Going, Going, Gone!
Before Auction Fever Sweeps You Away, Make Sure You Know What You're Buying
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.
Nightmares like these are infrequent--the lightning strike, statistically, is nearly insignificant. But no one wants to be the unfortunate statistical anomaly. Some collectors, and nearly all dealers, say that these kinds of stories underscore the greatest flaw in buying at auction. The auction houses are agents, and some of the less reputable ones offer no liability for title (though, by law, they must in New York), provide little or no guarantee that what they've described is what they're selling, and make no binding representations about condition.
Then, there's the bidding. "One more?" It's a question auctioneers often pose to buyers about to drop out of the bidding. (As if one is enough.) Many people, having breached the price limit they've set for themselves, find their egos lifting the paddle again. And again. They want to win.
A few years ago, Christopher Hartop fell in love. The object of his desire was a poster for sale at a small country auction house in upstate New York, where Hartop has a weekend house. The poster wasn't famous, or expensive. No original King Kong image, or Alphonse Mucha woman dripping in Art Nouveau garb--the kind of things collected by people around the globe. The poster showed an old tow path along the old Delaware-and-Hudson Canal, near his country house, and he wanted it. He figured he'd get it for "around $20 or $30--something like that," Hartop recalls.
It was just the thought another man had, and before Hartop knew it, he was in the midst of a bidding battle, with the bids flying back and forth like a Ping-Pong ball as the bidding passed $100, then $200. Hartop won the lot, but doesn't remember exactly what he paid. "It was two hundred and something dollars," he says, far more than he wanted to pay. An insignificant amount in the world of multimillion-dollar auctions, but Hartop is not your usual bidder. He works at Christie's, where he's charged with finding, researching and presenting other people's silver objects. He's also an auctioneer, whose main goal is to help people remember just how much they want something. At the country auction, Hartop says, "I made all the mistakes a beginner makes. I didn't have a clear idea of what it was worth, of how rare these things were." Yet his embarrassment over the bidding war has been tempered with time. Talking about his poster now, he says, "I still love it. The price seems like chicken feed now. It happens to everyone."
And sometimes that extra bid makes all the difference. Paula Webster, a publicist in New York, recalls going after "a pair of beautiful bronze lamps, full of body. I paid something like $150 for the pair. Maybe $250 for the pair. And I was just delirious that I got them--I couldn't stand it. I always felt for another $25 I got this and the other person didn't, and it was a triumphant kind of feeling. It's just delirium inducing. It's a kind of excitement that's just not available in other places. There's just something about it. Maybe it's the risk-taking, or the unknown."
Or, simply, the rush of winning. That particular kind of excitement and the lure of a bargain are what make auctions so popular. It's a taut, exalting process, filled with inherent tensions. The seller hopes for a high price. The buyer looks for a bargain. Two people want the same thing, which is unique, rare or, at the least, no longer being made. And, of course, there is the tension between cost and desire felt by the bidder.
Exciting. And yet most of the time, so dull. Hartop says that unless he's the auctioneer, "I find auctions boring." Seasoned auction shoppers bring a book or knitting or a crossword puzzle to get them through the countless things that come up before the auctioneer gets to the one thing they want. If they're price junkies, they might follow the bidding on each lot, jotting down prices in their catalogues, storing away the information for comparative shopping later on.
And yet, whether you're a serious collector or casual shopper, auctions are indispensable. Even though auction houses like to tell sellers that they get retail prices, they usually don't. Many of the buyers at Christie's or Sotheby's, and many of the buyers of finer things at country auctions, are dealers, who take their prizes back to their stores where you can buy them at a markup.
Often, too, auction prices are cheaper than what you pay at retail stores for new objects. Hartop's colleagues at the less pricey Christie's East sell silver teapots for hundreds of dollars, while new ones bring thousands at Tiffany's. The same is true for engagement rings, paintings, European furniture or scores of other categories that stimulate the billion-dollar auction trade.
Quality and style are other reasons to buy antiques, which are often simply better made, or more appealing, than their contem-porary counterparts. Assuming it's in decent shape, a 1920s chest of drawers that has fluting and inlay and the intangible glow of patina might go for $1,000 at auction, but a fine reproduction will cost more and still not be as well made.
How can you prepare for the auction buzz? Some houses, like Christie's East and Sotheby's, periodically hold mock auctions to give newcomers a chance to get the feel for the process--the anticipation, jumping in early on the bidding to make a statement, waiting until other bidders might have played themselves out, the feeling of losing and winning. Participation is more expensive, but most anyone can sit in on all but the glitzy evening auctions, where tickets are doled out to established customers. Attendance is always free, though catalogues (scorecards, if you're a spectator) usually cost around $40.
Other methods of preparation include going to bookstores and libraries. A buyer should also look things over at the pre-auction exhibitions. Leslie Hindman, of Leslie Hindman Auctioneers in Chicago, admits to littering her home (and those of her friends who enjoy dorm-style decorations) with "mistakes," including a Japanese screen that looked beautiful on the auction stage but turned out to be "ripped to shreds" when she unpacked it at home. Her mistake: buying without inspecting.
Hugh Hildesley, an executive vice president at Sotheby's and author of The Complete Guide to Buying and Selling at Auction (Norton & Co., 1997, $25, 223 pages), says that authenticity and condition are the most important concerns of auction buyers. "If you fall in love with a piece, then talk to a specialist [at the auction house] to see if your love is well founded." Specialists will tell you why they attributed a particular work to a particular artist, craftsman or period, why they've set the value where they have, and to what extent the object--whether it's a painting or a piece of furniture--has been restored. "One does expect a 200-year-old chair to be reupholstered," Hildesley says. "Before an American furniture sale, everyone is poring over everything in the exhibition inch by inch. If you're going to be a collector, that's part of the territory."
How undignified. Just imagine a group of grown men and women in suits or tweed jackets on their hands and knees--or backs--as they check the joinery of an eighteenth-century table. You'll hardly make a pretty picture, but it's far more palatable than learning five years later that your bargain was neither cheap nor old.
Buying at auctions is easy--just lift a finger--and can be thrilling. Buying well, on the other hand, is time-consuming, laborious and sometimes dirty work, with hours at museums or antiques shops, in libraries or with yet another badly written catalogue on your lap. You must train your eye and mind so that the glare of a reproduction is instantly apparent: these are the hidden costs of buying at auction, the parts of the game that people don't talk about at cocktail parties or in the media when they discuss their great discoveries or bargains.
They also become part of the joy. The lasting pleasure in auctions is found not only in the chase and the bidding but in the process of studying and looking, of learning to temper impulse with deliberation.
At a Christie's auction in London on June 5, two men battled for the right to pay almost $25,000 for a box of 50 1492 cigars, extremely rare Cuban corona gordas made in 1992 to celebrate the quincentenary of Columbus' voyage. The winning bid of £15,000 ($495 per cigar) was the most ever paid for cigars at a commercial auction. That the previous record was just three weeks old--on May 18, a box of 25 Trinidads, Cuba's most fabled and elusive brand, fetched $456 per cigar at a sale in Geneva--is a sign of a bullish market that's looked more like the soaring Dow Jones than the sleepy, almost nonexistent premium cigar market of just five years ago.
"At the end of the bidding, I brought the hammer down and the room burst into applause," says Paul Bowker, the Christie's auctioneer who conducted the Trinidad sale. "When I called out the winning bidder's paddle number, he looked up and said, 'What did I pay?' I got the impression price wasn't an issue."
Fortunately for those to whom price is an issue, terrificsmokes can be had at cigar auctions for prices that are less than record-breaking.
In the early '90s, hardly anyone outside a tiny circle of British connoisseurs knew that cigar auctions existed. Every now and then, Christie's of London would auction a few boxes of Cuban cigars; they would sell for roughly their retail value. Bowker remembers when fewer than 10 people regularly bid on the odd box of Havanas. Now, more than 100 routinely vie for cigars.
Christie's remains the epicenter of the market. While Sotheby's in London holds the occasional auction, Christie's is the only commercial house that holds regular sales. (Charity auctions are also booming, but they're a different animal--bidders tend to spend far more than market value.) Although Christie's sales vary widely, an auction held June 23 was typical. On the block were 10 boxes of Cuban cigars made in the '90s, including two boxes of Hoyo de Monterrey Double Coronas (£300/US $495 and £270/$445), Bolivar Belicoso Finos (£185/$305), and Punch Punch (£155/$256), to name some highlights. On June 5, the sale with the 1492s, Christie's also auctioned a special numbered humidor made to commemorate the 150th anniversary of Partagas. Filled with 150 Cuban Partagas cigars, it was snatched up for £18,000 ($29,678, or $198 a smoke).
It's these lots of limited-edition cigars--along with pre-embargo Havanas (those shipped from Cuba before the U.S. embargo was imposed in February 1962)--that fetch the highest prices. Pre-embargo coronas generally sell for anywhere from £1,000 to £1,500 ($1,647 to $2,470) per box, and big cigars can go for nearly twice that much. Last year, a box of Montecristo No. 2s, Cuba's benchmark torpedo, sold for £2,600 ($4,281).
The short-lived Trinidad record shattered one held for about six months by a cabinet of 163 Havanas that weren't just pre-embargo--they were pre-Castro, pre-Batista, even pre-Abe Lincoln. Made in the 1850s, the cigars sold for £17,600 ($29,400, or $180 per smoke) at a Christie's auction last December.
The collector appeal of these rare smokes is obvious, but why buy modern, run-of-the-mill Cuban cigars at auction? Box age is one reason; availability is another. Often, cigars with anywhere from one to 20 years of flavor-enhancing age are auctioned for prices only slightly higher than current retail. Havanas on the world's retail shelves--when you can find them--are no more than six months old.
As for authenticity, Christie's has each box examined by experts, and the seller is required to provide documentation of provenance. Most cigars are available for viewing before the sale. Christie's has been approached several times over the past few months by people trying to auction counterfeit Cuban cigars, according to David Ellswood, an executive with Christie's wine department, which organizes the cigar sales.
"It's such a small market for us," Ellswood says. "Unless we can sell only the finest cigars with absolutely cast-iron provenance, we're not really interested."
Brendan Vaughan is the assistant editor of Marvin Shanken's Cigar Insider newsletter and manager of online services for Cigar Aficionado Online.
Christie's in South Kensington, London (44-171-581-7611), holds monthly cigar auctions. Its King Street location (44-171-389-2720) holds less frequent sales.
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