, and that extra little bit could make the difference between winning a lot and a tie bid. Every lot has a reserve price (usually) and an estimate.
Before getting into the bidding process, understand that the estimate is simply the price range of what the auction house believes the work will sell for, and that the reserve of the artwork can not legally be revealed by the auction house—but it can’t be greater than the lower number of the estimate. For instance, if a work is estimated at €1.000-€1.500, the reserve will be €1.000 or less. If you are the only bidder on a lot, the auctioneer will bid against you until they reach the reserve price. This is referred to as chandelier bidding. Although, in the moment, this may seem like the auctioneer is trying to make you pay more, they cannot sell the work below the reserve. This is a common practice at auction and nothing to be concerned about.
If you trust your ability to stay focused and think you won’t get caught up in the bidding, you can take part in the auction with full confidence. Most art dealers bid very subtly. Dealers prefer that because they will ultimately be reselling a work at a later time. For a collector, this doesn’t really apply. In the case of a new collector, especially, if he / she is not accustomed to the different styles in bidding on an online auction. Some like to jump right in at the beginning of the lot and bid until they reach their limit while others like to sit back and wait for the bidding to slow down before placing their bids, and again others like to bid at the last minute. Experiment with your style and see what works best for you — as long as you don’t wait too long and miss your opportunity to bid.
In the end, auction is the closest gauge we have for valuing a work of art. Anything can happen in an auction when you get the right people passionately going after the same thing. Do your research and try not to get caught up in the excitement. In the end, you can pay a fair price for a work you love.
Good Luck and Happy Bidding!