Art and Real Estate Have Many Things In Common
The value of great art and great real estate often travel hand in hand. When great paintings set price records, great real estate often follows suit. While art often sells at auction, real estate more typically gets brokered between individuals. That said, the great private art dealers control large parts of the art market, sourcing paintings for their clients, contacting collectors, amassing stock. The great real agents deploy many of the same skills. Both art and real estate are commodities, valued at what the market will bear. So different styles and periods go in and out of fashion, prices rise and fall, and the dance goes on.
Why then, are the skills of the art dealer or auction house so vastly more valued than those of the real estate dealer? Are the great houses and apartments we represent so much less the work of great artists and artisans? Are the spatial arrangements of the great Timothy Pfleuger and Bernard Maybeck buildings of San Francisco, or the Addison Mizner estates of Palm Beach, or the layouts and detailing of the great Candela apartments in New York, not works of art in themselves? What’s the difference?
The best agents have developed enormous knowledge around the architects and styles which abound in New York. Like a great art dealer, we frequently guide our clients towards what we intuit they desire, which may not be exactly what they describe on a first meeting. In New York, we work with them to craft a financial and social picture at which co-op boards will look with favor, while reassuring them as the process drags on.
I like buying art at auction, especially prints. For artists I know well, I will sometimes buy from the online image without going to see the piece. But I know that part of the process involves paying the auction house a 25% buyer’s premium. When I buy from galleries, I know that the gallerist retains anywhere from 30% to 50% of the sale price. Private art dealers charge similarly. I don’t begrudge these organizations their money because I know how much work is involved in styling a property to maximize value, creating buzz around it, and then working strategically to make a market. It’s what I have done every day of my career.
Every day I read about new online apps being designed to remove real estate brokers from the transactions in which they are involved. And every day I read about start-up companies who want to devalue the service we provide by cutting our fees (which at their highest are rarely even a third of what art auction houses are charging) by half or two thirds while claiming their staff agents can provide the same service that we do (they can’t.)
I have always liked to say that brokerage is the second oldest profession. The need for the service we provide has existed ever since people began to trade with one another. Over the decades, as the homes we sell have become more expensive and the transactions more complicated, the broad array of skills real estate agents require has expanded to include issues regarding financing, title, open permits, liens, and tax issues in addition to the market analysis and negotiating expertise which remain the bedrock of our craft. I am not suggesting that we, like Christie’s or Bonhams, should receive a 15%, 20% or 25% premium for what we do. But the service real estate agents provide has real value. For too long, the complexity of that service has received inadequate recognition. It’s time the marketplace, and public opinion, recognize us for the skilled practitioners that we are.