[mrred11]

How do Auction houses calculate estimated values on works?
Any details? 

Is there a industry standard or is each house different? 

Thanks 

[Pattycakes]

It's based on previous auction results for a given work if a print, or results of comparables if original. It also has a lot to do with the specialist (s) giving the estimate some understand the wider market beyond auctions and estimate accordingly, others do not.

[Poster Bob]

Stick your finger in the air and take a guess. Normally within 25-50% of what it actually sells for.

[mrred11]

Oct 20, 2018 9:16:37 GMT 1 Pattycakes said:

It's based on previous auction results for a given work if a print, or results of comparables if original. It also has a lot to do with the specialist (s) giving the estimate some understand the wider market beyond auctions and estimate accordingly, others do not.

Thanks. That was very helpful!

[moron]

Often there are no set rules. Also people do not have to accept the auction house valuation and can set their own reserve but that also means paying the fees if the item does not reach the reserve.

If it is for modern art by today's living artists the estimate can be worked out by the auction house based on market value and desirability plus the provenance of the item for example a Warhol print once owned or part of the collection or a prominent person or collector can be more desirable than the same Warhol print owned by Joe Nobody.

For antique paintings and art a lot if to do with provenance, specially African statues etc. For paintings, the auction house experts can easily undervalue a painting by thousands if not more and attribute it to a lesser artist. Some say these type of mistakes have been deliberate at times.

Basically you have to do your own research and get independant values from credible people who deal in that particular art and make sure you are happy with the reserve.

[sfnyc]

The most commonly used practice is to lower estimates significantly from actual market value / records to attract as many bidders as possible to the auction. So the only estimate calculation they really do is finding the number that will attract the most bidders

[mrred11]

Oct 20, 2018 22:00:51 GMT 1 sfnyc said:

The most commonly used practice is to lower estimates significantly from actual market value / records to attract as many bidders as possible to the auction. So the only estimate calculation they really do is finding the number that will attract the most bidders

This is interesting. I am curious to what you think of my previous reply to another poster. Frame it in "how to determine actual value" instead of the auction house trying to get more bidders. Thanks. I look forward to your reply
 

[mrred11]

Oct 20, 2018 21:01:45 GMT 1 t-dot said:

Market comparables is the short answer

Most prints have standard estimates these days. Banksy, Warhol, KAWS prints are always estimate at the same range even if sometimes the hit above or below

Let's say i have a kaws art toy in my collection.

Essentially i can comb auction results of my work on a website like artprices.com and place the figures in a spreadsheet and generate my own estimates of the value. If so, how far would one go back? The last 6 month of sales results of 6 weeks? Has anyone done this for there own collection yet?

Read more: urbanartassociation.com/thread/154357/auction-houses-calculate-estimated-values?page=1#ixzz5Uj4B4xG9

[mrred11]

Oct 20, 2018 21:00:20 GMT 1 moron said:

Often there are no set rules. Also people do not have to accept the auction house valuation and can set their own reserve but that also means paying the fees if the item does not reach the reserve.

If it is for modern art by today's living artists the estimate can be worked out by the auction house based on market value and desirability plus the provenance of the item for example a Warhol print once owned or part of the collection or a prominent person or collector can be more desirable than the same Warhol print owned by Joe Nobody.

For antique paintings and art a lot if to do with provenance, specially African statues etc. For paintings, the auction house experts can easily undervalue a painting by thousands if not more and attribute it to a lesser artist. Some say these type of mistakes have been deliberate at times.

Basically you have to do your own research and get independant values from credible people who deal in that particular art and make sure you are happy with the reserve.

Very helpful as well.

It seems hard to trust the professional opinion of gallery people and auction house reps. How can you find credible people in this space? (for advice) How do you do your own research personally if you don't mind sharing. Do you use services like artprice.com or artnet, artsy? Im curious to how to get the most value from these services. 
 

[Chris JL]

From a source that does work for one of the big auction houses (that shall not be named), I know that they do bias down some estimates intentionally to generate excitement and attention.
Baseline: it’s both a valuation and a marketing exercise.

[rockbeer]

Oct 23, 2018 5:41:59 GMT 1 mrred11 said:

It seems hard to trust the professional opinion of gallery people and auction house reps. How can you find credible people in this space?

You shouldn’t trust them, and you can’t expect to find credible people in the auction-house world. They are involved in a scam of the highest order where opacity and malfeasance are simply normal. If just about any other business were run this way, it would be regulated. The only reason the art market isn’t is because the people it routinely rips off can, for the most part at least, afford their losses.

Tread carefully.

I would strongly recommend Don Thompson’s book The $12 Million Stuffed Shark for an insight into the dysfunction at the heart of the art auction world. Essential reading for anyone thinking of playing that game. You wouldn’t want to discover afterwards that you were the stooge.

[mrred11]

Oct 23, 2018 8:28:19 GMT 1 rockbeer said:

Oct 23, 2018 5:41:59 GMT 1 mrred11 said:

It seems hard to trust the professional opinion of gallery people and auction house reps. How can you find credible people in this space?

You shouldn’t trust them, and you can’t expect to find credible people in the auction-house world. They are involved in a scam of the highest order where opacity and malfeasance are simply normal. If just about any other business were run this way, it would be regulated. The only reason the art market isn’t is because the people it routinely rips off can, for the most part at least, afford their losses.

Tread carefully.

I would strongly recommend Don Thompson’s book The $12 Million Stuffed Shark for an insight into the dysfunction at the heart of the art auction world. Essential reading for anyone thinking of playing that game. You wouldn’t want to discover afterwards that you were the stooge.

wow. Thank you so much. I just ordered a copy of that book! Excited to read. 

[rockbeer]

Oct 24, 2018 5:16:29 GMT 1 mrred11 said:

wow. Thank you so much. I just ordered a copy of that book! Excited to read. 

Yes, it's quite an eye-opener. A few years old now, but still highly relevant, especially as his predictions about the decline of the dealer/gallery are starting to play out.

Essentially, because art has no real or intrinsic value, pricing is always based on other often intangible factors, like perceived scarcity (often deliberately manufactured), what people think they can get away with, and what someone else is rumoured to have paid for something similar last week. As sfnyc said above, auction estimates are usually designed to draw a crowd rather than to reflect the actual expected selling price, because nothing is better for artificially boosting auction prices than having a lot of people bidding. And once a couple of unremarkable mid-range lots go for two or three times their estimates, the major lots that follow inevitably will too.

It only takes two people (or even one and a willing chandelier) with too much money or massively over-inflated egos bidding against each other in a hyped up auction environment to set absurd new benchmarks for individual artists or entire genres that the rest of the market is then essentially obliged to follow.