Nearly every work of art offered for sale at auction is accompanied by a published estimate. The estimate is not a single value but a range, e.g. US$90,000 – US$165,000 or US$4 – 9 million
Auction Estimates have two important functions:
First: to indicate to potential bidders what the auction houses considers to be the value of the artwork based on their knowledge of the market
Second: to protect the seller’s reserve, which is the minimum price the auctioneer will accept as a bid. By law, it cannot be higher than the low estimate (it is sometimes below the low estimate). However, the reserve is not disclosed, but experienced bidders know it is unlikely that, competition aside, they can purchase the artwork for substantially below the low estimate.