18 September, 2019
How do I know if I’m paying a fair price when I buy art? Can I afford it? Will it be a smart investment?
When it comes to evaluating an art investment, it’s essential to take into consideration many tangible and intangible aspects that influence the appraisal of the artwork. The art market is a peculiar field where the opaqueness of information and high entry barriers sometimes make art collecting difficult, in particular for those who are not familiar with the system. Nevertheless, through research, professional guidance and a good dose of passion, it will be possible to make reasonable and also remunerative decisions.
London Trade Art is creating a guidebook on art investment, “ABC’s of art evaluation”, which aims to provide a compelling manual on the complexity of art appraising for anyone who wants to better understand the art industry, as well as giving advice on how to recognise a smart art investment, even with a tight budget. The guidebook, which will be available for download soon, will be composed of three chapters, each focusing on a specific aspect which influence the value of artworks:
A. Artworks: What to look for when buying art?
B. Biography of the artist: What does the artist’s curriculum tell about an artwork?
C. Contemporary Art Market: Which are the current trends and how do they influence the market of a specific artist?
This article is intended as an abstract of the first chapter, A. Artworks: what to look for when buying art?, focusing on the identification of some of the most objective characteristics of artworks, recognition of which can help the collector to autonomously appraise them.
On one hand, it will investigate the relevance of the tangible features of the artwork: the size of the work; the period of production and the importance of the technique and medium chosen by the artists. On the other hand, it will be taken into analysis the impact of all the external elements, including the documentation, which have an influence on the price of the work: the condition report and the certificate of authenticity; the relevance of the previous owners; the catalogue raisonné; the record of solo or group shows, where the work has been exhibited and, finally, the subject and story behind it.
However, before analysing the artwork’s features which influence its market value, it is first useful to consider which kind of artists to buy:
Artists who have reached a mature stage in their career and have created an extensive body of work, are considered established. They are often represented by influential galleries and have international recognition, having been exhibited in famous shows and having taken part to the most important art events, fairs, and biennals. Established artists are the so-called blue-chip artists, such as Picasso and Warhol, whose works have the highest value on the market and will likely hold it over time. Being very stable on the market, in fact, critics believe their quotations will keep rising unstoppably, thus guaranteeing a safe investment, even if expensive. Therefore, collectors will be willing to pay not only a certainly high quality artwork, but also the popularity of the artist, whose name itself represents a warranty. According to Artnet in 2017, 25 artists alone were responsible for almost half of all Post-war and Contemporary art auction sales at the time.
Prints & Multiples by established artists
Prints and multiples refer to a series of identical artworks, usually a limited edition numbered and signed by the artist. A multiple is often a draft or a sketch made by the artist in preparation to the final work and, even if sometimes it serves as a copy of an original artwork, it is still considered a work of art with a certain value, as for example drawings or lithographies by established artists, such as Chagall, Calder or Mirò. Prints and multiples represent an increasingly more appealing market, giving the opportunity to buy a high quality artwork by the most renowned artists, without spending a considerable amount of money. Depending on the number of prints the artist makes of one work, the significance of the work; the condition of the print, it can represent an investment as well. Furthermore, being associated to such masters’ names, the prints market value is also very stable over time. It is even possible to find prints & multiples online, as in the London Trade Art marketplace.
A young artist, with generally a limited production and less than five years of experience, is considered emerging. Emerging artists usually have shown in a limited number of exhibitions and are often independent artists, not yet represented by a gallery. They are usually just graduated from art school and are still maturing their research. From a market point of view, emerging artists’ works are usually less expensive than mid-career or established artists’ works. Emerging artists, in fact, set usually the prices by themselves, without the involvement of middle-men or galleries, whose fees would increase the final value of the pieces. In this case, the price of the pieces is usually low but they can potentially multiply their value in a few years. For this kind of purchase, timing is essential: it is important to buy early, and, most importantly, sell at the right moment. A good example is represented by artist Lucien Smith, who was selling works for around $10-20,000 in 2012 in small galleries, reaching $200,000 at auctions only after two years. Nevertheless, investing in emerging artists is high risk: the market is not stable yet and the increase in value could be affected by many variables, hence it is very important to be properly advised by professionals who can support collectors to recognise the most promising talents.
Appraisal of the artworks’ characteristics
Once decided which kind of artist is of interest, it will be necessary to also take into account the following factors:
- Artworks’ size and medium
Be aware that size matters in art! The size of the artwork is one of the most objective aspect to take into consideration when evaluating it. Undoubtedly, works of art of considerable size represent a certain level of skill that often adds value to a work. Conventionally, in fact, the bigger the artwork is, the higher the price is, usually because of the degree of difficulty incurred. However, even small artworks can have great value. To help determine the value it’s also important to examine works within the same medium. Generally speaking, works on canvas will always sell for more than those on paper. Painting, in fact, is still the most expensive medium, nowadays generating million-dollars sales records. The only other medium capable of generating similar prices is sculpture, driven by the big names of Contemporary art such as Takashi MURAKAMI and Jeff KOONS. For example, on the 15th of May 2019, a 3-foot-tall stainless steel sculpture reminiscent of a silver balloon animal, “Rabbit”, by Jeff Koons, was sold at Christie’s New York for the breaking record price of $91.1 million, officially representing the world's most expensive work by a living artist. However, Jeff Koons works in a variety of media and the impact of his signature is much more powerful than the medium he chooses to work with. According to art expert Michael Findlay, “depending on the medium used by the artist, there may be a cost of manufacture to consider. For example, in 1895, Auguste Rodin had to pay Le Blanc Barbedienne Foundry in Paris when he cast his Burghers of Calais in bronze. Today Richard Serra had to pay Pickhan Unformtechnik in Siegen, Germany for fabricating his vast steel Torqued Ellipses. These costs are passed on to the first buyers of the work”.
Francesco Irnem in his studio
- Conditions and quality of the work
The condition of the artwork is one of the most important factors in assessing value and it plays a major role in defining the final price of the piece, alongside its quality. Any modification of the appearance of the artwork, which has altered the original conditions, can affect the value of the work. Also, restorations can influence its market appeal, very often in a negative way, decreasing the value of the artwork. Needless to say, pristine conditions and artworks without restoration are highly desirable. If the piece was produced many years ago and it had changed a few owners during the time, it’s always recommended to ask the previous owner or the representative gallery of the artist for a condition report which is a document itemizing the result of the physical examination of an artwork by a professional in the field. The more detailed the condition report is, the easier it will be to keep track of any change in the physical condition of the artwork and its attendant structures (e.g. frames, pedestals, hanging equipment, etc.)
Aside from the physical conditions, there is another aspect to be taken into high consideration: the quality of the artwork, which refers not only to the aesthetic and ideological significance that the artwork covers within the whole artist’s production, but also to the quality of the materials which can affect the value as well.
When considering buying an artwork on the secondary market, it might be important to collect some information about former owners, who may strongly influence the value of emerging or contemporary artworks, more than masterpieces or old masters’ paintings, whose value is more objective and determined by their own merits.
On the other hand, if the artwork has never been sold before, for example when buying directly from the artist on the primary market, provenance is not a valuable aspect, so it will be important to transmit all the due information to any possible future owner to enhance the value of the piece. Nowadays, information about provenance may be found by looking at public sales records, such as Artnet’s price database. In addition to public renowned databases, there are few startups which aim to introduce new digital tools to geographically track the artworks, also providing detailed information about their provenance, helping to bring more transparency and accessibility to this kind of information. Among them, are the projects ArtID and Verisart.
The degree to which an appealing provenance may actually increase the value of a work is very difficult to establish accurately, but an evaluation of provenance, being the chain of previous owners of the piece, is important to determine questions of authenticity, too.
- Documentation (certificate of authenticity and catalogue raisonnè)
Before buying art, every collector should also request the documentation of the piece, in particular the certificate of authenticity (COA), which is an essential document of authorship that protects both buyers and sellers. It must include the title of the work, the date of its creation, the name of the artist and various technical details (support, dimensions, number of copies made, materials, photo of the work, etc.).
Buying directly from contemporary artists could be easier, as most of them will be willing to provide a document which certifies they are indeed the authors of the piece. The artist’s signature or certificate also represents the highest proof of authenticity. It’s more complicated when buying an artwork by a deceased artist, as the certificate of authenticity is not always available and very often it might not be signed by the artist. In this case, the collector might refer to a due diligence on certificates from the artist’s family, expert opinions, gallery certifications and written representations from the seller. Also, one the most useful tools in determining how many paintings an artist has made of any particular type, is the catalogue raisonnè, as it contains the list of an artist’s entire output. The publication of a catalogue raisonné may have a strong effect on the value of an artist’s work because it defines the supply empirically and provides the basis for reasonable assumptions regarding whether any particular work might be available. For example, when Warhol died in 1987, he was highly celebrated, and paintings of his most publicized subjects commanded high but not spectacular prices. The first two volumes of his catalogue raisonné appeared in 2002 and 2004 and covered just eight years of his work (1961-69). Almost immediately prices increased, because there finally was an official catalogue that certified which artworks were undoubtedly produced by the artist.
In this field, archives and foundations play a major role in evaluating the authenticity of artworks by a specific artist, even though there are often disputes due to inheritance issues or professional disagreements. Nevertheless, today there are visionary projects which are bringing more transparency to this complicated sector. One of them is TagSmart which aims to enable artists, galleries, agents and collectors to catalogue artworks, build provenance history, through a digital inclusive platform.
The Andy Warhol Catalogue Raisonné. Courtesy: Phaidon
- Period of production
It is often thought that every artist has a period of production during his/her work life considered better than others. Depending on the period of production, the value of the artwork might significantly change. For some established artists, youth production can represent the period of maximum inspiration and experimentation, thus corresponding to the highest valued production of their careers. In other circumstances, most matured productions are considered the most representative of the artist’s work. For few others, the whole production is taken into consideration, without distinction of periods.
The market appeal of works of a specific period is valued not only on the quality of them, but also on their availability on the market: usually, the fewer the artworks, the higher the prices. For example, works by Picasso from the earlier era, referred to as his “Blue Period” rarely come to market. In addition, they are in demand by museums and important collections. Because of these two combined factors, rarity and demand, when a Blue Period painting does appear for sale, its price is very high. Obviously, the case is different for emerging or contemporary artists, whose production is just at the beginning and whose market price is defined by different characteristics than the period of execution.
- Exhibitions records (group or solo, local or international)
To understand the value of an artwork, it is also important to take into consideration how many times and where it has been previously exhibited. If an artwork took part in prestigious exhibitions before being sold on the market, its value could increase.
Preferentially, it should have been shown in at least one of the artists’ solo shows. If it took part in group shows. In particular, if the artist is emerging, then it’s important to evaluate the other artists that exhibited in the same show and the general quality of the exhibition. Moreover, participation in international shows, instead of local events, as well as exhibition during fairs, biennials, museums or any other high-profile event, might bring more value to the work. The more renowned the artwork’s record, the higher is its market value. It is slightly different when considering buying an artwork by an emerging artist with a very limited curriculum of exhibitions. In this case, in fact, there are not objective parameters to evaluate artist’s career, yet.
The influence the exhibition of an artwork can have on the sales market was evident during an acclaimed Christie’s auction sale in London in 2007 in which the triptych Three Studies for a Self-Portrait By Francis Bacon (1980) was sold. The painting was never exhibited in any important shows before and it was sold by the artist to a family from Northern England in 1982, who contacted Christie's for sale in 2007. The triptych traveled on a promotional tour of Europe with high expectations, also because, in November 2005, another triptych was sold by Sotheby's in New York for $5.8 million. Nevertheless, the result of the auction was disappointing, as, after only 3 bids, the work was sold for £3.5 million, just reaching the minimum estimate (£3.5/£5.5 million). This occurred because the work, although important, did not come from a prestigious collection, neither had it ever been exhibited in a large museum exhibition.
- Storytelling of the work subject
The choice of a subject by an artist may tackle an important element in art appraisal. In fact, although it’s a matter of taste, sometimes certain subjects sell more than others, therefore increasing the value of the piece. For example, female nudes or portraits of historical characters may be favored than other subjects. This is the case of Modigliani’s works: his paintings depicting female nudes are the most sought after, hence the ones with the highest market value. The two most expensive Modigliani’s works sold in auction, in fact, are both artworks that form part of a series of 22 reclining nudes painted between 1916 and 1919. In May 2015, Sotheby’s New York sold the "Nu couché (sur le côté gauche)” (1917) for $157.2 million, the highest auction price in the establishment’s history, going for nearly six times the painting's last purchase price in 2003. Six months after, in November 2015, the price record was broken with the sale of another nude at Christie’s New York: "Nu Couché" (1917-18) was bought by the Chinese billionaire Liu Yiqian for $170.4 million, becoming the most expensive work sold in auction at that time - funny fact: he paid using his AMEX! -.
It is also important to consider, in particular for a beginner collector, that the choice of a specific kind of subject might also be the trait d’union of a collection, defining its quality and identity and enhancing the whole value during its growth. It’s not only a matter of market trend or tangible characteristics. The subject, most of the time, tells the story behind the artwork: why did the artist choose that specific character? What kind of relationship connected them? How did the market greet the work at that time? The subject of an artwork is often able to give answers to these fascinating questions, creating the storytelling of the work. Even with emerging artists, the storytelling of a piece and the relevance of it within the entire production are essential when thinking of buying it. For example, if the artwork was created during a particular research period, under specific circumstances and for a specific reason, it will likely be a relevant piece within the artist’s work life.
Amedeo Modigliani, Nu couché (1917). Courtesy: Rex
It is now becoming clear how evaluating art can be complex, as it refers to a combination of multiples aspects, some of them more tangible and evident, as the ones analysed, and some others less tangible and more subjective, as taste, risk-taking propensity, ethics, and, of course, budget at disposal.
If you want to discover more, stay tuned for new abstracts from LTArt’s guidebook “ABC’s of art evaluation”.
Francesca Casiraghi - September 2019