How much does art cost? “Everyone is trying to make money”

Attorney JD Harriman is skeptical of some of the art market’s sales techniques.

“There is very little real information and data on pricing,” he told CNBC via video call. Prices for artworks are “rarely” displayed in galleries, he said.

“When [galleries] When they have a new artist, they’re not going to publish prices, they’re going to see what their clients are going to pay for it,” said Harriman, a partner at Foundation Law Group.

“If an artist’s work sells for $50,000 and they keep that secret, they can pass it on at a higher price, say $100,000, to the next buyer who is interested in a work by that artist,” said he told CNBC in a follow-up email interview.

Or if an artwork didn’t sell, the gallery might want to offer a discount — but again, this remains secret to avoid coloring the artist’s work, Harriman said.

Unlike company inventory, there is no obligation to provide value or ownership information for works of art. And similar to real estate, insiders sometimes equate the value of a work of art with the price the market will pay for it.

CNBC contacted a dozen art galleries in New York City and the same number in London to request price lists for their current exhibitions. (The galleries contacted do not publish their prices online.) Nine of the New York galleries responded with pricing information, while none of the London galleries provided their pricing information.

In an email to CNBC, Paul Hewitt, general director of the Society of London Art Dealers, said the organization encourages its members to display prices. “Promoting public trust in the responsible use of visual art is a founding aim of the Society of London Art Dealers,” he said.

Galleries that don’t display prices may be waiting for a market maker or someone with cachet to show interest in a piece to keep its value high, said Harriman, who has represented photographers and art consulting firms. “Collectors also overpay for parts of an artist’s collection that they have not yet acquired in order to keep the value of their own collection high,” he said.

Collectors themselves are unlikely to publicly disclose the value of the art they own, just as they may not discuss their stock market holdings or net worth.

And like any market, participants use tactics to maximize sales, Harriman said. “Everyone is trying to make money. Is that illegal? Is it simply unethical? Is it just shady? I don’t know,” he said.

“When you buy a used car, the same things happen [with sellers urging:] “Last chance, you better buy it today.” “Only once.” You get that with every sale,” he said.

One reason galleries don’t publish prices is because they want to protect the artists they represent, said London gallerist Lucca Hue-Williams. “From an artistic perspective, sending around prices can often lead to speculation and some excitement,” she told CNBC by phone.

“We don’t want flippers to come in and compare prices and see what they might be able to sell their work for,” Hue-Williams said. Her gallery, Albion Jeune, sells work by emerging artists who are probably well known in their home countries, but less so in the UK

Hue-Williams wants to further her career. “I really spend a lot of time getting to know clients to make sure that they will be involved in the artist’s career for a long time, that they really value the work and that they, for example, might come back to us and loan the work for future museum exhibitions ” she said.

For young artists, deciding how to price their work is not easy. Artist and curator Gosia Łapsa-Malawska said new artists often ask her how much they should charge and may choose not to display prices during an exhibition because they prefer to negotiate a price. “Lowering the price is the worst thing you can do as an artist. I’ve always advised aspiring artists: When you’re starting out.” [at a] “At a certain level, you can only go up,” she told CNBC by phone.

On the other hand, not displaying prices can deter potential buyers because they may be afraid to ask how much an artwork costs, Łapsa-Malawska said. She is curator of the London gallery The Muse at 269, which publishes prices online.

Psychological and emotional factors come into play when buying and selling art, she said, such as whether a gallery hangs a piece in a physical gallery and displays the price underneath. “Sometimes the price is like a barrier,” said Łapsa-Malawska. “Okay, that’s not for me. “I’m not allowed to like this work,” is how buyers might feel when they see the price, she added.

For Tony Tjan, art collector and CEO of venture capital firm Cue Ball Capital, the value of a work of art is defined in a similar way to other collectibles. “The level of popularity, the level of scarcity and the level of credibility [or] … if something has organically captured the zeitgeist” are factors, he told CNBC by phone. Experts can offer advice on the value of a piece, he added.

However, according to Charlotte Black, founder of Artclear, a company that authenticates works of art and stores information about them on the blockchain, it is the cost of expertise that can deter people from buying art.

“Finding verifiable data on artworks is difficult and expensive – it requires advice and assurances from experts you can trust – making the market quite exclusive,” she told CNBC via email.

Black hopes Artclear will give more people access to the art market, just as stock trading platforms have opened financial markets to retail investors. “It will increase trust in digital marketplaces and reduce the cost of processing transactions,” she said.

Asked whether the art market could be described as mysterious, Black said: “It’s a mystery to many – unless you’re an expert or know one or pay someone to advise you… it’s hard to be sure.” what you buy, and.” In this case, the best advice is to only buy what you love.”

Tjan, who is also co-founder of nail salon chain MiniLuxe, agreed with this sentiment. “Values, at least for me, should be determined simply by what they mean to you,” he said. Is the pricing mysterious? “Yes that’s it. “I mean, it’s art, right?” he said.

“Despite more online information supporting discovery and valuation, there really is no highly liquid global market that contributes to perceptions and realities of ‘black box’ pricing,” Tjan told CNBC in a follow-up email.

Tjan said he prefers to buy works directly from artists. “While I don’t mind buying at auction, it always makes more sense to build relationships with artists and buy or commission work directly from them,” he said.

Will Ramsay, a collector and industry expert, said prices are not always transparent because the higher end of the art world wants to convey a sense of exclusivity. “I have been to some luxury stores and events without the prices of luxury items being visible, be it clothing, watches, wines, jewelry or cars. The art market is no different,” he told CNBC via email.

Ramsay is the founder of the Affordable Art Fair, a series of events that began 25 years ago in London’s Battersea and now takes place in more than a dozen cities worldwide – with prizes listed alongside the artworks. Prizes at the Battersea event, which runs until Sunday, range from £50 ($65) to £7,500 ($9,787).

“Our goal is to make art purchasing democratized and inclusive, educating people and giving them the confidence to start or expand their collections,” he said.