On 2 November 2006 a Mr. David Martinez reportedly broke open his piggy bank and shelled out $140 million for the Jackson Pollock painting No. 5, 1948.
Let’s say that Mr. Martinez decides he doesn’t like the painting after all and puts it up for auction at Sotheby’s. I’m interested in buying it. It’ll be a struggle financially but what the hell. I think the work will appreciate in value over time.
Do I need to register my interest with the auction house? I’m guessing that Sotheby’s wish to know who is bidding for No. 5, 1948 and, furthermore, require to satisfy themselves I have sufficient funds to pay for it. How would they go about doing that? This question applies whether I am present at the auction or whether I am bidding by telephone.
If I secure this lot through the highest bid (say $150 million) but, on checking my wallet, I discover I am a little shy of the agreed price, what penalties am I looking at for wasting everybody’s time? Do Sotheby’s contact the underbidder and offer him the painting at the price he was willing to pay? Even if the underbidder is still willing to do business the vendor will receive less payment than before. Conversely, if the underbidder won’t play, the lot would presumably need to be resubmitted at another auction at a later date. Either way, expenses will accrue.
How does all this work?
Thank you.