Negotiating the Private Sale

Profits are down at Sotheby’s and Christie’s, but business in their private sales departments has doubled. Selling privately is very attractive now since it is quick, confidential, and avoids the inherent production costs and time delay of selling at auction. Carol Vogel just wrote an article “More Artworks Sell in Private in Slowdown,” that captured this rising trend in the art world. With auction prices no longer what they were, the many collectors who have lost their assets in the stock market, real estate or with Bernie Madoff, are turning to the secretive world of private sales, where parties are often bound by strict confidentiality agreements. In boom times, auctions are the obvious selling route, since the theatrics of public competition drive up prices. However, the very public spectacle of auctions is often the reason that cash-strapped collectors are avoiding them right now, because being caught selling can be an embarrassment.
(Twombly image courtesy of Menil Foundation)

According to art world gossip, works that have recently exchanged hands through private sales include Cy Twombly “Blackboard” painting for $12 million, a 1970s de Kooning abstract canvas for $30 million, one of Gerhard Richter’s “Color Charts” for $18 million, and Jeff Koons’ “Hanging Heart Violet” sculpture for $11 million.
Jeff Koons’ Hanging Heart Violet was recently sold through a private sale.

Vogel describes the typical collector’s profile in today’s market, “Gone are the new rich - the Russian oligarchs and oil-rich Middle Easterners, as well as the American hedge fund magnates - who in flush times were willing to pay any price. Gone too are the Europeans who were active when the weak dollar made their purchases seem cheap…Today’s buyers tend to be older collectors who bowed out of the market when prices began escalating several years ago. These patrons have far more conservative tastes, preferring works by tried-and-true names like Alexander Calder or Robert Ryman rather than those by younger artists like Takashi Murakami or Damien Hirst who were snapped up by speculators and have now lost some 50 percent of their value.”
Indeed, just like the current housing market, it is difficult to discern prices for works of art, since greedy sellers are convinced that their property is still worth 2007 prices, while bargain hunters are expecting steals. Eventually, the buying and selling sides will reconcile, and prices will become less volatile. In the meantime, here are some quick tips for new collectors interested in tapping into the private sale market:

1) Know what you want: what artists, mediums, styles, and subject matter are you looking for? Be ready to describe what you want in detail

2) Develop relationships with gallery owners, auction house specialists, and other art world insiders and mention what you are looking for - you will be surprised how works start coming your way once you let the right people know what you are interested in

3) Negotiate, negotiate, negotiate. It is a buyer’s market and private sellers are frequently distressed and willing to lower prices.
By guest blogger, Emily Waldorf of ArtsEtoile.