What is a price anchor? Oh, let me tell you, my friends. A price anchor occurs when someone you trust tells you the value of something based on perceived value from the past. It could be something your grandmother told you when you were a child. It could be your dying aunt on her death bed in Madagascar, whispering in your ear, and spoken like an end-of-times prophecy, the value of something you are going to inherit. There is your anchor and the price part comes from the false perception that what they said has more validity today than the facts.
Here is a real, paraphrased story, as told to me by a wonderful consignor. “My great grandmother told me that she used to date Edgar Degas. She was a dancer at the time in France. She brought one of his paintings to the U.S. on a plane, long ago, and even had to charter its own seat as it was so large and baggage claim would not allow it underneath.”
This was now the word of God or Great Grandma to a young girl. Here was her price anchor and $10 million parachute retirement. It sounded awesome to me, and as a novice auctioneer at the time, I was all in. I jumped in the ocean holding onto the anchor as well.
I contacted several experts who were equally excited. I told them the legend, sent them photos and waited for them to tell me how I was about to make my name in the business for finding this rare treasure. Then a wonderful gentleman and French Impressionist expert let me have it eloquently and plainly. He showed me how the work was not an original, but an early 20th century printing technique and saw how I, a novice, could be fooled. He showed me which actual work it was a copy of. He then talked me off the ledge, or in this case, the bottom of the sea as I was holding the price anchor.
Now the hard part. I had to tell the consignor and her family that the legend was not true. Did you see it coming? The messenger was shot. I was the idiot and they were convinced they had a valuable, original Degas. They were going to New York to sell it at a major auction house as I was a fool or worse, trying to pull something. I took it very personally. Funny thing is that now, so many years later, I can reflect back to what was so common in my former business. I suggest to Auctioneers & Estate Sale Companies all the time, if your consignor doesn’t want to let go of their price anchor, just pleasantly pass by. A lot of times they will come back to you, as you were the first one to break the news to them.
Truth be told, sometimes time is the anchor. What people were told at the time may have been true. The value could have been there, but tastes change, and now there may be no interest or demand. Age doesn't matter in the end – it all boils down to desirability. You can show someone 100 sales results for the exact thing they have, be it on eBay, Invaluable, Live Auctioneers or auction records worldwide and it won't matter. Mom, Dad or Great Grandma gave them the price anchor and it is THE TRUTH.
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