The Auction House
THE ART OF THE DEAL
Almost anything can be sold at auction—from livestock and antiques to silverware and fine works of art. Auction houses have been providing a service to millions of investors since recorded human history. Derived from the Latin word augere, meaning “to augment” or “to increase,” the oldest auction house, Stockholm Auction House in Sweden, dates to 1674. By the 18th century, art auctions were held in public gathering spaces, such as coffeehouses or taverns, with pre-printed catalogs detailing the works to be sold. Many contemporary auction houses such as Sotheby’s (founded in 1744) and the world’s largest, Christie’s (founded in 1766), are rooted in these earliest traditions.
Every auction differs: The mood may be subdued or rowdy, depending on the type, quality, price, and “celebrity” status of the art up for grabs. Even in economically tight times, the value in a celebrity name such as Andy Warhol or Pablo Picasso can draw big spenders and even bigger crowds, expecting a spectacle of bidding wars and excited auctioneers. Beginning with an opening bid usually around 50 percent of the market value of the work of art, the auctioneer recognizes and raises bids in rapid-fire fashion. When the gavel falls, the hammer price, or nominal price at which the lot is sold, goes to the top buyer. The intricacies of the auction take years of practice and keen observation to perfect, but even a novice can appreciate the art of the deal. —SBR