Saturday, July 19, 2008

“I’ve Bought a Painting. Now What Do I Do? -- Make Money!

For those of you who have purchased Fine Art, Antique or Collectible treasures, and are wondering where to re-sell them to make money, this Blog, about a purchase a 31 Club Member made, should give you some things to consider when re-selling a piece.

Mason has been communicating with me for several weeks, and last week he emailed me very excited about a purchase he made. I am asked to give my opinion on numerous items each day, and how to make money buying and selling antiques & collectibles, and often times I have to give the bad news that the item someone is considering to buy or has already bought has very little value. But in Mason’s case, I had very good news for him.

Mason had purchased a painting by Ellen Farr (1840-1907). It is a true treasure, and he has a good chance to make money, because it was new to the marketplace, plus it was untouched, making it even more desirable. Mason had seen that a painting by Farr had just sold for over $14,000 and that excited him.

This is the place where it’s important to have some knowledge about what makes a particular artist’s work valuable if you want to make money. First, you have to compare apples to apples. Mason’s painting was only 20 inches while the $14,000 painting was over 60 inches. Second, the larger painting was of a cherry tree, which seems to be a signature image for Farr, while the smaller painting was a still life. Yes, these both are desirable, but the larger painting will usually command a much higher price, and in addition to that, the cherry tree will bring more than the still life generally if it's a signature for the artist. This kind of knowledge will help you make money buying and selling antiques & collectibles.

Now that Mason is in possession of the painting, what should he do next? There are three main choices he could make to sell this painting. First, he could sell his painting at John Moran’s auction, because this is the auction house where the highest price was obtained for a Farr painting. But let’s take a closer look at this option.

If Mason made this choice, he could have to wait as much as three months for the next appropriate auction for his painting before he can expect to make money. In addition to that, the painting would be out of his possession for that amount of time, and if it’s up for auction, he has no assurance it will be sold. Because of the price he paid for it, he must sell it with a reserve (meaning a price it must reach or it isn’t sold). That reserve price might not be achieved. If it isn’t sold at the auction, then it’s no longer considered new to the market, and because of this, future buyers will discount its value. Last but not least are the high commission fees he'll encounter at auction which will eat away at his profit.

His second choice could be consigning it to the 31 Club Gallery. Here he would pay a much smaller fee and be able to retain a much larger percentage of the sales price for himself. It would be advertised on the Internet and the art guides which would give it excellent coverage, however again, there isn’t an assurance it would be sold.

His last option is to search the market for someone willing to purchase it directly from him. After Mason shared his painting with me, I began an extensive search for a buyer. After close examination by the people I called, I received an offer of $2800. This represented a profit of one thousand dollars. If he accepts this offer, he doesn’t have to wait for an auction and pay their commission fees. Once the purchase is completed, Mason can ship it directly to the buyer. Should he choose this option, he may receive a little less money, however he is assured his painting is sold. When you want to make money buying and selling antiques & collectibles, as well as fine art paintings, it helps to remember the purpose: To make money keeping our money turning as quickly as possible, and then do it all over again. Holding out for top dollar stagnates your money.

Yes, there may be circumstances where any of these options would be best, but what do you think Mason’s best choice is? You will be faced with this decision yourself soon. If he sold it for the $2800, what would his total be after the next ninety days, and how many more times would he have turned his money during this period of time? I am going to let you think about this because this is the core of what you’ll be doing.

I seem like I’m on a 50 state marathon this summer, because this weekend, I’ll be in Wisconsin. However, I won’t be gone long; I’ll return home Sunday.

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