What does 'guide price' mean?

Setting the right price for your property is no easy task. On the one hand, you want to ensure you make enough money from the sale to move up the property ladder. But on the other, you want to make sure you attract a buyer as soon as possible.

So when homesellers ask, 'what does guide price mean when it comes to selling a house?' The answer is simple: ‘It’s the price you think your home is worth.'

But, how do you find out how much your property's guide price should be?

This article explains the meaning of guide prices and how different price points can influence the offers you get from potential buyers.

What does guide price mean when selling a house?

A guide price –– whether you are selling conventionally or through a property auction –– represents an acceptable offer to drum-up interest from as many potential buyers as possible. A guide price can be closely related to the property's mortgage valuation. However, it can also be higher (if the seller believes there will be a lot of interest) or lower (for example, if the property needs renovation work).

In property auctions specifically, 'guide price' refers to the listing price for viewings and auction brochures. It is the minimum price a seller would hope to get for their property. Guide prices can be around 15-25% lower than the average bid sellers expect.

Guide prices vs. reserve prices

In auctions, the reserve price refers to the lowest possible price for which the seller would agree to sell the property at auction. In contrast, guide prices at auction are a figure that 'guides' potential buyers into making the best possible offer for your home.

There’s lots of other guide pricing jargon. Here is a quick rundown of some of the terminology you may hear estate agents use when setting property prices:

• Offers in the region of (OIRO): The seller specifies a price within a specific range of figures.
• Offers in excess of (OIEO): The seller will accept offers exceeding a minimum price.
• Bids off the wall: Refers to an auctioneer giving bids on behalf of the seller for lower than the property reserve price to encourage genuine bidders.
• The 10% rule: In property auctions, the reserve price should be no more than 10% higher than the guide price. If the guide price is listed as a range with minimum and maximum bids, the reserve price must be within that range of figures.

What does guide price mean when buying a house?

Guide prices are often used in auctions, but can also appear on conventional property listings. Typically, guide prices generate interest for new properties on the market. But in some cases, a listed guide price can indicate that the seller will accept a lower offer because the property may need renovations.

Homebuyers may see guide prices on their ideal home and question whether they should make an offer for the same amount or put in a higher (or lower) bid. In these cases, it’s worth researching the local market to determine the average sale price of similar properties and compare the figures to relative guide and asking prices.

Sellers may accept offers that are lower than the guide price if they want to make a quick sale or if the buyer has no chain and can pay cash. Generally, offering 5-10% below the guide price can open up negotiations. Eventually, the seller and buyer can then agree on a selling price that they are both happy with.

It's important to note that in England and Wales, you do not need a conveyancing solicitor to place an offer on a property on your behalf. However, in Scotland, you must seek legal advice before making any offers to buy property.

What's the difference between asking prices and guide prices?

The most common price found on property listings is called the asking price. Asking prices are determined by many factors, such as the location and condition of the property. Unlike guide prices, asking prices are often fixed (although the seller may accept a lower offer in some circumstances).

Essentially, asking prices and guide prices are designed to encourage buyer interest. Both prices are flexible, depending on the needs of the seller and the property market. The key difference is that guide prices are more subjective (what the seller hopes to get for their home), while asking prices tend to be more reflective of housing supply and demand in the area,

Do properties actually sell at guide price?

Last year around a third of properties in the UK sold for more than their asking price. The same study also found that there's an average of 16 buyers for every property on the UK market. Therefore, it could be argued that guide prices driven by seller expectations, can accurately reflect market forces in some instances.

Provided you research the market well and set a realistic guide pricing bracket, it’s very possible to sell your property at an optimistic guide price. Make sure you seek advice from experienced estate agents to help you establish your ideal guide price.

GetAgent can help you find the right guide price

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