What is an Irrevocable Bid?

On auction night, Auction Houses are on the hook to sell $250M to half a Billion dollars of Art.
They offset their risk by working together with collectors to arrange the Pre-Sale of a painting at a determined price before the Auction, called a Guarantee, or Irrevocable Bid.

An Irrevocable bid is an agreement with a collector and an auction house on the lowest price of a painting to be sold at auction before sale starts.

Auction Houses use guarantees to limit their risk on auction nights. To secure the listing with sellers, auction houses promise a minimum sale price and have to deliver this to the seller. They use a third party buyer to re-sell their guarantee and limit their obligations. The Agreement is to purchase the painting at the pre determined lowest price before the auction, if anyone bids above the guarantee level, and outbids the guarantor, the guarantor splits the profits with the auction house.

If the guarantor keeps bidding and wins the lot, the commissions from being the guarantor are deducted from the hammer price. In collecting it is the best way to buy high value works at the lowest possible price, while also giving yourself an opportunity to make money should you not land the painting.

Jude has executed guarantees at every major auction house on paintings from Warhol, Twombly, Magritte, Moore, Picasso, Basquait, Fontana, Richter, and more.
When considering guaranteeing a painting at auction, Jude can help you navigate the ideal price, explore possible profits from every scenario, and save money on fees.