When It Comes To Collecting Art And Antiques
Caveat Emptor — Let The Buyer Beware
by
Theresa Franks
There are more art and antique collectors today than at any other time in history. With the advent of the Information Age, the Internet, Ebay and television programs like the PBS Series, Antiques Roadshow, the demand by collectors for art, antiques, and other valuables is rapidly escalating. Though many of us may not realize it, we are living in a unique time in history.
When it comes to art and collectibles, the Information Age has effectively leveled the playing field and democratized the fine art and collectible markets. Today any artist, any gallery, any dealer, any antique collector, or any private individual on the globe, despite economic or social status, can successfully open for business on the Internet, thereby claiming a share of the veritable gold rush of the Information Age, and in what will one day historically be one of the biggest opportunities of the 21st century.
Yet along with the grand potential for opportunity also comes the potential for greater uncalculated risks. In order to avoid some of these risks, set forth below are a few tips to help guide collectors when considering purchases online as well off, and can be applied to any area of collecting.
1. Caveat Emptor. Let the buyer beware.
This is the single most important tip anyone contemplating a fine art or collectible purchase could exercise. Indeed, these words should be your mantra--caveat emptor--let the buyer beware! This is especially true when you are dealing with a seller that is unfamiliar to you or that you don’t have an established business relationship with. Whether buying from a gallery down the street or a private individual online, whatever the case, always remember those two Latin words: caveat emptor, which translates to an important principle in everyday commerce, that the buyer alone is responsible for assessing the quality of a purchase before buying.
It is important to ask the seller questions. Don’t worry about sounding naïve or unknowledgeable. We all have to start somewhere. Remember, even the experts are challenged from time to time, and more often than you think. When it comes to investing your hard earned money, throw regard for status or standing aside, don’t let anyone charm you, trick you, or intimidate you into a purchase. Believe it or not, this is done every day, hundreds if not thousands of times over.
The first question you might ask the seller is if the item is registered with Fine Art Registry. If not, ask the seller if he would be willing to do so. Since Fine Art Registry tracks registered items, the original seller can always be researched and any questions that may be presented later about the piece could potentially come back to the original owner, thereby establishing accountability. Once the piece is registered and sold to you then the seller may electronically transfer the ownership of the piece to your name. Once the transfer is completed, the Fine Art Registry™ database will then reflect you as the current owner and the seller as the former owner. If you later sell the piece, the process will be repeated and so on, and so on, thereby establishing provenance or a history of the piece. An honest seller should have absolutely no problem permanently registering the art or collectible you are considering purchasing. The cost of registration is affordable—a one time fee of only $2.25 per piece—with no renewal or additional tags to purchase. If the seller resists, offer to pay the tag fee for him. If the seller still resists, you should walk away and purchase from someone who will agree to register the piece. Ownership transfers are always free for the seller and the buyer. See Fine Art Registry’s FAQs for more information.
Ask questions regarding the history of the piece, whether it is being sold with a certificate of authenticity or other paperwork or reference material regarding its provenance or history. You should ask why the piece is being sold and how the seller arrived at the price. Has the item been damaged? Has the item been appraised, and if so, by whom? Does the seller offer any guarantees, and so on. Asking questions like these puts the seller on notice that you are an informed consumer, and a savvy buyer, which leads me to the next important tip!
2. Buy what you have a passion for and buy what you know.
Whether you’re paying $10 or $10,000, you should always buy what you like. But if there is one thing to remember, it is this. Buy what you know! I don’t know how many times I’ve heard of people getting burned when buying an item they know nothing about hoping to turn it for a profit in the future. While this has happened to many of us at one point or another, fortunately for many of you, some of us have already paid the tuition to the school of hard knocks, so why should you? Learn by the mistakes others have made.
For example, it would probably not be wise for a rare book collector to invest in civil war era firearms unless the book collector knows a bit about period firearms. This may seem be oversimplifying, but it is important to stress here that you should fully research what you are buying. If you think you might like to start collecting civil war era firearms, you should start by reading articles on period firearms. You might also attend a few antique shows with exhibitors that carry this type of inventory. Buying what you know is critical in mastering knowledge of your area of collecting as well as mastering effective overall management of your collection, not to mention your pocketbook.
3. Beware of purchasing stolen goods.
While your chances of purchasing a stolen piece of art or other collectible is probably slim, it happens, and is becoming increasingly more common. Again, caveat emptor applies. Fine Art Registry is here to help reduce the rise in the illicit art and collectible markets and will make every effort to do so. But it will always be up to the collector to perform due diligence when purchasing fine art and collectibles on the secondary market. This also holds true for objects purchased that are classified as cultural items and antiquities. While there are items stolen from living artists and collectors too, many of today’s stolen pieces are at least 75 or 100 or more years old, and are usually produced by artists who have long since departed this world.
Until Fine Art Registry.com there was no centralized stolen object database for the general public to research their prospective purchases. FBI and police records are kept confidential for the most part, and are not usually released or accessed by the public. Other private stolen art databases might be accessible, but are not interactive and only contain items with a value of over $1,000. However, it is Fine Art Registry’s mission with the ever-increasing use of the Internet and the meteoric rise in online purchases, to do something about the lack of standards in the art and collectible markets in order to deter theft, forgeries and fakes that flood the global art and collectible markets today. Theft and forgeries of art and other valuables is a serious international problem, yielding multi-billions of dollars, second only to drug trafficking and the sale of illegal arms.
It is one of Fine Art Registry’s goals to create and maintain an active Stolen art and collectible database that is accessible to the masses, including law enforcement and insurers, but this will take time to build, and it can only be done through heightened public awareness. The best rule of thumb is to suspect anything on the secondary market. If you do happen to unknowingly purchase a stolen work or other valuable, and it is discovered in your possession at some point in the future, rest assured that it is certain to seized from you and returned to its rightful owner, leaving you holding the bag—that’s right—without any recourse whatsoever. There is no statute of limitations on stolen works of art, collectibles or antiquities.
Fine Art Registry.com provides helpful links to organizations where one can currently research stolen goods. However, without the current availability of a centralized database of stolen items it is difficult if not impossible to determine if what you are buying is or is not stolen, faked, forged, or missing, especially if you are not familiar with the person from whom you are buying. Therefore, it is absolutely critical that you perform as much research as possible before your purchase, especially if you are planning to spend a considerable sum for the piece.
4. Buy the best quality you can afford, but be certain that you know what you are buying.
If you should ever have to sell your collection, you will always fare better financially or receive a better return on your investment if you have purchased pieces that hold their value or, if you’re lucky, have increased in value. While none of us knows what a particular contemporary artist’s works will sell for 20, 30 or more years from now, you can never go wrong when you buy quality pieces that you are proud to own. In doing so, you will more than likely be fortunate enough to have your collection increase in value. Buying absolutely the best you can afford.
5. Remember, condition….condition…condition!
Whether it’s a painting by Renoir or an autographed Babe Ruth baseball card, remember to check the condition of the piece thoroughly. This is easier said then done when buying artworks on the secondary market over the Internet, especially at online auction. Many sellers don’t accept returns, and others who may say they offer a return policy, often don’t honor it in the end. If buying at online auction, ask questions! Remember your mantra, caveat emptor. Establish relationships with online sellers that you can trust, start small, and don’t ever buy on emotion or impulse. In addition to quality, condition is almost as important. If you later decide to sell your collection, the first thing a prospective buyer or auction house will want to know is the collection’s condition.
6. Keep good records by registering your collection with Fine Art Registry™.
This is perhaps one of the most disregarded rules of collecting—good old fashioned record keeping. Yet it is perhaps the single most important factor in maintaining and valuing a collection whether for insurance purposes, inventory, or sale. Statistics show that less than 10% of U.S. collectors maintain an inventory of their collections, no matter the dollar value. Roughly half of the multi-millions of fine art and valuables lost in the 9/11 attacks were not recorded or even inventoried. Add this to the problem of misplacing or losing stored notebooks, sheets of paper, certificates of authenticity, and computer data and, well, you get the picture.
We live in exciting times, but we also live in uncertain times. With the Information Age has come the age of international terrorists. Our world is much smaller than it was a dozen years ago. Think about it. With the click of the mouse, we can communicate with literally anyone on the globe with Internet access.
Fine Art Registry has taken all the guesswork out of managing and recording your collection. At Fine Art Registry.com all you need to do is purchase tags, place them on each individual piece in your collection, enter the relevant data for each piece online, post a couple of digital photos and the process is complete—the piece is instantly and permanently recorded for posterity. Your collection will remain on FAR permanently to be tracked for insurance purposes, for estate inventory, in case of theft, to manage sales, to share with galleries, auction houses, and with friends or relatives. Whatever the case, Fine Art Registry has made the permanent registration of your collection easy and affordable.
7. Network…Network…Network.
Networking with others that have similar interests to yours is always a plus when considering a purchase. There are collecting groups you can join everywhere. Fine Art Registry.com provides its Art Forum where questions can be asked and/or issues discussed and where you can get input from others. Starting a support group in your hometown where you might meet once a month would also be a good suggestion. There is strength in numbers and that is how Fine Art Registry.com was developed, by a group of collectors and artists that wanted to change the current system.
— by Theresa Franks
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February 9, 2006
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The views and opinions of individual authors/contributors expressed on the FAR® web site do not necessarily state or reflect those views and/or opinions of Fine Art Registry™ or its agents or subsidiaries.
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