Buyer Beware: Be Sure to Read The Fine Print When Bidding at Auction

20Feb09

Previously published on Decorati.com

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By Emily Waldorf

It is staggering how many auction house clients, including seasoned collectors who should know better, fail to read the fine print when bidding at auction. In the February 2009 issue of Art + Auction magazine, art lawyers and brothers, Charles and Thomas Danziger discuss in their column, “Brothers In Law,” how important it is to thoroughly read (and re-read) the conditions of sale before registering to bid at auction. The Danzigers paint an all too common portrait of how one of their overly trusting clients, Ishmael, fell prey to auction house legalese. He embodied the impulsive, acquisitive attitude of the former bull market, collecting works with reckless abandon without fully understanding the auction process:

Ishmael’s troubles began in the wake of an evening sale that he hadn’t bothered to attend. On the strong advice of an auction house specialist, he had left the winning (and apparently only) bid on a sculpture given as collateral for a loan from the auction house to the consignor. Now the press was calling him a ‘sucker’ who had greatly overpaid for the work. That’s when he phoned us. ‘Don’t auction house specialists have to be straight with buyers?’ Ishmael carped. ‘Mine totally filleted me!'”

Do auction houses have a duty to disclose whether or not they have a financial interest in property being offered for sale? Collector Halsey Minor thinks so. He is currently embroiled in a lawsuit with Sotheby’s, alleging that the auction house “actively conceals information concerning its own significant economic interests in property that it places at auction,” and, furthermore, disguises itself as a “sincere and honest art adviser to plaintiff while in reality acting as a self-profiteer.” Even if Minor’s allegations against Sotheby’s seem extreme, it is clear that doing business with auction houses can be a potential minefield.

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Here are five simple guidelines for avoiding your own messy lawsuit when bidding at auction:

1) Pay close attention to disclosure symbols in auction catalogues and always read the fine print in the conditions of sale (which vary from one auction house to another) 

2) All lots are sold “as is.” This means that the buyer cannot return any property after a sale because they notice a scratch or because the dimensions are too big or small for a space.

3)  Try to attend the auction preview before the sale to visit works in person and avoid buying works from catalogue images or jpegs alone

4) In general, only the bold print at the top of the catalogue description (i.e. artist or manufacturer) is guaranteed and there is an expiration date on that guarantee. If there is an issue with authenticity, it should be brought up as soon as possible after the auction.

5) Always request condition reports and develop a relationship with an auction house specialist that you trust in your area of collecting. If you are a first-time buyer, enlist the help of an independent expert who can conduct due diligence

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5 Responses to “Buyer Beware: Be Sure to Read The Fine Print When Bidding at Auction”

  1. Interesting piece Emily, but it begs the question: how can an auctioneer represent both the buyer and the seller of an object? Fact is, they do and have been doing so, highly successfully, for centuries. Buyer remorse is a curious trait of human nature and one that writers like you (and me) should explore sometime.

    • Safe would imply that nothing could go wrong. Something could go wrong. I would think about it if there was a LARGE dsioept that would remain yours if the deal fell through, if the deal goes through it could go towards the price of the home, closing costs or where ever it could be worked in.You need ot take care of yourself. If you do this your home will be off the market. If the deal falls though you have to put your home back on the market. If the market has fallen further, you just lost money. You need to make sure you can get it back.You are taking on a risk doing this, the buyer should share in that risk.If is a buyers market, by doing this you may loose the deal. If you are going to be landlords insist on meating the people and discuss everything with them. Usually I would say have your real estate agents handle the sale but there is more going on here than jsut a sale.

  2. 3 artsetoile

    Very good point Christopher. Buyer remorse is definitely a curious trait of human nature and worth exploring!

  3. Quick aside, as always, Artsetoile greets me with an engaging abstract of art world here and now mind and body to wonder of it tomorrow… Bravo, Emily!

    As to ‘Buyer Beware…,’ How to lawfully mandate large print cystal clear disclosure transparency by independent dealers and auction houses of art as alike statutory laws governing Real Estate Brokers’ having a fudiciary responsibility always judged technically both agent to buyer and seller, and that a broker having an ownership interest in a property they represent is a supreme absolute be clearly and boldly disclosed publically or risk severe penalty, is a topic demanding address.

    Due deligence is individual responsibility or to engage independent trusted counsel with the appropriate knowledge and skill to oversight. Rumaging through a weekend flea market is not all that dissimilar as one attending to the much more sophisticated level of the art of negotiating more serious venues… if you are not on top of your game as a buyer or seller you have no gounds of remorse for being impulsive rather than mindful and pro-active in carrying around a large magnifing glass to read small print and a knowing shovel to dig around and clear away the you know what. It’s more human than not to always feel the taste of remorse in one’s mouth one paid too much or got too little for the price even if it was a sound deal tit for tat: It is hard to have sympathy… as the character, “Forest Gump,” spoke to remind … “Stupid is as stupid does.” As the current world economic drama clearly reveals for all its weave of threads in its making, we are in being human apt to do very stupid things for very stupid reasons with complacent complicity as whole no matter how loud the voice of knowing better pleads to our wiser intelligence. The value of art is found in its honesty and integrity of substance… Should not then then its vendors be of equal substance and accountability?

  4. As I watch the excesses at Christie’s in Paris, I imagine there will be a great deal of remorse in the cold light of the following morning. What about that chair? However, my point was this: waking up the morning after a sale thinking one has paid too much for something and regretting it until the joy of ownership takes over is one thing. But remorse that manifests itself when a regretful buyer aims to cancel a sale with some spurious criticism of the object or the auctioneer is something entirely different. Such buyers have no care for fine art and antiques. they are merely shallow show-offs.


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