‘Only Bidder’
“If these pictures return to the market very soon, people realize that the value is not what the auction prices reflect,” Danziger said. “It’s not a competitive situation. Someone made a bet and ended up being the only bidder.”
For seasoned collectors, guarantees used to be a sure way to get a good deal. They either got the work they wanted at a slightly reduced price, or they received a fee if the painting sold to someone else.
“Guarantees are brilliant if you want to own the work,” said Gabriela Palmieri, who advises collectors, including the Berkowitz Contemporary Foundation in Miami. “Otherwise it’s not worth doing at all. Unless you really know the market of the artist, you are playing with fire.”
Chatila, who also invests in diamonds and real estate, said he’s been guaranteeing art for 10 years. “Last year, the market was slightly softer,” he said. “I ended up buying most of them.”
He said he’s selling “The Architect’s Home in the Ravine” to buy “another very important painting,” and still thinks he got a good deal on it. “I believe it’s worth much more,” he said.
--With assistance from James Tarmy.
This article was provided by Bloomberg News.