Do you ever wonder how much that painting hanging in your living room is worth? Or whether that vase your grandmother gave you is actually from the Ming dynasty? Knowing the background and value of your collectibles is not only entertaining, but may help you with refining your financial and estate planning.
To find out more about the Canadian collectibles market I recently spoke with Rebecca Rykiss, National Director, Brand and Communications and Consignment Specialist with Heffel Fine Art Auction House, and Stephen Ranger, Vice President of Waddington’s Auctioneers & Appraisers, to learn about the art of valuing, and cashing in on your prized possessions.
From rare Scotch to ancient Egyptian artifacts, Waddington’s is no stranger to assessing unique collectibles. For example, Stephen Ranger told me they were recently asked to valuate a buoy from the wreck of the Edmund Fitzgerald that had washed up on the shore of Lake Superior.
Heffel has also come across some rare treasures. Rebecca Rykiss shared one of the most unusual and exciting backstories in Heffel auction history – Tom Thomson’s Sketch for Lake in Algonquin Park. “The small oil on board was consigned by a woman who, for all her life, did not believe her father’s Tom Thomson was the real thing,” said Rykiss. “She took the painting out of her basement one day and mailed it as a gag 70th-birthday gift to her friend, who then brought it to the Heffel office for appraisal. They were both pleasantly surprised when its authenticity was confirmed. The final sale price was $481,250 – more than three times its pre-sale estimate! The two friends put their earnings toward a trip to Norway and a cruise around the Mediterranean. This uplifting story is an excellent reminder that there are so many outstanding works of art to be discovered and enjoyed, and it really is possible to have a masterpiece hiding in your home.”
What’s a reasonable appraisal fee?
So, you’ve got an antique or two that you’re curious about; what’s the first step? You’ll want to check with a couple of appraisers to find out about their fees. For instance, Waddington’s works on an hourly rate and says the industry standard is around $300 per hour. Ranger cautions: “Never work with any appraiser or organization that conducts appraisals and charges fees based on a percentage of value. It’s an inherent conflict of interest.”
Heffel offers free auction appraisals for any works of art. They will review and discuss a work or collection, and provide auction estimates and recommendations. However, if you’re looking for a formal written appraisal for insurance, estate planning or other purposes, their fees will depend on the size and scope of your collection.
Both Waddington’s and Heffel have locations across Canada, and many other cities across the country have local auction houses that may be able to assist you.
How a collectible is valued
For Waddington’s, most collectibles will fit into some sort of general or specific category. They’ll generally take a price-comparable approach, depending on the market.
Heffel takes a similar approach. “A work of art, like other assets, can have many variables that affect the current valuation,” says Rykiss. “I advise contacting a fine art specialist, such as a consignment specialist, with a depth of knowledge and experience in evaluating artwork.” At Heffel, consignment specialists closely follow the market and recommend estimates based on prices realized for comparable works at recent Canadian and international public auctions, as well as additional considerations, such as condition, rarity, quality and provenance. “Some artworks have a “wow” factor that affects our valuation as well,” adds Rykiss.
To restore or not to restore
If a collectible is in need of repair, restoration may add or detract from its value. Some collectibles lose their value when they’re restored, and should therefore be left alone. Ranger advises that objects over time acquire what is often referred to as “patina,” a quality that should not be confused with damage. “Restoration should really only be undertaken on things that are broken or damaged. Artwork that has been touched up by a non-professional, or furniture that has been overly polished, are two areas to be very careful of.”
Rykiss adds: “Art, like many other items, can experience changes during the aging process. Heffel’s specialists may recommend professional conservation prior to auction in order to present a work of art in the best possible condition. This may entail a simple cleaning or a much larger repair. When required, and most importantly when done properly, conservation can often increase the value of a work.”
If your family believes the painting in your living room is by a famous artist, a professional appraiser may be able to confirm this for you. Ranger sees work by an important artist as more than just a collectible: “It’s an important part of our cultural heritage. Provenance is about determining the history of ownership of a work of art, and it’s one of the most important determinants of value. Some works are very easy to trace, others require a great deal of detective work. For us, that’s the fun work!”
Rykiss details what Heffel looks for. “First, is determining who the artist is. Also, when it was painted – is the work dated, and if not, are there clues or research material that can help lead to the date or period in the artist’s career? To determine provenance, we would need your assistance as the current owner, and would do our best to work backwards and trace when and where it changed hands. Labels and inscriptions on the back of the work, past sales results, literature inclusions, among other things, can all help determine provenance. For the Thomson I mentioned earlier, on the back of the painting there was a small, almost illegible inscription that traced part of the provenance back to Thomson. The tricky part was that this was covered under a label which we had carefully removed. The back of the painting can be almost as important as the front.”
What’s in demand now
To find out which collectibles are “hot” at the moment I asked our two experts about the trends they are seeing in the Canadian market. Waddington’s Ranger noted fine and rare wine, rare scotch and spirits, luxury watches, vintage designer accessories, prints and photography (especially for millennial collectors), mid-century modern furniture, art and design as categories that top their list. They’ve also seen strong international interest in categories like Inuit art.
At Heffel, Rykiss has seen a greater interest in post-war & contemporary art in recent years. “The up-and-coming wave of collectors are looking for art that reflects their current environment, not just a work that looks great on the wall, although many still do find that of importance. However, if I can provide any advice, it is important to collect what you truly love, and not what is exactly on trend or in current demand. Collect what you’ll want on your wall or in your home for decades.”
How to get your collectible included in an auction
Once you’ve managed to emotionally part with your treasured piece, getting it into an auction is easier than you think. Ranger notes that Waddington’s provides free auction value appraisals all day, every day. “Most clients start by sending us digital images of the items they’re interested in selling. Once the appraisal process is complete and the client decides to consign, we charge modest commission fees and will schedule the artwork or object for one of the many auctions we hold each month.”
As a first step, collectors will connect with one of Heffel’s consignment specialists to discuss their artwork or collection in detail, as well as their goals. “Our specialists work closely with the collector when researching the work, and will then provide auction estimates and sale recommendations,” offers Rykiss. “Any costs associated with the sale of an artwork are discussed in detail prior to auction. The main costs associated with offering the work in an auction include the seller’s commission, as well as a fee for cataloguing and sale inclusion. These fees vary depending on which sale the work is placed in, and what the work ultimately sells for.”
Changes in the Canadian auction industry
Though live auctions are still going strong, both auction houses offer online auctions and have seen an increase in this activity. These are easier to participate in and allow for targeted and specialized auctions.
“Like many industries, the art auction business has been radically disrupted by the advance of technology and the internet,” explains Ranger. “At Waddington’s, 90% of our auctions are online. While this is a reality and it affords us incredible reach, some of us still love to see a room full of clients happily bidding away. We still do live auctions for the higher-end Canadian art, Inuit art and fine jewellery.”
Collectors travel from all over the world to attend and participate in Heffel’s live auctions. “Since convenience and time management are priorities for many of our collectors,” says Rykiss, “we also have dedicated and experienced phone bidders communicating with remote buyers throughout the auction. Virtual tours of our auction previews, extremely high-resolution images and a flawless live auction video stream also help contribute to a seamless remote bidding experience.” Heffel’s next live auction is on November 20, 2019.
Whether you’re looking to divest yourself of a piece you own, or add to your current collection, the auction world can be fascinating.
And collectibles, just like any other asset you own, can play an important role in your personal financial and estate plans. To ensure that the value of your collectibles has been taken into account in your financial plan, contact your T.E. Wealth financial consultant.
Jason Kinnear, CPA, CA, CBV
Manager, Family Office Services
Interviews have been edited for clarity and conciseness.
These articles are for general informational purposes only. Please obtain professional advice before taking any action based on this information. No endorsement or approval of any third parties or their advice, information, products or services should be implied by any references to third parties contained in any article. Trademarks cited in these articles are the respective properties of their owners.