Privacy Please, The Ins and Outs of Buying and Selling Art Privately

By Sotheby's

A n avid collector throughout his decades-long career in finance, David Schrader joined Sotheby's as Head of Private Sales in order to combine his passion for art with his ability to guide clients through sensitive business matters. We sat down with David to learn more about this vibrant part of Sotheby's business and why the world's most savvy collectors often choose private sales for their most immediate needs.

Sotheby's Head of Private Sales David Schrader.

What was your background prior to joining Sotheby’s?
Prior to joining Sotheby’s, I spent 20 years in finance, but I had been a collector that entire time. As I spent more time looking at art, traveling to see art and collecting art, I came to the realization that's what I wanted to do. Sotheby's provided a really unique platform where I could be surrounded by amazing specialists and objects every day.

What kind of art do you collect personally?
Mostly post-war contemporary, abstract and minimalist art.

Why do clients transact privately instead of at auction?
There are many reasons why people might go in either direction. Timing is often a big factor – they might have an immediate need for liquidity, want to buy something new, or it’s time to send their grand kids to college. Of course some might not want anyone to know they're selling a piece, for example. Each private sale is a negotiated bespoke deal, and there is more price control. Whereas at auction you start low to come to a higher number, generally in private sales you start high and come to a middle ground.

But at the end of the day, one of the main reasons collectors rely on private sales is that collecting doesn’t only happen four times a year at auction – it really is a year-round activity. Our clients are interested in purchasing the best objects at the best prices whenever they are available. Private sales is one of the ways that we are able to assist our clients whether they are buying or selling at any time of the year.

What are some of the categories that Sotheby's sells in?
We broker private sales in nearly all of Sotheby’s categories – fine art across multiple disciplines, including contemporary art, Old Master paintings, Impressionst and Modern art, Latin and American art, as well as prints, books and manuscripts, watches, wine, jewelry, 20th century design and diamonds. Last year in private sales we sold works by 382 different artists, from the superb 17th-century still-life painter Clara Peeters to sought-after modern and contemporary artists like Yayoi Kusama and Henri Matisse. The range is really quite amazing.

The J. Paul Getty Museum purchased Parmigianino's Virgin With Child, St. John the Baptist, and Mary Magdalene in 2017.

What are some of Sotheby's most memorable private sales?
The hard part about talking about private sales is that most of them are truly private. There are some very memorable ones, but we can't disclose them unfortunately. A lot of people come to us for discretion, which we take very seriously. That said, we have brokered a number of sales for institutions, including the sale of a rare 16th-century Parmigianino painting, Virgin With Child, St. John the Baptist, and Mary Magdalene, as well as Bernini’s masterful bust of Pope Paul V, for the J. Paul Getty Museum in Los Angeles and a magnificent 14th-century Illuminated Hebrew Bible for the Metropolitan Museum of Art.


What are some ways that Sotheby's protects client confidentiality?
Each situation is unique. Some clients tell us that they only want two people involved in the transaction and we adhere to those rules. Some people say that they don't want the piece coming to our premises. They want to view it in a special warehouse or facility. Names are always confidential.

How often does in-house inventory change?
Quiet frequently, we have pieces coming in and going out on a daily basis. There are many times during the year when we have upwards of 100 objects moving in and out.

How can a client make a specific request?
Many of our deals are request based, so it’s us going into the market and finding specific objects for people. For example, a collector might come to us and say, “We're looking for this particular Picasso or that Christopher Wool. We like this series, this year, this size, this color, and this is what we want to spend.” Not only have we seen or sold hundreds of thousands of objects over the last three centuries, but we have 500 relationship managers around the world who are each talking to clients. We tap into both our internal and external networks to find what the client wants.

In what regions can Sotheby’s facilitate private sales?
We work in every market. We sell things from Europe to Asia, from Asia to the US, from New York to LA, LA to Brazil. We're connecting the largest community of collectors in all the major markets and helping them buy and sell. They can do this from wherever they are. We conduct many sales where the clients and objects never come into the building.

Can clients still inspect an artwork from afar?
Yes, we can ship a work to a warehouse or to an office in their location. Or, they could see it virtually with us. There are a variety of different solutions to view artworks remotely, and we work with clients to meet their needs.

How can clients be sure that they're getting a fair price if there's no transparency or competition of an auction setting?
The majority of works that sell in the world don't sell at auction. They sell through some form of a private transaction, whether it's through us or through dealers or through galleries. Each price is negotiated. The real difference between Sotheby’s and our competition is that when you choose Sotheby’s you are getting the trust, transparency, depth of expertise and discretion that has underpinned our business for nearly 300 years. We are uniquely positioned to source artworks and find buyers across numerous diverse categories. There are clear commission caps in place which means that we can never make more than a certain amount on a transaction and we back up the works we sell with a multi-year authenticity guarantee, just like we do in auction sales. Pricing can be somewhat arbitrary and can fluctuate just like any other asset, but we have tremendous data-sets, both public and private, that we use to price material.

Yayoi Kusama consistently ranks as one of Sotheby's top-selling artists through private sales.

What are some of the market trends you've observed in the private sales space?
A lot of the trends tend to mirror what we're seeing at auction, such as an increased focus on African American and female artists. Many trends are triggered by an event, like when a Richter exhibition opens at the Met, or Warhol at Tate Modern. Other times it might be a high auction price that inspired someone to buy or sell. Collectors are really watching and paying attention to the market.

“ Last year in private sales we sold works by 382 different artists, from the superb 17th-century still-life painter Clara Peeters to sought-after modern and contemporary artists like Yayoi Kusama and Henri Matisse.”

What if I'm a new collector – how can you help me?
Our specialists can walk a client through the entire process. First they’ll figure out what that person's taste is, which might involve looking at auction catalogues, taking them to museum exhibitions, or going through art books. Then they’ll determine the client’s ideal price point and find the best examples of the artists that they're gravitating towards. What’s really exciting about Sotheby’s is that we can help build someone’s entire collection because of our tremendous breadth of categories – we can assist nearly all collecting needs, whether you are looking for Patek Philippe watches or Domaine de la Romanée-Conti Burgundy or treasured examples of 20th century design

In today's marketplace, there are many companies and galleries where people can buy and sell privately. Why choose Sotheby's?
Sotheby’s has the greatest depth of expertise, especially across such a broad number of objects, categories and artists. Our specialists have been in the industry for decades, in some cases, and have unparalleled expertise in their specific markets. Over the years we've bought and sold a tremendous number of objects for people, so we know where more things are, and what they’re worth. In addition to our specialists’ great depth of expertise, they also serve as trusted advisors to clients.

In addition to Andy Warhol, Jean-Michel Basquiat and Alexander Calder, KAWS is one of Sotheby's most-requested artists.

Are collectors buying and selling during these difficult times and what are they looking for right now?
They are. Our phones have been extremely busy, and even if collectors are at home, we have online tools to support them.

In the last few weeks with the pandemic going on, we are seeing a shift towards blue-chip and mainstream artists. Like any asset, it's a flight to quality or perceived quality. We saw this in 2008 and during other moments of turmoil or times of uncertainty. Whether it's Picasso or Monet or Rodin or Rothko – there is a perception of lower volatility with well-established artists who are collected by museums, institutions and great collectors – and that gives people a sense of comfort and security.

Why is buying and selling privately appealing during this current economic climate?
It gives you more price control, and it gives you more control on timing. Some people might not want to be perceived as needing to sell, but they would be willing to consider a private offer. Plus, with auctions and art fairs being rescheduled or postponed, there aren't a lot of other opportunities to transact right now.

If I’m interested in selling an artwork, what is the best way to start the process?
It’s as simple as giving us a call. Our global team is always available to discuss your collection and your particular needs. We constantly receive requests from buyers to source specific pieces, and someone might be interested in exactly what you are looking to sell. Even in uncertain moments – like the current pandemic – there are still many collectors interested in buying. So that also means it's a worthwhile time to sell. Or at the very least, a great moment to start a conversation with our team.

If you are interested in buying or selling a work through Sotheby’s Private Sales, contact our specialists today.

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