The process of estimating the value of a painting has changed irreversibly over the last 20 years. In the past, valuations were often calculated based upon a combination of an artist's sale record at auction, the size of a piece (essentially on a per-inch basis), condition, and historical significance (e.g. whether it was a particularly significant work).
Today, these tried and tested metrics have been replaced, in most cases, by a painting's decorative appeal. The vast majority of buyers, perhaps yourself included, value a piece for its aesthetic and how it would look in a home. Collectors (of older works especially) are becoming fewer, which has altered the way a painting is perceived.
The Shift Towards Decorative
Recently, I've seen works sell at auction for over 20 times their estimate simply due to their decorative appeal. Despite the fact that works by the artist in question had never reached anywhere close to that level.
This shake-up of the art market has led to auction results, which are unpredictable and often appear quite random. If two bidders fall in love with a piece, the price can far exceed a sensible estimate.
Valuation Tools
If you've ever tried to value a painting yourself, it's tempting to use the online marketplaces, such as eBay, and base an estimate on similar works offered by dealers. However, these prices are often inflated and differ widely from the sold listings.
To achieve a sensible valuation, fine art specialists working at the leading auction houses use a combination of online tools, which list thousands of auction records, coupled with their own opinion on the decorative appeal of a piece. From here, they provide an estimated range, e.g. £2,000-£3,000, and essentially guess where the hammer will fall.
It's not an exact science by any means and constantly changing with market conditions. Valuations are more subjective than ever and can vary extensively, so when you're looking for an appraisal, do contact several auctioneers.
Fine Art Dealing
Each dealer has their own method of valuing a painting and these generally fall into three categories:
Start High and Reduce
The initial listing price is way above a sensible valuation but reduces over time until sold.
Markup to Markdown
Most buyers expect a discount, so on occasion, dealers mark a painting up by at least 30% above what they will take, only to accept a much lower offer. Thus, the buyer feels that they've received a great deal.
Fixed Margin
Common across many forms of retail, some will apply a fixed profit margin, e.g. 40% across their inventory.
How We Calculate Our Prices
As we're not from a fine art dealing background and we invest time in every piece, we adopt a very simple method when calculating the price of a painting. It makes life easier for everyone.
Purchase price + Conservation time + Research time + Packing time and materials + Delivery.
For example, for a piece with a total list price of £3,000, which includes free shipping, this is comprised of:
- Purchase price: £1,700
- Conservation time (e.g. removing yellowed varnish and revarnishing): £400
- Research time (checking that the painting is what it appears to be and discovering more about the artist): £100*
- Packing time and materials: £50
- Delivery cost: £150
- 5% finder's fee: £150
- Marketplace commission (e.g. when selling through 1st Dibs at 15%): £450
*Research invariably takes much longer but is often undertaken at no extra charge.
The only time this isn't the case is when we've discovered a signature and reattributed the painting to a different artist. In this instance, the painting is revalued accordingly.
By building in an amount for marketplace commission, this allows us to offer a discount when you buy directly through our website, which as you may know, is 10% for newsletter subscribers and 15% for those who have spent over £10,000 with us.
For any questions relating to valuations, please contact us.