The art of investing: paintings, sculptures or drawings between the pleasure of beauty and performance

2021 was the record year for the art market. Sotheby’s had top sales of $ 7.3 billion, and Christie’s was no different, with sales at the highest level in the last five years of $ 7.1 billion. According to The Art Market 2022, created by Art Basel & Ubs with studies of Economics Art, 2021 after the critical year 2020 had a setback of 32% with global sales of $ 26.3 billion.

The big push obviously came from Hnwi, individual with high net worth, world scroungers. Especially the Chinese. More and more affluent, more and more educated, the Chinese send their children to study abroad, and when they return, they bring not only academic culture with them, but also a new taste for beautiful things in Western style. China has become the second largest art market after the United States, again according to The Art Market 2022 by Art Basel-Ubs.

Art is one of the so-called “passion investments”, investments made by passion. So much so that market developments have led to the introduction of the term “pleasure dividend”. Art is particularly suitable for long-term investments. All art indexesthe global art index developed by Art Market Research, shows record increases over time.

It is not easy to buy or even sell. We must always trust experts, both to assess the content and value of the asset, and for all legal and tax aspects. We analyze the situation with two major experts in the sector.

If you want to sell or buy artwork, there are two options: the Art Gallerywhich is certainly a more elitist world, and it auction houses present in your city.

“Select Auction house to rely on, you can request more than one evaluation to decide who to leave your collection to “, he says Marco Canepa from Canepa Neri Gallerypresent in Genoa And Milana gallery that boasts brokerage for works by great authors, such as Boetti, Garutti, as well as several international artists.

Marco Canepa

Marco Canepa

“The auction house prepares a catalog that can only be online or even on paper. We rely on portals, ads in magazines and newspapers or sector magazines. The paper is still valued by those who buy: the painting published in the catalog provides an extra guarantee to the customer. The digital catalog must also be set up graphically. The publication contains as much information as possible: from condition reports to pictures of the back, with as many details as possible of the work, especially for customers who can not come in person to see the works to get a specific idea “, he explains. Marco Canepa.

Increases: auction compared to direct sale with gallery

“The offer at auction has the advantage, compared to the mandate for the gallery, with which an unchanged price is set, of a possible increase – he continues Marco Canepa – On the other hand, in the auction, fees must be paid by both seller and buyer, at intervals of 20-30%. For the sale of an entire collection, it is better to rely on an auction house. Some prefer direct and private sales as a matter of privacy. The negotiation can take place either through an auction house or through a gallery. Usually we try to make careful assessments to encourage participation. In some cases, the gallery owner can buy directly at a price that allows him to have a profit, also because he is charged with resale right, VAT and profit on the profit. Otherwise, you can use the power of attorney to sell and then issue a consultant invoice once the sale is complete. In summary, you can request more reviews and then choose, with the help of a trusted person, whether you want to propose your collection for a private negotiation, or at a public auction, where there are several opportunities to compete ”.

Most of the sellers are heirs to collector estates who over the years have collected important works and who have decided to alienate their possessions. Large portfolio managers have launched art advisory sections. “However, they always need an expert who knows the market well, both in buying and selling, and who is aware of market trends. The sale or purchase at auction is certainly more impersonal than the relationship that can be established with the gallery owner, as there are no direct contacts between seller and buyer – he explains Canepa – Some new investors or collectors who turn up without the vast experience must be guided step by step towards targeted and prudent choices that over time can provide a financial return. The basic advice is always to buy works that you like and that suit your taste ”.

The taste, the beauty

“It is important that those who intend to purchase a work of art inform themselves through special portals, magazines, art fairs, consult the authors’ sales results to try to understand what the right price is, author by author, and the current trend – advises Canepa – The reports from the individual authors make it clear that each award is independent and depends on different factors. As far as new artists are concerned, the discourse is much more complicated “.

It is necessary to have a clear picture of the trends by visiting trade fairs and portals dedicated to the sector. The important thing is not to approach with speculative intent and expect an easy and immediate gain, but to encourage young artists to grow and continue to perform this work (the so-called protection).

It is not easy to face certain choices and it is always advisable to rely on a trusted gallery that participates in the most suitable fairs for this type of proposal.

Free mobility

When you have a painting that is over 70 years old Ministry of Cultural Heritage has a pre-emptive right to the purchase and can exclude it Free mobility. It happens for really important works that the state wants to keep in Italy: for example, on paintings by Balla or de Chirico, or on works by old masters, such as Tintoretto or Guardi, which cannot be sold without the approval of the competent bodies.

“The market is unpredictable, today it is 10, tomorrow it is for no reason double – he continues Canepa – The investment in taste remains fundamental. He who manages to put together great collections is a person who understands, is passionate, buys books and catalogs, reads, attends trade shows and exhibitions and has a superior sensitivity, recognizes beauty. And you always sell the beautiful picture ‘.

As we have seen, therefore, there are various tools through which works of art can be sold.

The word to the lawyer

“For example, when a private individual, the owner of one or more works, applies to an auction house, he gives it a mandate to sell, after agreeing on the commission (which actually belongs to the auction house) and at the minimum price, which represents the minimum price, under which it is not possible to ‘beat’ the work “, says the lawyer. Salvatore Filippini La Rosa, expert in international law and former professor of art law and cultural heritage in higher education courses at the Scuola Superiore Sant’Anna in Pisa. “In this case, the owner of the work gives a specific mandate, with or without representation, to the auction house, which undertakes to sell the trusted work by offering it to the public after exhibiting it, also through your side, to potential buyers, ”he explains Filippini La Rosa.

Salvatore Filippini La Rosa

Salvatore Filippini La Rosa

“It is good to remember that the auction houses in their general terms and conditions, once the work has been awarded, disclaim any responsibility to the buyers regarding any incorrect attribution, state of preservation, origin and its authenticity. Finally, auction houses can also sell works through private negotiations “with individual purchasers, especially in the case of works of significant value. As already mentioned, the sale of works, whether by the artist who made them or by another owner, can also be carried out through a gallery or a dealer”, it sounds from Filippini La Rosa.

Different types of contracts

“In this case, different types of contracts can be used – he continues Filippini La Rosa – which in any case is based on a closer relationship of trust between the seller and the person responsible for the sale. Among these contracts we find the Commission contract. In this way, the seller / customer gives the gallery owner / commissioner, in principle exclusively, a mandate to sell one or more works on his behalf “.

The Commissioner

“The commissioner must act carefully in relation to his technical skills, is generally entitled to compensation, agreed with the client, as well as reimbursement of expenses incurred, and is liable, unless otherwise agreed with the principal, not for the fulfillment of obligations assumed to the buyer – seizes still in Salvatore Filippini La Rosa – In some cases, however, the gallery owner and the work’s owner prefer to enter into a sales contract, after which the gallery owner / buyer will decide whether to immediately sell the works he already owns, or wait for a more favorable time to enter the market. An additional tool to regulate the relationship between the owner / seller of the work and the gallery owner is the appraisal contract (better known as the ‘consignment contract’) “.

“The seller / trader hereby delivers one or more works to the gallery owner / custodian, who at the expiry of the time limit set by the parties has two alternatives: return of the works to the same seller or payment therein. he explains Filippini La Rosa – From the time of delivery of the work to the end of the agreed term, the contractor can sell the work to a third party, who in this case receives the ownership directly from the owner. Otherwise, and when the deadline has expired, the gallery owner must, if he does not intend to return the work to the owner, pay him the agreed amount and thereby become the new owner of the work. In all cases, given a certain complexity of the case, it is good to avoid the ‘contractual do-it-yourself’, as only a clear, comprehensive and non-contradictory contract reduces the risk of litigation, which has far greater uncertainties and costs than in a normal negotiation.

“It is also useful to emphasize that both the risks associated with the possible declaration by the competent authorities of the cultural interest of the plant, as well as the failure to issue the certificate of free circulation or the export license for this, on the one hand, are both the latest phenomenon. Nft – Non Fungible Token, regarding the purchase of certificates for copies of digital works of art registered on a blockchain, on the other hand, makes the preventive intervention of specialized professionals increasingly appropriate. Only in this way can we actually try to prevent disputes between sellers, buyers, galleries and auction houses, often driven by a lack of attention to the pitfalls of contracts in the art sector “, concludes Salvatore Filippini La Rosa.

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