[hazydavy]

Let’s say I sell a print at auction that hammers at £100,000. Add on 25% + VAT (buyer’s premium) plus 4% (ARR) and a buyer will pay £134,000 for that piece.

Let’s say that the seller pays the auction house 10% fees so he/she receives £90,000 for the work.

There is clearly a differential of £44,000 between what the buyer pays and what the seller receives. It represents almost 50% of the hammer price.

As this example relates to a print multiple, what are the other prints out there in the same edition then worth?

[vad77]

Sept 6, 2020 10:13:50 GMT 1 hazydavy said:

Let’s say I sell a print at auction that hammers at £100,000. Add on 25% + VAT (buyer’s premium) plus 4% (ARR) and a buyer will pay £134,000 for that piece.

Let’s say that the seller pays the auction house 10% fees so he/she receives £90,000 for the work.

There is clearly a differential of £44,000 between what the buyer pays and what the seller receives. It represents almost 50% of the hammer price.

As this example relates to a print multiple, what are the other prints out there in the same edition then worth?

It is worth as much as buyer is willing to pay. Buying it from anonymous dude on the forum, it may go for £75K, but somewhere in the gallery in LA it will go for £150K.

[Pawel]

Sept 6, 2020 10:13:50 GMT 1 hazydavy said:

Let’s say I sell a print at auction that hammers at £100,000. Add on 25% + VAT (buyer’s premium) plus 4% (ARR) and a buyer will pay £134,000 for that piece.

Let’s say that the seller pays the auction house 10% fees so he/she receives £90,000 for the work.

There is clearly a differential of £44,000 between what the buyer pays and what the seller receives. It represents almost 50% of the hammer price.

As this example relates to a print multiple, what are the other prints out there in the same edition then worth?

 If it's banksy, it's £160k a week after the auction  

 On a serious note, it really depends on multiple factors. I would always look at the auction results as a guideline only. In your scenario, anything anything between 90 and 134 seems reasonable, the rest is up to the seller/buyer.      

[Pawel]

Sept 6, 2020 11:10:50 GMT 1 Mooncub said:

Sept 6, 2020 10:32:08 GMT 1 Pawel said:

 If it's banksy, it's £160k a week after the auction  

 On a serious note, it really depends on multiple factors. I would always look at the auction results as a guideline only. In your scenario, anything anything between 90 and 134 seems reasonable, the rest is up to the seller/buyer.      

I think the point hazydavy was making is this.  In his example, is the print worth 100K (hammer price), 134K (actual price buyer pays) or is it worth 56K (i.e. 100K minus all the fees)?  

It's an interesting question.  

The buyer in the scenario above gets 90k the seller pays 134k. The question is which of the two, but definitely not 56k.

[jstjst]

Sept 6, 2020 11:17:11 GMT 1 Pawel said:

Sept 6, 2020 11:10:50 GMT 1 Mooncub said:

I think the point hazydavy was making is this.  In his example, is the print worth 100K (hammer price), 134K (actual price buyer pays) or is it worth 56K (i.e. 100K minus all the fees)?  

It's an interesting question.  

The buyer in the scenario above gets 90k the seller pays 134k. The question is which of the two, but definitely not 56k.

My view is somewhere between the two, perhaps at a mid point. I view a private sale as needing to benefit both buyer and seller in comparison with likely auction prices,  - accepting this reduces upside gains, but also reduces risk for the seller and fees for the buyer. 

[alexandros88]

I would assume that in the £90-134k range, the price in a private transaction would be much much closer to the £90k (if not £90k itself).

Anything on top of the £90k are the fees for the auction house, which effectively pay for helping the seller finding a buyer and giving the buyer the confidence that the piece is in fact authentic (aware that some dodgy houses don’t really do that, but that’s another topic...).

Anyway, in a private transaction all those benefits don’t apply anymore so I would personally remove the fees from the value.

Basically if I’m a buyer I am happy to pay more because of the additional guarantee, but given the lack of it in a private transaction then I would stick to £90k

[Levi Stubbs Tears]

When I've bought at auction before, I have a figure how much I want to pay in total, incl all fees. I then net it back to how much that means I can offer hammer price. Once I've won the auction, hammer price is irrelevant as it's the total amount that goes out of my back account that I think about.

[Rubberneck]

It’s a sellers market, if the seller hasn’t got the wherewithal to sell at the more than the top price privately then more fool them.

You can only sell these things once so if you want to share the windfall with an auction house and pay them for the privilege (sellers premium) that’s your prerogative but clearly mental.

[Dive Jedi]

Sept 6, 2020 11:32:58 GMT 1 alexandros88 said:

I would assume that in the £90-134k range, the price in a private transaction would be much much closer to the £90k (if not £90k itself).

Anything on top of the £90k are the fees for the auction house, which effectively pay for helping the seller finding a buyer and giving the buyer the confidence that the piece is in fact authentic (aware that some dodgy houses don’t really do that, but that’s another topic...).

Anyway, in a private transaction all those benefits don’t apply anymore so I would personally remove the fees from the value.

Basically if I’m a buyer I am happy to pay more because of the additional guarantee, but given the lack of it in a private transaction then I would stick to £90k

All the provenance the auction house gives you as a guarantee are provided by........

the seller.

When a hammer price is 100K and including all fees the total price is 135K
then that's what a buyer is willing to pay for the print and that means that is what the print is worth to him/her.

Since a seller also pay fees a private sale would be fair around 125K.
But most certainly not around 90K.

If you can find a seller willing to part with said print for 90K, all the power to you.
I'd say that would be unlikely.

[coller]

Sept 6, 2020 11:32:58 GMT 1 alexandros88 said:

I would assume that in the £90-134k range, the price in a private transaction would be much much closer to the £90k (if not £90k itself).

Anything on top of the £90k are the fees for the auction house, which effectively pay for helping the seller finding a buyer and giving the buyer the confidence that the piece is in fact authentic (aware that some dodgy houses don’t really do that, but that’s another topic...).

Anyway, in a private transaction all those benefits don’t apply anymore so I would personally remove the fees from the value.

Basically if I’m a buyer I am happy to pay more because of the additional guarantee, but given the lack of it in a private transaction then I would stick to £90k

pretty much this. everyone thinks they're sotherbys.

the value isn't just what the buyer pays at auction. that's a myopic way of looking at things likely fueled by a desire to inflate the value of one's own art

you could as easily argue the value is what the seller receives, using the same logic

the auction house premium/contracts clearly serve a purpose. it gives you an established organization w/ deep pockets to turn to if something goes wrong w/ the transaction. this premium is auction-house specific and is irrelevant to private transactions. even most galleries can't pull off a similar premium, because they cannot offer the same level of support.

the real answer is a lot more complicated. it is certainly not 'what the buyer paid'

[Dubman]

It depends if you're the buyer or seller.

Buy and the Hammer price...

Sell at the Auction result price...



Joking aside I agree with most opinions above, the value of a piece is surely somewhere between the hammer and Auction price and there are many benefits with connecting a trustworthy buyer to an honest seller as there are no hefty commissions to pay ether way.

And it can work, I have successfully navigated through this 'mine field' on the forum to have a few successful even sided transactions where everyone is happy.

I appreciate everyone wants to buy low and sell high, but IMO it also comes down to respect and greed.

Most people on this forum are well aware of the market and the prices and if both seller and buyer are reasonable it can work very well on here.

[Love Is In The Air]

Small side point on this issue just cos I think it is also coming up on a lot of the Banksy threads too.

I appreciate HazyDave set a hypothetical question here so don't mean to offend or annoy but he mentioned the 10% commission the auction house takes from the hammer price and others have used this 10% rate in other comments too in last few weeks multiple times. But if we are talking about high end prints or anything Banksy at the moment, the seller will not need to offer 10% or anything close to that.

Others on here will be much much more experienced than me but I have sold two things last year at auction both in the £5-10,000 ballpark and I paid 5% commission and a small fee for insurance. I achieved this pretty easily negotiating a little over email, so I am sure some of these people selling several Banksys, or in the case of this hypothetical Q a £100k print, would get 5% and more likely get something like 2-3% as auction houses are keen to have these items in their sale.

To get back on topic, I always think someone selling privately takes less than auction or gallery pricing, and putting your stuff in auction is more risky but has potential of greater earnings if two people fight over an item or someone gets carried away. In the above scenario someone with the print selling privately would sell most likely £95-125k depending on how many people are desperate for it and will make offers and how desperate the seller is for a sale/quick money.