Pawning Art – The Primary vs. Secondary Market
Beverly Loan Company, the upscale pawnshop residing in Beverly Hills, has been making contemporary and modern art loans to the Hollywood’s elite for more than 75 years. Pablo Picasso, Jean Miro, Roy Lichtenstein, Andy Warhol, Jean-Michael Basquiat, and Damien Hirst are just a few of the household name artists, whose works are pawned on a regular basis.
Beverly Loan receives many questions about how to determine the value of the fine art that finds its way into the office. While the loan officers at Beverly Loan are experts in the art trade, there is no formula to evaluate the price of a piece; we take into account medium (sculpture, painting, print, photography, etc.), condition, aesthetics, etc. “There is a wide range of artists in the art world, and the market for each artist is very different,” explains Jordan Tabach-Bank, owner and CEO of Beverly Loan Company. “When we are valuing a piece of art, we have to look at all aspects of the artist, including their primary and secondary markets.”
There are two basic markets in the art world; the primary market and secondary market. The Primary Market is where new art enters the market for the first time, and where the basic price on a piece is established. The majority of the time, this market is dictated by the galleries that represent these artists. Places like Gogosian Gallery, Mary Boone Gallery, and Blum & Poe Gallery are notable institutions that have represented some of the most important artists of our time. Artists can also try to enter the primary market through alternate sources; such as representing themselves and opening their own gallery, or entering into art festivals like Art Basel in Miami. This primary market would be considered the retail price.
After a piece of art, or series of pieces, have sold from a gallery and it starts to trade hands, it has a secondary market price. The Secondary Market is where supply and demand determine the value of an art piece rather than the galleries and collectors. As artists become more prolific and popular on the secondary market their pieces can far exceed their primary prices; however an artist can lose value after the initial sale at a gallery. Auction houses, such as Sotheby’s, Christies, Phillips, or Bonhams; are good examples of resellers who strongly influence the secondary market.
There are many factors that contribute to determining a price for an art pawn, and finding value specifically in the secondary markets is one of the most important. This information will not only make you a more knowledgeable consumer, but will streamline the process for a loan.
When inquiring about a fine art loan with Beverly Loan Company, it is best to have pictures of the piece, any provenance or paperwork associated with the artwork, and the size and edition number if applicable.
This entry was posted on Thursday, January 30th, 2014 at 4:14 pm
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