How To Price Art

Research is the key to how to price art. The art's beauty rests with the viewer. The price paid for art also rests with the value the buyer places on a piece of artwork.  Determining the value for a piece of art requires research and continually monitoring the market to make sure the set price is still competitive at any given time.

1. Determine the reason for the pricing. Reasons for establishing the price for a piece of art includes potential sale, insurance evaluation and assessment for taxation for an estate settlement. The situation influences how to price art and the final determination has wide variations. Auction prices are what the buyers pay at auction and this is usually less than a retail situation. Pricing for insurance purposes is based on a replacement value to find the same item if a piece of work is stolen or damaged. This price is much higher than auction prices. In the case of a rare piece of art, the piece may have been purchased years ago for a relatively moderate price that has now skyrocketed due to market conditions. Estate prices used for inheritance purposes usually are lower than both auction and insurance pricing. If the price set is too low, in order to reduce tax liabilities, a court or the legal taxing authority may challenge the price set. 
2. Do research to place the piece of art in the market. Research involves searching for auction and private sales of similar art. Online reporting and auction catalogs with sales price lists are important research materials. Match your piece of art with the examples that have sold. Make a chart of the similarities and differences between the two pieces. If possible, make a copy of the other artwork and put it in your official files. This will help in re-evaluating the price estimate if you plan to keep the piece for later sale or as part of a collection. 
3. Talk to experts. Go to places, both in person and online, where art fans hang out. Observe the general chat and ask questions about the artist in question. Be cautious about giving too much information about your particular piece of art since it may attract unwanted attention. Art thieves also use these forums to target potential victims, so until you are sure the forum participants are bona fide art collectors, keep your questions general and targeted to the artist. Never identify your geographic location on the forums.
4. Get an appraisal. Before selling an art work, obtain a professional appraisal from an expert. Consult museums, if the work is an important work, for a list of reputable appraisers. The amount paid for appraiser fees ensures that the price set is appropriate. The official value assists in determining a fair price range for the piece. Make sure the appraiser is a member of a professional society that sets codes for behavior and values. Well-known art appraisal groups include American Society of Appraisers, American Association of Museums, Appraisers Association of America, Appraisers National Association, International Fine Art Appraisers and the International Society of Appraisers. If foreign art is being evaluated, consult an international association such as the Confederation Internationale des Negotiants en Oeuvres d'Art.
5. Stay current on prices by keeping an eye on the market. Knowing how to price art includes keeping up to date on price changes over time. Art genres go in and out of popularity and don't bank on an appraisal made in the past. In times of economic depression, art may climb in value, but all forms of art don't appreciate at the same rate. Popular artists, artists in popular schools of art and art incorporating precious metals or stones usually increases over time. The value of furniture as art can vary wildly over time. Collect written articles and photographs matching the genre and artist and update the files each year. 

References:

Don't Invest in Art