Smart Consumer: Going for a song...and a dance!
A vase with a reserve price of €150 this week sold for €110,000. Why do valuers get it wrong so often?
Published 04/03/2010 | 05:00
The news that a Chinese vase with a reserve price of just €150 sold at an auction in County Laois for €110,000 unfortunately highlights the fact that antique valuers get things wrong far more than many people realise.
A bidding war erupted at Sheppards Irish Auction House in Durrow on Tuesday after two international antique collectors who had trawled the internet recognised that it was an authentic Imperial vase. The buyer, London antique dealer Richard Peters, said that the vase was made for the personal collection of the Emperor Qianlong in the 18th century.
It is likely that anyone hearing this tale who has an old picture, prize bit of furniture, item of pop memorabilia or oriental vase gathering dust in the garden shed would think twice about submitting the item for valuation -- and they would be right to do so.
Although the underestimation of the worth of this particular vase appears to have been pretty spectacular, significant mistakes are all too common. And I speak from painful experience.
For example, I took an old Chinese drawing to two big London auction houses and at first both said confidently that it could be worth "many thousands of pounds".
However, several weeks later, the valuations had changed dramatically. The two then said that it was worth around €100 and could I please remove it from their offices as soon as possible.
On another occasion I took an oil painting by renowned 'kitchen sink' painter John Bratby and an aquatint by French cubist Jacques Villon to 11 auction houses and the results were quite shocking. The valuations for the Bratby varied from nothing, ie. worthless, to €2,200, with seven only putting the value above €100 when I explained who the artist was -- which I thought was their job. Valuations for the Villon varied from €10 to over €5,000.
Just this week I have received valuations for a Victorian table and mirror and again the valuations varied widely. Bonhams in London reckoned the Victorian table to be worth about €450 at auction, while Christie's suggested an auction estimate of between €660 and €880.
An art dealer offered me €165 for the mirror, while one valuer at Bonhams suggested it was worth about €650 to €850. Another said that he thought it was worth between €880 and €2,200.
Auctioneers will say that valuations depend on a lot of things, including the condition of the work and the state of the market. They may say that a conservative estimate may create more interest than an over optimistic one. Yet that does not seem to be an acceptable explanation of why their estimates can routinely differ so much.
A clause in the conditions of business of many auctioneers indicates that valuations are a statement of opinion only. They are not legally binding, so it would be very difficult to sue if an error was made.
Often, you are very unlikely to learn that your property was sold at bargain-basement prices unless you follow art sales very carefully and have extensive knowledge of the art world.
Although it is in the interest of the auctioneer to sell at the highest price possible, it may be equally tempting to quote a lower price to encourage a fast turnover of sales.
Even unsold lots can incur a charge, and there will often be a charge for including an illustration in the all-important sales catalogue.
The grander auction houses can be quite daunting places for the man on the street bringing in an artwork he suspects may possibly have a value, but which he knows nothing about.
As you sit in the plush lobby, surrounded by priceless pieces, it is no wonder that a valuer's words are usually taken as gospel.
If it wasn't frustrating enough to know of the possibility of your priceless heirloom slipping through the net and being sold at knockdown prices, realising the huge rates of commission they charge is even worse.
Commission rates vary depending upon the item sold and location of the auction house, but the most established houses typically charge up to 25pc to the buyer and more than 12pc for the seller.
It is not surprising, therefore, to learn that the value of shares in Sotheby's doubled in 2009.