Art Market Blog – Selling Art by Private Treaty
Selling at auction is by far the most popular and marketable way of selling an artwork primarily because it provides the seller with a relatively quick, easy and highly orchestrated selling process and offers the buyer a well organised, theatrical and exciting method of purchasing art. The main issue with buying and selling at auction are the associated fees which can quickly turn what seems like a good result into a not so good result.
With such a high demand for top quality works and so many wealthy people investing in art, many sellers are taking advantage of those investors and collectors that can afford to pay above the odds in return for not having to compete at auction and are turning to the private treaty sale process to sell their works. A private treaty sale is basically the sale of an artwork by negotiation and involves buyers making offers on an artwork which either result in an offer being accepted or negotiation on the price between the buyer and seller. Sale by private treaty is the most common form of buying/selling real estate and is now becoming more popular in the art market. Many sellers do not actually set out to sell by private treaty but are approached by a buyer before an auction with an offer that is too good to refuse.
The advantages of selling by private treaty are:
-Lower costs than selling at auction
-Anonymity and discretion
-the possibility of receiving a higher price due to the fact that each potential buyer does not know what the other potential buyers have offered
-an extended sale period in which to reach a selling price
-more likely to make rational,
-less pressure than selling at auction
The disadvantages of selling by private treaty are:
-selling process can take a considerable amount of time
-the public competition that is generated at an auction is removed
-requires more input and involvement by the seller
Anyone wishing to sell an artwork should be aware that by selling at auction you are at risk of achieving a lower than expected price whereas by selling by private treaty you are risking the potential of a much higher price than you expected. Because each selling method has its advantages and disadvantages some of which relate to the type of work being sold, the decision on the best method of sale should be made by a professional art dealer and should be based on a case by case assessment.
The ideal situation would be to sell an artwork at a major auction house that accepts private treaty offers before the sale and also after if an artwork fails to sell but be careful that you aren’t going to be charged the same high fees that the auction house would charge if the work was sold at auction.
If you are thinking of selling an artwork and after reading all this you are now thinking “why don’t I just shop the artwork around to different dealers and auction houses until I get a good price” then think again. The art world is very close knit and news travels fast so any attempt at trying to fool buyers will be sure to result in a very negative response and plenty of tut-tutting.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.