Auction Guarantees
Auction guarantees are a contractual agreements to pay consignors a minimum price for an artwork, regardless of whether it sells at auction.
Third-party auction guarantees benefit consignors by providing a guaranteed minimum sale price and eliminating the risk of an artwork failing to sell ("buying in"), while still allowing consignors to participate in potential upside profits if the hammer price exceeds the guaranteed amount.
Third-party art auction guarantees allow auction houses to secure high-value, desirable consignments by providing sellers with a pre-sale price assurance while shifting the financial risk of unsold lots and securing profits on overages to our external underwriters.
Private underwriters of auction guarantees generate capital by charging a financing fee (often a portion of the buyer's premium) for taking on the risk of a guaranteed sale, and by securing a share of the profit or "upside" if the hammer price exceeds their guaranteed amount.