What does 'Guide Price' mean when buying a property?
Find out what Guide Price means when you are buying a property. 'What does Guide Price mean?' plus over 150 other property related terms and jargon in plain English
Guide Price
If you've been looking at properties which get sold at auction then you'll have seen they are listed with 'Guide Prices' but what does this mean and what should you expect?
At auction two prices are used for most properties
- Reserve Price - The vendor will not sell if bids do not reach this price.
- Guide Price - the price the auction house expects the property to sell for .... sort of ....
Yes, that's what Guide Price is supposed to mean but in reality auctioneers abuse it and will use a figure much lower than what the property is most likely to sell for.
Why? Bums on seats! If you have been looking for a house and the type you are after on the location you are after all seem to be about £100,000 but then you see an auctioneers brochure listing what seems to be your ideal place with a Guide Price of £75,000 then what are you likely to do?
Then things work like all normal markets - cram lots of eager buyers into one place at one time and hope they get carried away with themselves in the manic bidding atmosphere. The truth is they often do and some properties sell at auction for a higher price than they would when listed with an estate agent.
A property on the open market gives potential buyers time to think things over. In an auction room being indecisive for a few seconds will lose you your des res and that sense of urgency makes people bid more than they would offer via an agent.
Last week you thought £100,000 was pricey, in the auction room you end up paying £110,000!
Only once in a blue moon does a property sell at or near the guide price so keep your expectations realistic. Auctions are not the home of bargains that they once were.
For the full detail on buying at auction pick up a copy of my book How to Really Buy a Property
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Property FAQ
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- The property price was £190000 I offered £191000 and accepted the property was showing sold as after survey I lowered my offer to £181000 and provisionally accepted again ,but now it is on market and
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Property Terminology
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- Agreement in Principle
- Exchange of Contracts
- Homebuyers Survey
- Leasehold
- Sealed Bids
- Sold Subject to Contract
- Sold Subject to Survey
- Subsidence
- Rising Damp
- Land registry
- Asking Price
- Reserve Price
- Guide Price
- Property Bubble
- Contract
- Trading Gap
- Property Cycle
- Off Plan
- Retention
- Yield
- Down Valuation
- Lifetime Mortgage
- Negotiator
- Lease Length
- Loan to Value
- Pooled Commission
- Joint Sole Agency
- Conditional Exchange
- Under Offer
- Gazump
- Upsizing
- Fall Through
- Agreed Price
- Draft Contract
- Share of Freehold
- Sale Agreed
- Upward Chain
- Cash Buyer Only
- Vendor Suited / Suited Seller
- Bridging Loan
- Credit Check
- Offer Agreed
- Gazumping Insurance