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Investing in art -- Page 2

"The art market doesn't actually exist," Davis says. "It's really a series of micro-markets. Fine arts (paintings, drawings, prints, photography, sculpture), decorative arts (such as china, silver or furnishings), collectibles (pop memorabilia, toys) and jewelry." Some auction houses represent all or some of these markets, and some such as Heffels and Christie's will take only fine art pieces.

If a work is accepted for auction, the appraisal is usually free. If not, you'll be told only that your piece is "not suitable for auction," and you'll have to look elsewhere to get an actual dollar value.

So where else can you look for an appraisal? One excellent source is the galleries that represent the artist in question. The Art Dealers Association of Canada can help you track down this information.

Don't overlook the major public galleries found in larger centres and, of course, our very own National Gallery of Canada. These institutions employ art specialists (curators, historians, educators, conservators), who can be invaluable sources of information and advice. While they won't give you a dollar value, they can tell you about what they call the work's "importance," assess its condition and refer you to reputable appraisers and dealers. If you can't get there in person, you can arrange to send photographs or digital images along with other information.

All about auctions
Once your work has been evaluated for price, condition and authenticity, you have several options for selling: through dealers, at auction houses or privately.

Commission fees are paid by both buyers and sellers in most cases when dealing with auction houses. Other costs include transportation, insurance, cataloguing and any repair or restoration, to name just a few. Rates charged to sellers by large auction houses range from 10 percent to 20 percent, and all fees are based on a work's "hammer price" (the amount it actually sold for at auction, which can differ significantly from its catalogued amount). Dealer commissions vary but are typically 50 percent or higher and are part of the sale price.

The art world can be large and complex. It can also be as simple as buying what you like and can afford. To get you started, here are a few resources:

  • subscriber Web sites where you can track the sale record of an artist or specific work (artnet and artprice are two of the major ones used by dealers)
  • auction house Web sites where you can follow what's on offer and what price it fetched and get tips on buying and selling at auction
  • the Art Dealers Association of Canada's Web site has a useful guidebook on Prints available for download from its site, and a Collector's Guide that can be ordered free of charge
  • rental art that is available from many of the larger public galleries and some private galleries as well (a great way to test the waters and find out what you like)
  • your insurance company can tell you whether art is included in your existing contents coverage (and even if it is included, you might need to provide certificates proving value and ownership for any claim)
  • information on tax deductions for art donations can be found on the Canadian Cultural Property Export Review Board's Web site

Remember that educating yourself will help you avoid the artist you don't want to meet: the con artist.

Diana McLaren is a writer in Toronto.

-- Posted: Feb. 16, 2006
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