Giacometti bust, estimated to fetch $70 million, goes unsold: How do art auctions work?

The auction market disappointment came mere days after a $30 million Andy Warhol painting was withdrawn from a Christie’s sale when the consignor, who had put the work on auction, arguably realised it might not meet its asking price.

These setbacks are seen as a sign of a struggling market, one that may require a reassessment of pricing expectations and collector sentiment.

What are auction houses?

An auction house essentially serves as an intermediary between sellers and buyers, receiving commissions from both. They may task a team to source and screen artworks based on market demand.

“Every auction is curated based on the different arts we want to feature, modern or contemporary,” Manoj Mansukhani, Chief Marketing Officer, AstaGuru Auction House, told The Indian Express. “We need to create a mix that appeals to both seasoned collectors and new buyers. A few months are also dedicated to prepare the catalogue.”

When is an artwork put up for auction?

“Historically, the primary reasons that prompt individuals to consign artworks to auction are the three D’s: debt, death, and divorce”, according to the Sotheby’s Institute of Art. “However, other factors such as a shift in personal taste or the need to downsize may also influence the decision to sell.”

An auction house may be alerted about the existence of a rare or high-value artwork and subsequently collaborate with the owner to facilitate its sale. Christie’s, for instance, remained in touch with Oslo University Hospital for over 13 years before it put MF Husain’s 1954 canvas Untitled (Gram Yatra) on sale at an auction in New York in March 2025. This evocative homage to rural and pastoral life in India achieved a remarkable $13.7 million (approximately ₹118 crore), setting a new benchmark as the most expensive work of Indian art ever sold at an auction.

How is the value of an artwork determined?

The value of an artwork is estimated once it is verified and its provenance and authenticity are checked.

Before a lot (comprising an item or a collection of items) is put up for auction, it is assigned a low and high estimate, providing a range of the expected value it could achieve. The auction catalogues reflect these estimates alongside the details of the artwork. The lower estimate typically serves as the reserve price, the minimum a seller will accept for the artwork, and below which a sale will not be made.

The Husain mural sold at nearly four times its higher estimate of $3.5 million.

1. 01

   The artist and the provenance

   The signature on the artwork and its provenance traced from the artist’s studio onwards play a significant role in its valuation. Where it was exhibited and published are also factors taken into account.

   Similarly, its past or present ownership may also elevate the value. In 2016, Greek Landscape by the ‘Grammarian of Art’, Akbar Padamsee fetched Rs 19.9 crore at a Saffronart sale in Delhi, then a record price for the modernist. The piece was owned by Krishen Khanna, Padamsee’s fellow artist and close friend, who had purchased it from artist-collector Bal Chhabda (also their close friend) over five decades back for Rs 1,000.

2. 02

   Stylistic importance and period

   After Saffronart sold Amrita Sher-Gil’s canvas The Story Teller for Rs 61.8 crore in 2023 – then a record high price for Indian art – Dinesh Vazirani, co-founder of Saffronart told The Indian Express, “The importance of the work in the oeuvre of the artist also plays a significant role. So, an MF Husain (who was very prolific) from the 1950s and 1960s compared to a later Husain will have a completely different (higher) value, and it will be the same for an SH Raza from the 1980s, a VS Gaitonde from the 1970s and 1980s, and a Tyeb Mehta from the 1990s (the periods during which each of these masters produced their most critically acclaimed works).”

3. 03

   Availability and rarity

   It is largely believed that the best works of Indian modernists are perhaps already with serious collectors and therefore rarely come under the auction hammer. When they do, they grab instant attention and escalating bids.

   In addition, some artists were less prolific than others, leading to even fewer of their works in the market. Sher-Gil, for instance, is known to have produced fewer than 200 paintings, of which a large number are with the National Gallery of Modern Art, and some are with her estate. This leaves approximately only 30-40 of her works with private collectors.

4. 04

   Condition and medium

   How a work has been preserved or if there has been heavy restoration are considerations. Additionally, some media are traditionally more commercially favoured than others. For instance, canvases by the same artist are likely to be priced higher than drawings.

5. 05

   The story behind an artwork

   A particular artwork might be distinctive in an artist’s oeuvre. For instance, in the 1960s, VS Gaitonde had already started moving towards abstraction, inspired by Zen philosophy and spiritual teachings. His 1961 untitled oil with layers of pigment in tones of blue belonged to the same genre, but was cited as one of his last few horizontal canvases. When it came up for auction at a Saffronart sale in 2021, it fetched Rs 39.98 crore — a record for the highest price achieved for a work of Indian art in an auction at the time.

6. 06

   Market Comparables

   Along with the historical sale price of similar works, the current market demand for the artist’s work is also used to calculate the auction estimate.

What happens if the work fails to find bidders?

If there are no bids for a lot, or if the bidding does not reach the reserve price, the lot is bought in, meaning it remains unsold. Unsold artworks are usually returned to the consignor, who could ask the auction house to offer the artwork for auction again. This may be done after a delay, since the unsold work is considered burned, making it more difficult to find a buyer immediately at a similar price.

A different scenario emerges if the artwork has a guarantee, done to ensure that it secures a pre-decided minimum price on its sale. This is practised occasionally for high-value or significant works that come up for auction. A guarantee may be offered by the auction house itself, in what is called a house guarantee. Alternately, it may be provided through an external undertaking, through a collector, gallery, or art dealer known as a third-party guarantee.

The Giacometti sculpture, put on sale from the estate of real estate magnate Sheldon H Solow, who died in 2020, came to the auction without a minimum guarantee.