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Cambridge Expertise’s appraisals are recognised by government revenue departments, insurance companies and other corporate bodies such as museums and art galleries. These appraisals are underpinned by a network of specialists in contemporary art who have unrivalled in-depth knowledge and experience of how the international art market works. Our team constantly updates its appraisals in line with the endless changes in the art market. Our team regularly updates their appraisals according to the permanent development of the market.

The valuation of works of art

Sometimes works of art will fetch enormously high prices and such works cannot be appraised like any other product because they are unique. The value of a work of art can vary according to the following:

the fame and reputation of the artist
when the work of art was produced
market conditions
its location and the circumstances of its sale
its history
its intrinsic quality

How much a person wants to acquire a particular work of art is unique to that person and this can easily affect the selling price. This is just one of the many variables that make getting an exact valuation rather difficult. Among others are format, subject matter, background and style but these are by no means all of them..

Works of art are subject to the unforeseeable forces of supply and demand and their value can go up or down. Because each work of art is unique the valuer has to go into a great amount of detailed research before making a fair judgment of value. As much accurate information as possible has to be collected. It should be be borne in mind that valuing an artist’s work has to be carried out within a framework of economic realities: galleries, brokers, agents, auctions, artists’ studios or workshops and, increasingly influential, websites. They are all part of the broader picture which must be taken into account. We are talking here about official, invoiced sales that can be checked..

First of all, it is most important to have widespread sources of information. Many investors only form an idea of the value of works by looking at auction house sales. This is a big mistake on their part.

Auction house sales in themselves generally offer only a partial picture, or are of little or no interest in themselves, or are not representative of an artist’s work. Works of art sold this way are unreliable as they are subject to the ebb and flow of economic circumstances, or a dearth of potential buyers, leading either to negative and uncontrolled transactions or the reverse, unpredictable speculative transactions which are beyond the auctioneer’s power to control. The question therefore is how can the art market be organised so as to produce more accurate, more formal and more enforceable valuations?

From the outset it is important not to confuse “auction” with “valuation”. The results of auctions are managed by auction houses such as Sotheby’s, Christie’s, and Drouot Richelieu. Sales are made in the public arena. The amount a work fetches is common knowledge and publications such as Art-Price and Akoun list the date, place and sale price. Depending on the circumstances and despite the best efforts of the auctioneer, the outcome of a sale can vary a great deal. Some artists can get away with over-valuing their work through clever self-publicity. This obviously does not apply to great works of art or to masterpieces.

Auctions are but one part of the whole process of valuation. A valuation has to be accurate and fair both to the artist and to the buyer. Both sides have to be able to rely on it unhesitatingly.

In order to analyze a work of art, experts take into account technical, artistic, environmental and sociological factors which include the following:

sales through galleries
direct sales from the artist’s studio or workshop
sales via the Internet
sales by mutual agreement
sales open to the public, such as auctions
sales that come via reviews, guides, and other specialist publications
evaluation of how the artist’s work is developing and how it is positioned in the market (galleries, shows, websites…)
the artist’s profile, fame, trends in their work, and general appeal
how well represented in museums and public art galleries
whether bought by public bodies or private collectors
output: quantity, quality, rarity, and state of conservation
where sales take place and conditions of sale
the artist’s background and career path

All the above are key factors used by contemporary art experts in making formal valuations.
The valuation department of Cambridge Expertise uses algorithms to make models using VTM software programs to gather and analyze statistical data that is constantly being updated. The assumptions on which these algorithms themselves are based undergo regular verification.

What matters most to artists is to become known in the art market and for their business to be managed professionally, while recognizing that a formal valuation may go up or down over time. All the parameters listed above can have an impact one way or another.

This variability makes fixing a valuation impossible other than by setting up a trading platform in art similar to Euronex on the stock exchange, but this would be unrealistic given the nature of the art market .

To summarize: there are many factors which can raise the value of a work of art, ranging from successful auctions through to well-displayed promotion, effective marketing, fashion, a buyer’s taste, acquisition by public art galleries or well-known collectors.