Editor's note: The following article was rekeyed and reprinted on December 23, 2008 in Resource Library with permission of Lonnie Pierson Dunbier. The article is an excerpt from Dr. Roger Dunbier's unpublished writing of 601 pages titled WEST IS WEST: Your Money's Worth in Original Painting. Dated 1982, the original typewriter manuscript is owned by his wife, Lonnie Pierson Dunbier, who edits and submits the chapters to TFAO. If you have questions or comments regarding the article, please contact Lonnie Pierson Dunbier in Scottsdale, AZ, at ldunbier@mac.com.
Top Auction Houses and Carmel Green
"An auction is legalized gambling!"
By Roger Dunbier, PhD (1934-1998)
At the outset I would like the reader to know that the term 'top' auction house was put down on paper only after considerable deliberation. 'Top', along with an abundance of once meaningful words, has been so devalued by advertisers and disc jockeys, etc., as to be rendered next to meaningless. However, 'top' seemed appropriate enough after the term 'Great Auction Houses' kept cropping up in publications I read by English authors referring to Sotheby's and Christie's in London. If these persons could, operating under the decorous, indeed mandatory, strictures of British understatement bandy about with almost unseemly ease the word 'Great', then this Yank could surely make use of 'Top' to describe these two firms and a handful of others, which cater to an important and growing auction marketplace here in this country.
Be it 'top' or 'great', the question arises: what makes them so? Are they top or great for Western art? And even more important, are they 'top' or best for me?
Christie's and Sotheby's have been for over two centuries household words to the propertied families of England. They offered for sale books, clocks and suits of armor. Incredibly, they also auctioned a panoply of everything else under the never setting sun of the old British Empire. Among these were, of course, works of fine art, which indeed seemed to occupy a special position of sorts with these stalwart concerns. Newspaper articles concerning 'great sales' by them focused on the record prices received for Old Master and other paintings. Out of this has grown a somewhat exaggerated, but none-the-less real reputation of being judgmental, even persnickety in their fine art business. From this, in turn, has evolved in the public mind an aloof image, which these auction houses have in recent years worked diligently to dispel.
There is weight of history here. Over their long lives, these houses have readily accepted for sale almost any collection of books on topics infinitely obscure or any suit of armor, no matter how unserviceable. However, since so many British households harbor accumulations of all the watercolors that great aunt Cynthia never quite finished while on holiday at Brighton, they have been well advised to limit quite severely the kind of pictures they will accept for sale. One should modify this statement, however, because it is more strictly accurate to say 'accept for sale as a single item with a published description in one of their illustrated catalogues.'
Either way, a kind of mystique has evolved surrounding fine art put up for sale at these two London based auction houses. Since both of them have now crossed the Atlantic, bringing with them their aura in addition to their modus operandis, it is well that we former colonials be aware, but not overwhelmed by their earned as well as unearned reputation for selectivity. The potential buyer can profit from the former, but should at the same instance discount the latter, and yes, the average collector, even the novice collector or one-time buyer of a single painting can do business with either of these concerns as well as with their more strictly American competitors such as William Doyle and Butterfields, etc., among others.
Before seriously contemplating participation in an auction as a buyer, a certain limited number of transaction factors must be taken into consideration. 'Limited' is here used advisedly as entire books have been written on the subject of auctions -- the buying side alone.
The first element ranking well above all others is the potential of obtaining a real price break. All auction houses, no matter how prestigious, must offer this possibility to their buyers or they would cease to exist. At the same time, these top auction houses must compete with each other and the entire fraternity of dealers to obtain consignments, for without them, they would also disappear. In this competition for sellers, the auction houses promise and deliver high prices. How can these contradictory ends be met?
The answer lies in several directions. One of these is that despite increased overheads at the 'top' auction houses, their cost of doing business per item under the hammer is still less than that of the commercial art galleries. The reason for this is found in volume and turnover and the passing along of insurance and shipping costs to the clientele as well as ancillary services that generate income, which defrays much of the overhead such as catalog sales and appraisal fees.
Of commensurate importance is the racetrack or Las Vegas element. An auction is legalized gambling! Casinos prosper in their zero sum activities by promising as well as delivering winnings to both the gamblers and the hotel shareholders, not equally and not always, but the possibility does exist for the 'wagerer' to make a profitable night of it, even a killing.
The odds at an auction house are considerably better. An auction is a game of chance where the possibility exists for all the players to win. The consignors may realize the highest prices possible at the moment which permits the auction house to enhance its commission. At the same instance, it allows the buyer to purchase what he desires at prices well below retail. Mind you, this does not take place with clock-like regularity. The most experienced of the clientele at auction will on a given evening 'steal' lot A, let an even better lot B get away, and pay too much for lot C -- all in the span of a few minutes. (That's right, a few minutes, as these top auction houses will sell thousand dollar items at a rate considerably faster than a country auctioneer can sell five dollar flat irons.)
The facts are then: 1) the top auction houses will on the average sell paintings at prices considerably less than retail, with usual estimates running from sixty to eighty percent; and 2) that regarding any single lot, these averages mean little indeed. As theory has it, the auction embodies a pure market situation, where two or more knowledgeable bidders coveting the same item will offer what they believe the piece is worth, and the price realized will be the fair market value at that time and place.
Those who are fond of quoting auction prices as true market value use this situation to substantiate their case. It is true that the well-publicized sales at the top auction houses usually bring forth the requisite two or more bidders, whereas country auctions often fail. But what many of us choose to ignore is that rules that may well apply in the auctioning of tobacco or livestock are scarcely germaine to original fine art.
Paintings are not like cows or umbrellas, which are produced by, and replaceable through an economic system in which all buyers and sellers make the same assumption that the system will continue to assemble or breed them.
Original painting is by definition one of a kind. A collector or dealer seeking a specific item cannot pick up the telephone and order the desired piece, particularly so if the artist died in 1903. The potential buyer has to wait and seek. He may not find it, and if he does, circumstances may prevail that circumvent his obtaining possession. Should this transpire at auction, our potential buyer cannot drop a note to the auctioneer requesting he somehow conjure up a similar painting for the next sale.
This intrinsic uniqueness of fine art product, if you will, is matched by the unique composition of any body of people interested in that product who may attend the auction where it is put up for sale.
Let us suppose that a Julian Rix California coastal seascape painting comes up for auction at Sotheby's in Los Angeles. Two suburban couples, both Rix collectors, decide to attend the sale. Both, by chance, are willing to spend as much as four thousand dollars, which is at least a thousand less than any comparable Rix that either had recently seen displayed in a La Cienega or Melrose Place Gallery. Also in attendance are half a dozen dealers. One is moderately interested in Rix and willing to pay as much as thirty-two hundred dollars, which he considers a reasonable wholesale price. The auction begins, and in time the lot number is called and the painting displayed -- a tile-red sun setting over the Pacific casting orange light on the rocks at Carmel. One of the suburban wives turns to her spouse: ". . .but our dining room is green, it's Carmel, I thought it would be green!"
This couple promptly drops out. The remaining couple obtains the Rix for thirty-three hundred dollars, over bidding the remaining dealer. Now, in fact, the warm-toned painting in a rich gold frame might have gone very well in that green room, or it could have been hung in another room, or the room could be repainted, etc. But at that critical moment, a feminine voice in an ear meant at least seven hundred dollars more remaining in the bank account of the winning bidders. This figure may indeed be an underestimate as the auction room excitement of competition for the piece might have carried the bidding over the originally held four thousand dollar limits.
Thus, in our not atypical vignette, random acts guide the auction market, even for the 'top' houses. A painting by a deceased Western artist was, (A, sold at auction for a price considerably under what the painting would have cost at a commercial gallery, and (B, the price realized was determined by the color of a room in a suburban house, and a housewife's desire to keep it as it is, all green, the 'way Carmel should be'.
About the Author:
From 1982, Dr. Roger Dunbier (1934-1998) combined his professional
economics training, research skills, and love of art to develop an easily
accessed, 'all-in-one-place' repository of factual information so that buyers
and sellers of American art could make decisions based on hard-core data
rather than just marketing hype. With ever-more sophisticated computers,
programmed by Charles Lefebvre, his long-time associate, Dunbier built an
artist record database, which by the time he died 16 years later, had 21,357
names linked to their respective auction prices, literature and biographies.
Today the result of his dedication lives on as the foundation of AskART.com,
an internet site since 2000.
Dunbier's innovation of computer systems began in 1963, when he pioneered computer mapping on what were then relatively primitive computers. In 1967, he utilized concepts of 'arbitrage' and 'comparables' in designing the first real estate Multiple Listing System. Its direct descendent remains in use by realtors across the United States, and he later applied the same underlying principles in building his artist database. (right: Roger Dunbier, photo courtesy Lonnie Pierson Dunbier, derived from a larger image at http://tfaoi.org/am/16am/16am17.jpg)
Dunbier was born and raised in Omaha, Nebraska. His interest in American art was natural because his father, Augustus Dunbier, (1888-1977) was a prominent landscape, still life and portrait painter and art teacher, whose studio and classroom were in the family home. Although Roger showed few 'right brained' skills, he did have other talents. He graduated first in his class and Summa Cum Laude from the University of Omaha in 1955 with majors in economics and history. He then received a Marshall Scholarship, which led to enrollment at Oxford University in England from 1955 to 1959. During that time, he was on the Oxford University basketball and track teams, and was a member of the British National Basketball Team. In 1961, he received a Doctorate of Philosophy, Economic Geography from Oxford. His dissertation, The Sonoran Desert, Its Geography, Economy, and People, was published by the University of Arizona Press in 1960, and subsequently used as a text book for college geography courses.
After formal education, Dunbier held full-time professorial positions for several years at the University of Omaha and the University of California-Irvine. He lived most of the remainder of his life in Phoenix and Scottsdale, Arizona, and had economic-geography related jobs including CEO of his management consulting firm that prepared demographic and locational studies; and President of Metro Press, Inc., publisher of over 100 computer generated area directories for Metro Phoenix. In 1991, he married Lonnie Pierson of Lincoln, Nebraska.
About this article's editor
Lonnie Pierson Dunbier of Scottsdale, Arizona and originally
from Nebraska, married Dr. Roger Dunbier in 1991. From then, she worked
full time on his artist database. After his death, she co-founded AskART.com,
for which she was Research Director from 2000 to 2007. Ms. Dunbier is also
the editor of all other excerpts from Dr. Roger Dunbier's unpublished writing
of 601 pages titled WEST IS WEST: Your Money's Worth in Original Painting
Resource Library editor's note:
readers may also enjoy:
and for a complete listing of Roger Dunbier's articles please click here or here.
Search Resource Library for thousands of articles and essays on American art.
Copyright 2008 Traditional Fine Arts Organization, Inc., an Arizona nonprofit corporation. All rights reserved.
