1) Buy a mediocre painting instead of a great print. Or for that matter buy a mediocre painting rather than a great drawing. Too often collectors get caught up in art’s snob appeal. The objective is always to buy the best within your budget, regardless of medium. As wonderful a draughtsman as Jasper Johns is, not all of his drawings are up to snuff. It’s much better, from an investment standpoint, to buy one of his great prints, such as Ale Cans. There’s no doubt that it will appreciate at a faster rate than one of Johns’ murky ink-on-vellum drawings.
2) Let the auction houses talk down your reserve. From the auction house’s perspective, it’s all about convincing consignors to accept the lowest reserve possible. If, for instance, you put a painting up for auction and agree to a pre-sale estimate of $600 - $800, and a reserve of $600, you can expect a call a few days before the sale that will go something like this: "Look, we think your picture will do well, but given the economy, let’s be on the safe side and lower the reserve to $500. Don’t do it. If your painting passes at $600 the auction house will field offers for it after the sale. Chances are the bidding stalled at $550 which means a potential after-sale buyer is likely to offer $500 (or less). If your reserve is already down to $500 you’ll probably be offered $400 (or less). The bottom line is that if you have a good painting, someone will pay up. If not, you shouldn't have put it up for auction in the first place.
3) Accept a mere 10 percent discount from a gallery. For the purchase of works by contemporary art gods such as Brice Marden, Ellsworth Kelly and a handful of others, a buyer would be lucky to receive a 10 percent discount on any purchase from their galleries. But superstars aside, accepting a standard 10 percent off on even a successful mid-career artist is a mistake. Galleries generally work on a 60-40 split with artists they represent. This means you should be able to get at least 20 percent off with a little negotiating. Right now, not only are galleries hurting, but so are their artists, who got used to flush times. From a dealer’s perspective, few things are worse than having an artist bug him or her for money. If for no other reason than that, galleries are likely to accept your 20 percent discount request. Try it.
4) Buy an atypical work. Another sucker bet. There always seems to be one artwork in any given show where the subject matter veers off into the ozone. If you’re buying a Wayne Thiebaud, you obviously want to buy "sugar." Even though Thiebaud is a first-rate portrait painter, the art market could care less. No matter how tempting one of his figurative paintings may be, or how attractive its price, treat it like drugs and just say "no." You may even decide that you genuinely like the painting regardless of market forces. But if you acquire it, when the time comes to sell, you will come to despise your "inspired" purchase when you see how difficult it is to unload at any price.
5) Buy a work right after an artist has died. One of the biggest myths in the art market is that an artist’s work shoots up in value right after his or her death. Wrong (with the exception of Warhol). Most actually go down in value. The reason is that his market usually becomes flooded, thanks to family members struggling to pay estate taxes and dealers and collectors looking to cash in. Better to wait a year or two and let the dust settle, even if you end up having to pay a bit more.
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