Art can prove a great investment over time. However, one of the biggest challenges with collecting art is the illiquid nature of the investment. Even if a particular painting has gained a considerable amount of value, you will only realize that gain once you find someone willing to pay the right price. While the idea behind collecting art is to hold it for the long term, you will eventually need to find a buyer if you want to convert the investment into cash. For that reason, art collectors should always have some sort of exit strategy in the back of their minds, especially since how you plan to sell a piece can have a drastic effect on how much you receive for it. For example, putting the piece up for auction can drive prices higher, but you also run the risk of having few bids and letting it go for less than it is worth.
Before you begin looking for a buyer, be sure you have all the paperwork associated with the piece in order, including provenance documents. You may also want to get an official appraisal to understand the current value and use it as a bargaining chip as you negotiate the price. Once the piece is ready for sale, there are several forums you can consider in terms of getting a buyer. These include:
Other collectors
One of the easiest ways to sell a piece is to connect with other collectors. Take note of anyone who seems particularly interested in a piece and think about offering it to that person directly when you are ready to sell. You can also consider talking to the artist or revisiting the place where you purchased the piece to see if they know anyone who would be interested. Sometimes, artists will actually buy pieces back if they think they can sell them for more money in the future. The benefit of striking a direct deal with another person is that you cut out the middlemen, all of which will take a cut. At the same time, there is some risk in not involving a third party since these transactions can get complex. If the sale is not going to be straightforward, you may want to involve a professional to help. Be sure to write a formal contract for sale and have all involved parties review it before signing to avoid any surprises.
One of the easiest ways to sell a piece is to connect with other collectors. Take note of anyone who seems particularly interested in a piece and think about offering it to that person directly when you are ready to sell. You can also consider talking to the artist or revisiting the place where you purchased the piece to see if they know anyone who would be interested. Sometimes, artists will actually buy pieces back if they think they can sell them for more money in the future. The benefit of striking a direct deal with another person is that you cut out the middlemen, all of which will take a cut. At the same time, there is some risk in not involving a third party since these transactions can get complex. If the sale is not going to be straightforward, you may want to involve a professional to help. Be sure to write a formal contract for sale and have all involved parties review it before signing to avoid any surprises.
Auction houses
One of the most common ways to purchase art on the secondary market is through an auction house. A reputable auction house will attract serious collectors who want to spend money to get the pieces they desire. If your piece starts a bidding war, you may end up getting much more than you thought for it. However, as mentioned, there is always the risk that you will not get the price you wanted. You may set a reserve, but that does not mean the piece will sell. In the end, you could end up owing money and not having a buyer at all depending on the policies of the auction house. The benefit of going with an auction house is that they handle the entire acquisition from start to finish and often have their own appraisers so it saves you a lot of work. Of course, the auction house will take a portion of the sale to cover the expense of providing this service.
One of the most common ways to purchase art on the secondary market is through an auction house. A reputable auction house will attract serious collectors who want to spend money to get the pieces they desire. If your piece starts a bidding war, you may end up getting much more than you thought for it. However, as mentioned, there is always the risk that you will not get the price you wanted. You may set a reserve, but that does not mean the piece will sell. In the end, you could end up owing money and not having a buyer at all depending on the policies of the auction house. The benefit of going with an auction house is that they handle the entire acquisition from start to finish and often have their own appraisers so it saves you a lot of work. Of course, the auction house will take a portion of the sale to cover the expense of providing this service.
Galleries
Most people think of galleries as working in the primary market, but they also often participate in the secondary market, as well. If a gallery is particularly focused on an artist, style, or time period, you can often negotiate a price since the gallery will want to control as many pieces as possible. Often, galleries will hold on to pieces to avoid flooding the market and thus giving them an artificial control over supply and demand. By holding pieces, they can drive up demand. If you are not already involved with your local arts scene, start going to openings and exhibitions. By networking, you will start to learn which galleries might be interested in the particular pieces that you have. If nothing else, galleries also have a huge network and can likely connect you to an interested buyer. However, this may involve a fee.
Most people think of galleries as working in the primary market, but they also often participate in the secondary market, as well. If a gallery is particularly focused on an artist, style, or time period, you can often negotiate a price since the gallery will want to control as many pieces as possible. Often, galleries will hold on to pieces to avoid flooding the market and thus giving them an artificial control over supply and demand. By holding pieces, they can drive up demand. If you are not already involved with your local arts scene, start going to openings and exhibitions. By networking, you will start to learn which galleries might be interested in the particular pieces that you have. If nothing else, galleries also have a huge network and can likely connect you to an interested buyer. However, this may involve a fee.
Art dealers
Another way to capitalize on someone else’s network is to engage an art dealer. Likely, an art dealer knows someone willing to pay top dollar for your piece, or at least they know someone who can further help. Dealers leverage their network to get high prices for art, especially if it is within their primary focus. You should always research art dealers before you engage to figure out who may be able to best serve you as you look for a buyer. Keep in mind that the fees between dealers can vary quite a bit so always be sure to ask and know up front what you will owe down the line. While art dealers do not make the process as painless as an auction house, they can help with many of the details since they are so familiar with the process.
Another way to capitalize on someone else’s network is to engage an art dealer. Likely, an art dealer knows someone willing to pay top dollar for your piece, or at least they know someone who can further help. Dealers leverage their network to get high prices for art, especially if it is within their primary focus. You should always research art dealers before you engage to figure out who may be able to best serve you as you look for a buyer. Keep in mind that the fees between dealers can vary quite a bit so always be sure to ask and know up front what you will owe down the line. While art dealers do not make the process as painless as an auction house, they can help with many of the details since they are so familiar with the process.
Organizations
You may not immediately think about organizations like museums or universities as potential buyers, but they usually have people in charge of acquisitions if they have any sort of permanent collection. The important point to keep in mind here is that people often donate art to these organizations so they may not pay the most competitive prices. At the same time, it’s nice to know that the piece will be enjoyed by many people for years to come. If you value this type of legacy, it may be in your best interests to seek out organizations that may be interested in a particular piece. You can also consider donating some pieces, as this will come with a rather sizable tax break.
You may not immediately think about organizations like museums or universities as potential buyers, but they usually have people in charge of acquisitions if they have any sort of permanent collection. The important point to keep in mind here is that people often donate art to these organizations so they may not pay the most competitive prices. At the same time, it’s nice to know that the piece will be enjoyed by many people for years to come. If you value this type of legacy, it may be in your best interests to seek out organizations that may be interested in a particular piece. You can also consider donating some pieces, as this will come with a rather sizable tax break.
