6 Common Mistakes Art Collectors Make
It’s no surprise that most art collectors buy art for sheer pleasure and enjoyment rather than for investment or speculation. However, most are unaware of the potential risks that come with ownership of art such as damage, loss and authenticity issues.
Regardless of one’s intention for buying art, it is more important than ever to conduct proper due diligence when buying art and resist the urge to buy on impulse, even if money is no object. As we live in a time marked by volatile art markets and increased legal risk, buying without putting in place certain protections can potentially have long-term adverse (and costly!) effects on your collection and its value. Read below to learn about how to avoid the six most common mistakes collectors make when buying art:
- No Art Insurance. Many collectors of fine art, antiques, stamps or otherwise don’t realize that their small infatuation for a certain type of object has the potential to grow into quite a sizable collection that may have substantially increased in value over time. Without art insurance you not only risk not getting the full amount covered in case of damage, theft, or loss especially in the current context of a booming art market but also risk overpaying for insurance if values have deflated at all. There are quite a few great options for insurance companies that specialize in art such as Chubb and AXA Art. They can provide the most affordable and forgiving policies which provide more coverage than your average Home or Property policies. Generally low cost, art insurance is a relatively small amount for peace of mind knowing that your art is fully protected and that the true value is covered.
- Forget to Inspect the Art. Have you ever gone to an art fair and spotted an object you fell in love with and bought it on the spot? It’s easy to do with the frenetic energy that sometimes accompanies art fairs and the race to buy art before someone else snatches it up. Remind yourself to PAUSE. Stop and look slowly and intently at the object. You want to look for any visible wear and tear, unusual markings, signatures and dates and general irregularities on the surface. Don’t be shy to ask about curious markings or cracks. Always ask the seller for their opinion on condition. While a Condition Report would be ideal most do not have one readily on hand but if the work was restored in the past or not you can inquire to see the restorer’s report.
- Don’t Have an Invoice. One of the first questions I ask clients is whether or not they have invoices for their original purchase or any other documentation related to the object or transaction. Surprisingly, the answer is usually ‘no’. Most collectors either say they bought the work with no intention to sell it or they didn’t want the hassle of paperwork. Whatever the case may be, that one piece of paper can be your only proof of purchase and verification of an object’s actual materials, authenticity or even provenance. Galleries can go out of business and they are also not obligated to archive sales records so be sure to ask for a DETAILED sales invoice and store it in a safe place. Looking to sell an artwork? Needs to insure it? Want to donate to a museum? You will likely need certain documentation to support any future efforts for resale, insurance, donation, or appraisal. If there is only one document that you can save, let it be the original invoice and do not be shy to ask the seller to include all of the following information: 1) all artwork details such as Artist Name, Title, Year, Dimensions, Materials, Edition number/edition size and Signature Inscription, if applicable; 2.) a thumbnail image of the front and back of artwork; 3) asking price, any discount and tax, if applicable; 4) buyer and seller name and address. An added bonus would be for the seller to include a short statement about the title of the work is being transferred to the buyer free and clear. Ideally, every object you own should have a separate file that contains the following documentation: 1) sales invoice (aka Purchase Order) with images; 2) certificate of authenticity, provenance and exhibition history, if any; 3) list of past literary references or publications, if any; 4) appraisals, scholarly statements and press clippings. And if possible, photocopies of the work published in the artist’s catalogue raisonné. Not only will good record-keeping help preserve an object’s history, it can also serve as supporting evidence if you ever need to answer questions about authentication or valuation. It will also save you a lot of time and headache during estate planning, insurance valuations, IRS audits or charitable donations!
- Improperly Hang or Mistreat Art. Billionaire Las Vegas collector, Steve Cohen famously knocked his elbow into his iconic 1932 Le Rêve painting by Pablo Picasso worth $139m at the time. Not hanging your art away from heavy traffic (and with faulty hardware) can prove to be a very risky endeavor indeed. Hire a professional art installer (your art gallery should be able to recommend one) who can assess the quality of your walls and the appropriate hanging hardware. They can find the studs in your wall, determine if the piece needs a D-ring or a French cleat and center the work as well as securing the work safely to your wall. It is also important to consider hidden environmental factors such a humidity, mold, smoke and sunlight. They may not be so obvious but can prove detrimental to your artwork over a period of time. Avoid hanging your art next to windows, in humid environments or near areas where temperatures tend to fluctuate. Places that are less than ideal for artwork include bathrooms, boats, beach houses, fireplaces, and near air conditioners or heaters. If you are putting art in a basement be sure to install a dehumidifier and do not place any artwork directly on the ground in case of flooding. As a general rule of thumb, consider the medium. Works on paper, prints and photographs tend to be more vulnerable and oil paintings tend to be more stable and forgiving. When installing or de-installing your art, pay extra attention to handling your art with care. Wear gloves, pad the corners (to avoid hitting art against walls or furniture) and move the art slowly from one place to another. If there’s any damage or loss, always hire a professional restorer or skilled conservationists. NEVER attempt to restore a work yourself. Remember, art and frames are fragile so err on the side of caution and handle with care.
- Lose Track of Art. Keeping track of all your art objects can seem like a tedious and thankless task but it can nevertheless save you a lot of time and headache when you need to locate it at a moments notice. The mansions of American banker and avid art collector, Ron Perelman and the art world’s most famous art dealer, Larry Gagosian survived massive fires with all their art in tact due to impeccable art tracking systems in conjunction with rapid response firefighters. You don’t have to have high tech software to track your art inventory but even a simple Excel sheet can potentially save you a lot of time and money. Storing art at multiple residences, storage facilities or even in a large multi-room residence can make it even more difficult to manage your art even if you proclaim to have an elephant memory. Make it easy on yourself and get an inventory tracking application like CollectorIQ, Gallery Systems or an easy-to-install software program like ArtBinder or FileMakerPro to help you turn the burden of inventory control into a thing of the past. These applications can allow you to keep your entire collection under one roof and some can even store the entire history of your objects movements, valuations, and activity as well as store multiple images and documents related to that object. Your collection should be a controllable asset that you can easily show off and enjoy. Just remember to keep your collection updated!
- Buy ONLY What You Love. Contrary to popular opinion it is not always wise to buy art solely on the basis of falling in love with it–especially if it is purely for aesthetic or decorative reasons. If you are interested in collecting emerging contemporary artists of merit, you are most likely interested in the fact that the work is challenging you to take a new perspective or pushing you in a new direction. While it one may seem counterintuitive to buy something that you do not truly love, the idea here is to not ONLY buy art that you love but also art can either challenge your way of looking at art or positively affect or influence you in a way that is new and innovative. If you buy only what you are already familiar and comfortable with as a collector, you avoid taking risks and pushing yourself to experience and learn something new. Furthermore, you risk the art being derivative of some other artist and as a result not being particularly extraordinary. A great artist is one who influences other artists through their work and who has a profound effect on the broader culture. Contemporary art oftentimes includes a premium with the expectation that that artist will have cultural relevance in society and will influence the next generation of artists. So even though it is important to buy what you love, it is also important to take risks and buy what makes you think or feel differently, too. Great art, if it is to be innovative and groundbreaking should make you feel uncomfortable and push you out of your comfort zone at least until you feel a real connection to it. Art has the wonderful ability to further open your mind to new ideas and find inspiration even if initially, you didn’t love it at first sight.
The good news it it is very easy to avoid all these mistakes! Just remind yourself of this post the next time you go on an art shopping spree or enlist the help of an art advisor.
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Photo credit: Matthu Placek