Daniel Grant uncovers an interesting bit of auction world hierarchy in his Artnet essay on what regional auction houses have done to protect themselves against buyers who get remorseful about winning a bidding war (this has become a real problem with some Chinese buyers but is by no means exclusive to them.) Nonetheless, savvy players like Jack Scofield of Eldredge’s on Cape Cod have come up with a method for vetting their bidders:
“We are identifying our bidders more carefully, asking them ‘Where else have you made purchases?’ and checking with those other auction houses,” such as Leslie Hindman, Skinner (in Boston) and Doyle (in New York City), among others. “We ask, Does this person pay his bills? How promptly? Did he argue? Did he say, ‘I didn’t think the buyer’s premium applied to me?’” When this network of auction houses reveals problems, Eldred’s does not allow the individual to register, or it may require a deposit of 10 percent (in the form of a bank or certified check or a wire transfer from a bank) for whatever that prospective buyers hopes to bid on. If they are successful bidders, the deposit will be deducted from what they owe; if they make no purchases, the money will be returned to them.
Scofield noted that regional auction houses are good at providing information on bidders and buyers from overseas, only noting that Christie’s and Sotheby’s are “not very cooperative.”
So here’s a dumb question: why won’t Sotheby’s and Christie’s cooperate with vetting bidders? Don’t they have more to gain from gathering intelligence on their potential buyers than the regional houses because the sales are generally much higher at Sotheby’s and Christie’s? Wouldn’t participating be an early warning system?