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Auction

Thomas Rowlandson and Augustus Charles Puguin
Christie’s Auction House, 1808
Hand-colored Aquatint
10 x 12 cm (3.9 x 4.7 in.)
Yale Center for British Art, New Haven

The word auction has Proto-Indo-European root aug-, meaning “to increase”, and usually describes a public sale in which goods or services are sold to the highest bidder. A conventional auction physically takes place at an auction house with the bidders competing against each other with numbered paddles, while the price increases each time a bidder makes a new bid, eventually the highest bidder takes the item. The highest bid is not necessarily the final price paid for the items; a buyer’s premium is charged by the auction house.

Auctions deal with items on the secondary market, meaning that the inventory already has an owner; artworks would have been purchased on the primary market at the price that was established for the first time, with the ownership of the work being transferred from the artist to the buyer (collector, gallery, or an institution). The three most prominent international auction houses are Sotheby’s, Christie’s, and Phillips, each with their long history and foundation. Modern day auction houses were founded in the 18th century, including the three key players establishing in London: Sotheby’s in 1744, Christie’s in 1766, and Phillips in 1796.

Traditionally artworks were bought at auctions by dealers at bargain prices so they can sell them on to make profits. Nowadays, auctions are more than a secondary market, they create exciting synergy with every eye on each lot (a single item at an auction) to see if it makes the reserved price or remains the elephant in the room as an unsold lot. Spectators are also eager to find out if any artworks break any records; Frida Kahlo’s Diego y yo (1949) sold for $34.9 million at a Modern Evening Auction at Sotheby’s in November 2021, breaking the artist’s own previous public auction record, and becoming the most expensive artwork sold at auction by a Latin American artist.

Artworks that are for sale are listed in the auction catalog and available on view at the preview exhibition, where potential buyers can check the condition of the artworks. There are also short summaries including the background and interesting facts. Provenance (history of the ownership) is also an important information to look out for.

Auction, by definition, is supposed to be a democratic sport, as everyone has the chance to bid; but it definitely favors players with the most knowledge and passion. More you know about the history of the artwork or the artist, the better chance there is of winning the artwork at a reasonable price.

Frida Kahlo’s Diego y yo (1949) sold for $34.9 million at Sotheby’s New York.
Courtesy of Sotheby’s / Photo by Alexi Rosenfeld

Here are some terminologies related to art auction to help you better understand the process.

1. Absentee Bid: A method that allows bidding without physical presence, usually through filling out a form, via telephone, or online.

2. Bought-In: If there are no bids on a lot, or if bidding does not reach the reserve price, the lot is “bought-in”, meaning it is left unsold and remains the property of the owner.

3. Consignor: The owner who is assigning an auction house to sell their artwork on their behalf i.e. the seller.

4. Estimate: A price range given to the artwork which it is likely to be sold at; this estimate is based on the research around the artwork including any records of other artworks in the similar nature.

5. Hammer Price: The winning bid for the artwork; the hammer falls to indicate the bid is over. It is important to note that the hammer price does not include any fees.

6. Lot: An artwork offered for sale at auction as a single item.

7. Provenance: One of the most important parts of an auction where the chain of ownership is authenticated; it has a significant impact on the value of an artwork.

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