What is Art Worth?

Let's Talk Dollars and Cents
December 23, 2015
Detail of "Wishful Thinking" by Suzanne Laura Kammin
Detail of "Wishful Thinking" by Suzanne Laura Kammin

Every week, we'll be your guide as you navigate the world of buying art in our series, The Collector. 

 

Last week, we talked about art as an investment and (spoiler alert) concluded that it wasn't best to think of collecting art as an investment alone. First and foremost, you should buy what you love. But, it is important to consider the work's value. So, how do you know what a piece of art's worth? Figuring that out is one of the trickiest parts of buying art, even for total veterans of the art world. This week, we'll take a look at some basic concepts and rules for how art is priced and how to ensure you're getting a good deal. 

 

First, let's go over some factors that influence the price of art. There are variables relating to the art itself like:

 

  • what condition it's in
  • its size
  • the medium and materials
  • when it was created
  • how nice the frame is
  • what the subject matter is
  • what the dominant colors are
  • whether it was featured online or in a catalog
  • where it's shown in person
  • what exhibit it's shown in
  • what sort of mood the art imparts to viewers
  • what the critics or scholars say

 

There's also the artist to consider:

 

  • what their reputation is at that particular time
  • their age (the art world and market is notoriously ageist) 
  • the length of their career
  • whether or not they've been exhibited in well-known and important spaces
  • whether or not they've been written about in art world publications
  • how much they work at self-promotion
  • how shy they are about their work
  • how active they are in the art world (the intrigue of an eccentric recluse may drive prices up, or collectors may never even get to know who they are because of it)

 

There are also a bunch of less tangible aspects like:

 

  • the opinions of the artist, seller, and buyer
  • how much the buyer likes the artist
  • how much the buyer likes the seller (and vice versa)
  • how much the buyer trusts the seller
  • how good everyone is at negotiating
  • what mood everyone's in
  • how badly the sellers need the money
  • how in demand the artist or piece is
  • the other people that are vying for the same work
  • the emotional attachment of the artist to the work

 

There's also the matter of whether or not the artist is still alive. There's the old adage of nobody ever liking your art until you're dead, and when people are collecting art as a sport they often have the idea in mind that the value of a piece of work will increase after an artist's death. That's not always the case. A specific set of conditions must be in place for the artist's death to significantly impact the prices of their work. First, the artist has to be relatively famous and their work already has to be somewhat expensive and in demand among collectors. Second, they have to die prematurely and unexpectedly, catching the marketplace by surprise. When that happens, everyone starts scrambling for their work and the demand causes the prices to spike upward. (Far more often than not, this is a bit of ugliness in the art market based on profiteering, greed, panic, ignorance, and impulse.) On the other hand, sometimes an artist's death can cause the price of the work to plummet. For example, estate executors or family members may mismanage the collection of work by dumping it all on the market at once and causing the supply to become significantly greater than demand. Or, the value may have been primarily affected by the cult or personality surrounding the artist for those that happen to have fame while they're alive, and once their number one promoter - themselves - is gone, the public opinion of their actual work may start to drop along with their prices. 

 

Good luck trying to crunch all these sorts of variables into a numerical formula. But we'll try to at least break it down into some guidelines:

 

  • A good-sized painting should typically not sell for less than $3000
  • Works on paper by an unknown artist should generally be in the $500-$1000 range
  • A giclee or any kind of poster that's a photomechanical reproduction of an existing painting should never be over $500

 

If the price of art ever seems too extravagant, even when it's right in line with these guidelines, always remember that artists have to make money. Even if an artist sells a watercolor directly at $500 every week, that's $24,000. Factor in the cost of supplies, shipping, studio rental space if applicable, and expensive MFA loans to repay, let alone the standard costs of living, and that $500 work of original, unique art seems like quite the deal. If their work is sold through a gallery or other marketplace, there's also the cut of the sales that they receive (usually 50% at a gallery). 

 

Here's how we establish pricing:  We'll generally start by setting prices low and see how it sells. If we sell everything right away, then the prices are obviously too low and we should raise them 10%. If they keep selling, we raise them again until we reach a point where the artist always has a few paintings in the studio, but most of the work sells. It's always easy to raise prices, but next to impossible to lower them. That brings us to Kathy's Law of the Art Market: Prices never go down. Discounts go up.

 

Should you ask for a discount? Sure! Everyone else does. Whether or not you'll get it is another question. Good situations for discounts include if the artist is not selling well (obviously), if the dealer feels you might be an ongoing client and they want to cultivate a relationship with you, or if the dealer has had the piece in inventory for a while and the original cost was low. A dealer can't consider a discount if they've gotten the piece on consignment from a collector or if the artist is selling out. The only way to know is to ask. 

 

Ultimately, the value of a piece of art is subjective, but if you're prepared with these guidelines and variables in mind you'll be able to to judge for yourself whether that work you love is also worth your money. 

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