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Going, Going, Gone!

Before Auction Fever Sweeps You Away, Make Sure You Know What You're Buying
Andrew Decker
From the Print Edition:
Michael Richards, Sep/Oct 97

The temperature in Christie's wood-paneled auction room has climbed a notch. A third bidder has just waded in for a run at a Claude Monet painting of water lilies estimated to sell for $8 million to $10 million. A Texas real estate developer has already dropped out at $5.8 million, and a dealer who has flown in from Switzerland for the standing-room-only evening sale has been left behind at $6 million. Across the room from the press platform, casino mogul Steve Wynn confers with his dealer on whether to keep going, shakes off the advice and plows ahead at $7.7 million. Another Swiss dealer has stepped in and out and, within a couple of minutes, the lush, trademark painting has sold for $13.2 million.

After the auction is over, international dealer David Nahmad says that the most remarkable aspect of the night was that so many people had wanted the painting--just one of scores offered--that $125 million was chasing it that evening.

When a Monet or some other popular artwork is up for grabs, an auction can be an exciting, breathless event, such as the Christie's sale held last November in Manhattan. Money. Celebrities.

But the fact is, auctions are usually deadly affairs, about as much fun as watching a greyhound race with no scorecard and no betting. You can't usually see who's bidding, don't know them if you can, and have to sit through scores of objects you don't want to get a shot at something you do, if you're even one of the players.

If that isn't enough to give one pause, consider the auction of 200 or so paintings and works on paper by everyone from Edgar Degas to Jasper Johns that was slated for last February in Pompano Beach, Florida. The auction was dissolved when experts declared that most of the artwork was fake. Even auctions at Christie's and Sotheby's can be a little scary. Neither house guarantees the authorship of paintings they sell that are dated prior to 1870.

Auctions have been around for millennia, so what's the problem? Nothing, if you're a pro and you know where you stand. The rest of us have to be more cautious.

In theory, auctions are simple. Somebody who wants to sell something goes to an auction house, which acts as the seller's agent. The auction house's staff does some research, describes the object in a catalogue and holds an exhibition. Buyers and shoppers come by, check things out, make some notes, return for the sale, register to buy and wait for the item to come up on the block. Auction houses make money by getting a commission from the seller and a premium from the buyer. At Christie's and Sotheby's auctions, the buyer pays a 15 percent premium on the first $50,000 and 10 percent on the rest; the commission from the seller can vary.

A piece of cake, except for the pitfalls of authenticity, condition and ownership. Is that Dalí print you're interested in actually by Dalí? Is it an etching or a photo-mechanical reproduction? Are the white margins around the image full, or have they been cut down to almost nothing? Has it been well cared for? Does the seller have the right to sell it?

The answers may be obvious to people in the art trade, but the layman must do his homework. That may mean hitting your local library or bookstore, or hiring a conservator or a dealer to examine the object of your affections before you step into the bidder's circle. In 1987, for instance, a Swiss woman belatedly discovered the importance of such legwork. After buying a painting by Austrian Expressionist artist Egon Schiele at Christie's in London for $495,000, she learned that an ambitious restorer had reworked the painting, leaving a mere 5 percent of Schiele's original paint on the canvas. She asked for her money back, was refused, and sued. Christie's defended the painting, saying that even if a restorer had reworked it almost completely, Schiele's idea for the painting survived. The firm lost.

At a Pennsylvania auction in 1989, a man paid nearly $30,000 for a painting that was probably worth more than $200,000. What a steal! And it was: the painting, a 300-year-old Roman oil that had been attributed to Corrado Gia Quinto, had been ripped off decades ago. The previous owner's descendants eventually tracked the painting down, and the buyer had to hand it back. The buyer, who spent four years restoring the painting before he found out that it was stolen, is now trying to get his money back from the auction house and the seller, but the lawsuit may drag on indefinitely. He may never recover what he paid, much less the $200,000 he expected to realize.


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