Art collecting is a highly absorbing activity because it has an added dimension that distinguishes it from other types of investment: that of connoisseurship. This presents an enormous opportunity for learning, but also presents a hurdle for the ill-informed.
“I have seen so many clients make the mistake of buying an art work not on the individual merits of its aesthetic appeal, but because it is simply signed by an artist that is currently en-vogue,” says international fine art dealer and agent Simon Shore.
“I would always advise collectors to buy art that personally appeals to them. Whereas most people will not be up to speed with the art market or have an understanding of the history of art, they will know what they like.”
However, there are other hazards that ought to be considered: the condition of a painting is very important and will require professional guidance. The price being asked ought to tally with the correct period in that artist’s career.
“An understanding of provenance can greatly affect value,” he adds. “Certainly a painting that has come from a private collection and is fresh to market would have a greater appeal than an equivalent piece that has been to auction several times in its recent history.”
The reason for this is the need to establish a profit margin: if everyone knows the price you paid for a piece, they are likely to only offer you a 10% profit margin. Similarly, if they know it previously failed to sell at auction, the price they are likely to offer will fall.
“A collector also needs to consider that the seller has legal title to do so,” says Shore. “A good advisor or dealer will carry out all this work for a pre agreed fee.”
Building a collection should be fun and enjoyable, but Shore would always recommend taking professional advice. A professional will guide and advise on price, arrange checks on legal title and Art Loss (to check that the painting wasn’t previously looted), arrange importation and export licences if required, advise on condition, restoration requirements, framing and hanging.
“I always recommend three simple rules,” he adds. “Set yourself a budget that you are comfortable with, buy what really appeals to you and take advice from an art market professional who will guide you through the market.
“The art market can be an opaque world, so don’t travel it without a guide. You wouldn’t buy a property without legal advice, shares without market analysis and so employ an art market professional when buying a painting. Having sound advice from someone who is working for you is common sense.”
He notes that when buying at auction, the public often forget that the auction houses are acting in the interests of their client, who is the seller. Their job is to achieve the highest price.
“You need an advisor who is solely representing your interests,” he says.
He adds that the domination of the two rival auction houses Sotheby and Christies and their control over the market is always worth monitoring. There is a school of thought that currently questions why an auction house feels able to invoice both the buyer and the seller in a sale at auction.
“The auctioneers only act for the seller and are paid to achieve the highest price for the sale of their goods. As an agent invoicing a buyer wanting a cheap price and a seller wanting a high price, one presumes a conflict of interest,” he says.
When it comes to selling pieces from your collection, Shore believes you should always sell when not under financial pressure to do so.
“I would always recommend holding on to a painting for at least ten years unless something exciting happens to that artist in the meantime. I once sold a superb painting to a client by Laura Knight RA. Since then, there has been a very good retrospective exhibition of her work at the National Portrait Gallery and there is also one planned at the Dulwich picture gallery.
“This has certainly raised interest in the artist’s work and will have a positive effect on value. As the client’s advisor, I have arranged to have the painting that I have sold him exhibited at the Dulwich Exhibition. This will have the effect of giving his painting museum quality status, curatorial accreditation and academic exposure. In that case, I will be suggesting that sometime after the show might be a good time to sell.”