Blog Post

The misunderstanding of a 'Guide Price'

Publish Date: 23 May 2022

By Jade Shrubsole

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Further reading

How to buy a property in 28 days

Important things to consider when viewing a property

The misunderstanding of a guide price

The guide price is one of the biggest areas of confusion within the auction industry. The ASA ruled that the reserve price cannot exceed the guide by more than 10%. Most importantly this is only an indication of where the reserve is and is subject to change throughout the marketing period. It is NOT what the auctioneer necessarily expects to sell the property for!

An auctioneer may think he can sell a property for £300,000 but if the vendor is happy to set the reserve £100,000 less than this, the auctioneer can guide it at less at £200,000! The result is that that a lot of people then think it’s a great deal, they do a lot of due diligence but are then surprised when the property sells for £300,000.

The lower the guide the more interest its human instinct, but what a purchaser must realise is it not what the guide price is, but what the property is likely to sell for. Our website can help indicate that.

If you can’t afford the guide price you have little chance of buying the property. What you don’t want to do is think you can buy a property on reserve/guide price, spend money on due diligence then see the property go for far more than what you expected to pay.

Work out what a property is likely to sell for by running a search on our website we have many clever tools on our website including property price history and whether a property has been to auction before. If you’ve worked out what you think the property will sell for and the price is within your budget, then do the due diligence.