Lessons in Auctions: Understanding Estimates

This vase had an estimate of $600-$800,

 but sold for $3,250. Misappraised? Misguided bidders? You decide.

Auction estimates are a curious thing. Oh, not by definition; the definition of estimate, in fact, is pretty straight forward: the anticipated hammer price of an item, not including the buyer's premium. I'm talking in practice, for in practice, estimates can take weird little twists and turns. What auction addict hasn't encountered this scenario? You leave a high absentee bid--cause you want it--for something, then log in later, gleefully expecting to schlep it home soon, only to see that the darn thing went for several times the high end of the estimate. What happened? And how can you avoid that happening again?

Title and estimate for a Jacques Villon drawing,
at auction at Christie's, New York, on June 21st

Before we get to that, let's talk about how estimates are derived to begin with. The bigger, more established auction houses have specialists in different departments:  consign a English glass compote at Leslie Hindman in Chicago or Doyle in New York, say, and chances are it will be examined by someone with a background in that collectible. This is absolutely true at Sotheby's and Christie's, where the array of specialists is really quite mind blowing ("maritime pictures," "gold boxes and vertu").

But that's the big places. Smaller auction houses rely on generalists, sometimes even just one, to appraise items. Now, these men and women may have great eyes and know an impressive amount about an impressive array of goodies, but, well...mistakes are occasionally made.

Yet, sometimes, even if a skilled specialist has come up with a very accurate estimate, the final hammer price is vastly different. Why? Here are a few things that can throw a wrench in the bidding process:

1. Uniqueness - Items that are one of a kind, or even simply unusual, are harder to price, since there are fewer true comparables. They also can have tremendous appeal to collectors, who can develop a "now or never" mentality. And an item doesn't have to look singular to be singular: the usual palette might be slightly tweaked, say, or the animal's foot could be subtly different.

2. Provenance - Don't underestimate the celeb factor. Auction houses often tout estate sales of the powerful and glamourous because doing so boosts media attention and hammer prices. It can work, but usually only if the item is clearly identified with the celebrity: the piano of a famous musician, for instance, or a personal photograph. The exception is when the celeb is known as a real tastemaker, such as Yves Saint Laurent. In those instances, even a toothpick could have cache and a higher hammer price.

This pagoda had an estimate of $3,500-5,000
but sold for $8,000. Is it because pagodas
 are the new black?

3. Seasonality - I was selling diamond necklace at Sotheby's one time, and the specialist wisely encouraged me to wait for the December sale. Why? Because December equals panicked people with long shopping lists. Two desperate but well off bankers will think nothing of engaging in a bidding war that jacks the price of a glittery piece up well beyond the estimate--they know they are still paying a fraction of what they'd pay on Madison Avenue. The same concept applies to outdoor garden pieces and so on. Generally, you want to buy off peak and sell peak, so plan accordingly.

4. Trends- Coco Chanel made coromandel screens chic. Mid-century, they fell out of favor, and now, they're back again, in no small part due to White House decorator Michael Smith's frequent and innovative use of them. Pagodas are another hot item: these days, they're towering above every single console in Elle Decor it seems. A few years ago it was bird cages. Appraisers' data can be slow to catch up to such fast moving trends; be aware of what's coveted and bid accordingly.


5. Caution - Appraisers don't like to get in trouble. Sometimes (and this happens more frequently with generalists), they'll err on the side of caution and describe something as Rococo "style," say, when it's really Rococo. Sharp-eyed bidders often know the difference, and that's reflected in the final hammer price. 

This "Venetian style" chair had an
 estimate of $300-$500, but sold for $3,200. Unique? Um, certainly.
But such a discrepancy also suggests it was the real deal.

6. Irrational Exuberance -  Sometimes, there are just people who really, really want something. Period.

Hopefully, my dearlings, these little tips help. Just remember: at the end of the day, buying at auction is not an exact science and that's part of the fun of it!