Blue Collage - 35x47 inches - by Doug Morton - sold at NAC auction in 2014 for $3,277
Part of the thrill of owning original art can come from offering the art back to the market -- to make room for new acquisitions, to cash in on an art investment, or simply to be part of the exciting art world.
Why consign to an art auction?
The main advantage of selling a piece of art through an auction, instead of through a private dealer, is the ability to reach a wide range of collectors at one time. With an art auction, your piece will be one of hundreds of artworks drawing buyers to the big event.
And it is quick: once you offer a piece through a gallery you might have to wait many months for a collector to make an offer. But at an auction, especially an online auction, your artwork is presented to the world at large, with a vastly greater chance of immediately finding an interested buyer, or several competing buyers.
How does it work?
1 - Contact an auction house, or respond to a call for consignments for an auction. Today, an artwork would normally be offered for consideration by emailing a description and a good photograph. The information to provide includes:
Marks (signed, titled, dated?)
Condition (scratches, blemishes, fading, damage to the frame)
Provenance (what do you know about the piece's past owners, and how did you acquire it).
2 - The auction house will do an initial assessment of the artwork being offered, normally for no cost. They might request more or better photographs, and a more detailed description.
In terms of the photographs you take, it can be valuable to photograph paintings and prints to show the frame, then to use a tighter composition to show the painting itself, and a further photograph to provide detail of only the signature, especially if you are not certain of the artist's name. You should at least inspect the back of the artwork, as sometimes paintings are signed, dated or titled on the back. If so, make note of this information or photograph it as well. Also, if there is damage to the artwork, additional detail photos should clearly show the problem areas.
Based on the information and photographs you provide, the auction house will decide wether or not it is suitable for their upcoming auction. They might decide that your proposed consignment doesn't fit the theme of their auction, or they might reject an artwork based on its quality or condition, or the artist's auction history might not warrent including the piece in an action at this time.
From the detailed information and quality photographs that you've provided, the auction house will next arrive at an estimate of the piece's market value.
The auction house will provide an estimated value range (eg. $1,000 - $1,500), and might suggest a reserve price, the minimum bid below which the piece would remain unsold. For a piece with an estimated value of $1,000 to $1,500, the reserve price might be $600. If bidding does not reach $600, the lot remains unsold.
The auction house will inform you of all fees involved in consigning the work to the auction.
The commission is the deduction that the auction house makes from the hammer price (the highest accepted bid) for a piece which is sold at the auction, before the remainder of the hammer price is paid to you. This commission varies between auction houses, and often scales according to dollar values. A fairly standard commission is 25% for pieces that sell for a hammer price under $2,500, 20% for works that sell from $2,500 to $5,000, 15% for prices from $5,000 and $10,000, and 10% for works selling over $10,000. (See below for a description of Saskatchewan NAC's approach to commissions for its auctions).
Some auctions will also charge a fee for professionally photographing the artwork and for including a photograph of the piece in the auction catalogue or in advertising. Often the auction house will deduct these fees from your final payment for the artwork after the sale, rather than requiring that you pay them up front.
The reserve fee is a charge imposed by the auction house if bidding on your piece does not reach the reserve price, and consequently the piece remains unsold. Reserve fees vary widely from auction house to auction house, from 5% to 20% of the reserve price, often with a minimum of between $75 and $250. (See below for a description of NAC's approach to reserve fees).
You, the consignor, are responsible for shipping costs to the auction house, and if the piece does not sell, you are also responsible for the return of the artwork from the auction house.
Insurance is also generally the consignor's responsibility, either via insurance offered by the auction house, or via your own insurance policy.
If you agree with the estimated value for your artwork proposed by the auction house, and the reserve price that they recommend, and you accept the commission and other fees that they will charge, they will send you a Consignment Agreement for the piece, which precisely sets out all the terms and fees. Read the agreement carefully before signing, and don't hesitate to ask the auction house for clarification of any terms, requirements or fees which you don't fully understand.
After the auction, you will receive payment from the auction house, minus their commission and other agreed-upon fees. This will usually occur four to six weeks after the auction.
If bidding on your consignment at the auction does not reach the reserve price, and your piece does not sell, the auction house might offer you the option of re-offering the artwork at an upcoming auction, instead of returning the work to you. Re-offering an artwork usually requires that the estimated value and the reserve price be reduced. Usually if an auction house suggests that you re-offer your piece, they will waive a portion of the reserve fee that they would have charged for the unsuccessful auction.
Do your own research. Before offering an artwork to an auction house, find out what you can about the piece and the artist. Look into auction history for the artist. You might find some past auction prices for similar work by the artist, and you might find that a particular auction house has had remarkable success selling works by that artist.
Consign early. The sooner you can offer your potential consignment to the auction, the better will be their research and the more accurate will be their appraisal, as it will occur before the rush that accompanies deadlines prior to an auction.
Don't be afraid to negotiate terms with the auction house. If the piece you are consigning has special caché or is particularly valuable, or if you are consigning a large number of artworks, you might get a discount on commissions or fees.
Deliver early. After your artwork has been accepted by an action, and the estimated value, reserve price, and fees have been agreed upon, deliver your artwork to the auction house as soon as possible. This will give the auction house ample time to re-assess the piece, to revise its research of the work and its artist, to write thorough descriptions, and to photograph the work and to begin promoting it. Also early delivery provides the opportunity for some last minute cleaning, restoration or reframing if the auction house recommends it.
Don't fight the auction house on the estimated value. It's fine to ask for a rationale as to how the auction house arrived at an estimated value for the artwork you are offering, but it is generally a mistake to insist upon a higher estimate, thinking that this will make the piece more impressive and generate higher bids. The auction house is tasked with arriving at good, conservative estimates which are in sync with the market so that potential buyers will want to participate in the sale. Then, the process takes care of itself and the competing buyers will decide what a piece is truly worth.
Saskatchewan NAC's commission structure for its auctions is 20% for artworks selling for hammer prices up to $500, 15% for artworks selling for $501-$2500, and 10% for works selling for over $2,500. Reserve fees are 5% fo the reserve price, with a minumum of $5 and a maximum of $50, but this fee is waived if the unsold artwork can be offered by NAC at a future auction or through the online NACmarket (and in fact NAC has never charged a reserve fee to any client to date).