Buying art in the secondary market involves acquiring artwork from someone other than the artist or the artist's primary dealer; think of it as the "used" art market. Here's how to navigate it:
Understanding the Secondary Art Market
The secondary art market offers opportunities to acquire works by established artists, often at prices influenced by past sales and market demand. It contrasts with the primary market, where you purchase directly from the artist or their representing gallery.
Key Players in the Secondary Art Market
-
Auction Houses: Major auction houses like Sotheby's, Christie's, and Phillips are significant players. They offer a wide range of artworks through public auctions.
- Pros: Access to high-value pieces, transparency in bidding.
- Cons: High buyer's premiums, potential for bidding wars.
-
Art Galleries: Some galleries specialize in secondary market sales. They may focus on specific artists or periods.
- Pros: Expert knowledge, opportunities for negotiation.
- Cons: Prices can be higher than at auction to reflect the gallery's services.
-
Art Dealers: Independent art dealers source and sell artworks privately.
- Pros: Personalized service, access to unique pieces not readily available.
- Cons: Requires careful vetting of the dealer's reputation and expertise.
-
Art Fairs: Art fairs occasionally feature galleries selling secondary market works, though they primarily focus on contemporary art from the primary market.
-
Online Platforms: Several online platforms, such as Artsy or Artnet, host auctions or offer secondary market sales through galleries.
- Pros: Accessibility, wider selection.
- Cons: Risk of misrepresentation or fraud, importance of due diligence.
Steps to Buying Art in the Secondary Market
- Research: Identify artists and artworks that interest you. Research past sales data using resources like Artnet Price Database or mutualart.com. Understand the artist's market value and the provenance (history of ownership) of the piece.
- Determine Your Budget: Be realistic about your financial limitations. Factor in not only the purchase price but also potential buyer's premiums, taxes, shipping, insurance, and framing costs.
- Assess Authenticity and Condition: This is crucial! Request a condition report from the seller. For significant purchases, consider hiring an independent art appraiser to assess authenticity and condition. Provenance research is essential.
- Attend Auctions or Visit Galleries/Dealers: Preview artworks in person if possible. Ask questions about the artwork's history, condition, and the artist's market.
- Bid Strategically (Auctions): Set a maximum bid and stick to it. Understand the auction process and buyer's premium.
- Negotiate (Galleries/Dealers): Don't be afraid to negotiate the price, especially if you're paying in cash or if the artwork has been on the market for a while.
- Complete the Purchase: Ensure you receive a proper invoice and documentation of ownership (bill of sale). Arrange for secure shipping and insurance.
Due Diligence and Considerations
- Provenance: A clear and complete provenance adds value and verifies authenticity.
- Condition Report: A detailed condition report is essential to avoid surprises.
- Authenticity Guarantee: Seek an authenticity guarantee from the seller.
- Buyer's Premium: Be aware of the buyer's premium charged by auction houses and some galleries.
- Expert Advice: Consider consulting with an art advisor or appraiser for significant purchases.
Risks and Mitigation
- Counterfeits: The secondary market is susceptible to forgeries. Rigorous authentication is crucial.
- Misrepresentation: Ensure the artwork is accurately described in terms of condition, size, and provenance.
- Price Fluctuations: Art market values can be volatile. Be prepared for potential price fluctuations.
- Fraud: Exercise caution when dealing with unknown sellers, especially online.
By understanding the dynamics of the secondary art market, conducting thorough research, and exercising due diligence, you can successfully acquire valuable and meaningful artworks.
