You are interested in a work of art but you are uncomfortable with the price?  Produce a credible counter-offer.

 

A credible counter-offer is essentially a documented counter-offer.  It is a realistic counter proposition corresponding to an objective assessment of the price of the work and ensures that both parties come out winners in the transaction.

 

How to proceed:

  1. First, you identify some "comparables". As for the evaluation of the price of a home, a car, etc., it is based on prices obtained from equivalent works recently sold at auction. Our site offers access to several databases accessible via the Internet which, at minimal cost, will allow you to find the price obtained for comparable works recently sold (5 years or less). The two most interesting sites for Canadian works remain the Heffel Art Index and the Canadian Art Sales Index Online.
  2. Once your "comparables" have been identified, establish the average realized selling price.   WARNING: some reference sites publish the results including the commission paid by the buyer (Buyer's Premium). For the purpose of calculation of the "hammer" price, you must subtract the amount of the commission of the published price.   See calculus formula1.
  3. Using our simulators, find the exact amount that will maximize the gain for both parties. This means that you will have to determine:
  4. Specify the amount where the gain will be optimal for both parties (see example below).
  5. Make an offer to the seller that approaches this amount by exposing your approach.  The seller should be able, after analysis, to come up with results that replicate yours.

 

Example:

Your research of "comparables" indicates that the average realized price ( "Hammer price") at auction in the past 5 years for a similar work (medium, size, time, etc.) of the artist in question is $ 10 000.00.

  1. First, specify how much the seller will actually have received from the sale of his work.  For example, you will determine that the seller has had to pay a minimum fee (commission, insurance, etc.) of 10% for the sale of the work, i. e. he/she has received a maximum of $9,000.00. See our calculator " How much can I expect to get from selling my work at auction? "

  2. Specify thereafter the amount really paid by the purchaser for the acquisition of such a work. For example, you will determine that the buyer on its side had to pay a "Buyer's Premium" of about 20%, plus all the usual taxes (15% in Quebec), and so on.  All add-on, the buyer will have to pay about $ 13 700,00, excluding transport costs.  See our calculator "How much will it cost me to acquire a work by auction?".

The optimal gain for both parties is $ 11 350,00, which is the average between the amount obtained by the seller ($9,000) and the amount paid by the buyer ($13,700).  At this amount, both parties share equally the savings obtained ($2,350.00) and both are winners in the transaction.

Need help to assist you in your researches? Contact us.

1The commission paid for by the buyer (Buyer's Premium) is expressed as a percentage (%). Example: 20%. This percentage (%) varies depending on the auction house and the amount involved. It is calculated on the "hammer" price. For example, a work allocated for 10 $ 000.00 at auction ("hammer" price) will cost $ 12,000 to the buyer once the 20% commission is added.

Once the buyer's premium (%) is known, use that percentage to calculate the "hammer" price.  The formula is the following: price, including buyer's premium (eg $ 12 000.00) divided by 1+ (%) in question. 

Example: for a buyer's premium of 20%, the formula is as follows: $ 12 000.00 / 1.20 = $ 10 000.00.