Under-Quoting in the Art Auction Business

The art auction houses proudly proclaim on theirlooking for.
websites the remarkable achievement when aValuing paintings is not always as simple as doing
painting goes beyond 'expectations', but to mesimple calculations based on past prices. I
this shows that they either don't know theremember being at a Deutscher Menzies auction
market or have deliberately underestimated.and watching a Celia Perceval painting 'Picking
An example of this was at a Sunday Art AuctionDaffodils' with a realistic high estimate of $5,000
at Leonard Joel in Melbourne last year. The firstgetting knocked down for $38,400 after a long
lot of the day was an artwork by highly soughtbidding war between three or four phone bidders,
after Western Australian artist Robert Juniperleaving the auctioneer to whisper to the perplexed
titled 'Blue River, 1978'. At 43cm by 95.5cm it wasaudience 'do they think its a John Perceval'? The
a decent size for a Juniper, and with popular huesnext lot was another Celia Perceval with a higher
of blue and purple in a semi-abstract landscape itestimate that sold for only $5,520. These
was obvious that it would achieve a good price.situations are intriguing and add to the drama of
Obvious to many, but not initially obvious to thean auction, but we don't need the auction houses
auction house providing the estimates, whichto artificially create them. As a buyer, I would
provided an estimate of between $2,000 andprefer to have a more accurate indication of the
$3,000. However, upon calling the auction house Iexpected price so that I don't waste my time
was told that there had been a lot of interest inwith something that will ultimately be beyond my
the painting, and that they now expected it to gobudget.
for more that the high estimate. So why not raiseEven the most distinguished auction houses can
the estimate at this point? I said I would be happyget in wrong. I remember at one of Christie's last
to pay double the upper estimate, and althoughauctions in Australia looking at the estimate of
the offer may not have been taken seriously, it$5,000 to $7,000 on David Boyd's large 1960's
was still an indication that the estimates were toowork 'The Offering' from his important 'The Trial'
low. The auction results for the previous year alsoseries, and asking the staff it was a typo and
indicated a much higher value. The average pricewas actually supposed to be $50,000 to $70,000.
for a Robert Juniper oil in 2008 was $16,260 withI was told that the estimate was correct, and the
an average price per square cm of $2.15.painting sold for $50,190 including buyers premium.
Multiplying this figure with the actual size of thisFor an up-coming example keep an eye on William
painting (4106 sq cms) would give a baseBoissevain's 'Unititled, c.1970s' at Bay East's auction
valuation of $8,827. Making some adjustments fornext week. Similar paintings usually sell for
the general quality of this work and the smallerbetween $6,000 and $8,000, although this painting
than average size (smaller paintings generallyis offered with a high estimate of only $2,500.
achieve a higher price per sq cm), I would haveI will continue to enjoy the theatre of those
thought that an estimate of $10,000 - $15,000genuine auction surprises, but with so many
would have been a more accurate estimate. Theresearch tools available, feedback from the
painting sold for $27,600 including buyers premium,viewings and years of collective experience of the
which was still well above even my ownauction house staff, apart from the rare
estimates. Even with a more realistic estimate theexception there should be no excuse for getting it
result would still have set the auction off to theso wrong.
desired dramatic start that they were probably