Auctions - Reserve v Guide Price

MickKnipfler

Does anybody know how the reserve and guide price usually relate in a property auction? Which is usually higher?

zipwen1

its just the same as a normal auction the reserve could be higher or lower than the guide. the guide is just what the auctioneer is expecting it to go for. if the reserve is not met u can usually speak to the auctioneer afterwards and come to some arrangement

Debt_Free_Chick

The reserve is the minimum price that the seller will accept. Usually, it's the lower of the two.

The guide price is the approximate value placed on the property by the auctioneer/agent. A property could go for much more than the guide price if there are two buyers who really want the property.

david29dpo

or...... like what happened to me. i got a house for less than the guide price. i think the world cup was on the telle at the time! it could go either way, like said above, it only takes two buyers to want it, or none.

real1314

Then again, some auction houses set low guide prices to attract more interest.
and yes, you might find that bids don't reach the guide price, but if the reserve is higher than the bids then it's a "no sale".

On the other hand I've seen properties go 10% over the guide and still not meet the reserve.

Personally I'd ignore guide prices and look at other properties in the same street / area using Land Registry data.

thesaint

At the auctions i've been to the guide price has bore no relation to anything apart from being very low in order to get punters through the door.

The guide price has been so low that the gavel has come down £20k above the upper guide price only to be withdrawn because it didn't make the reserve.

Richard_Webster

Whilst on the subject of auctions, have a look at this thread where some of the dangers are exposed - you do need to know what you are doing!

http://www.houseweb.co.uk/house/forum/Forum4/HTML/000220.html

MickKnipfler

So if the reserve is right at the top of the guide price, it's not really anything to worry about?

Debt_Free_Chick

MickKnipfler wrote:

So if the reserve is right at the top of the guide price, it's not really anything to worry about?

It depends where the guide price has been pitched. If it's at the lower end of the valuation, then the seller wants the property to sell for at least the lowest end of the value.

If the guide price is at the top end of the valuation, then he basically wants full whack.

As a buyer, you should attempt to get a local agent to give YOU his valuation of the property. Then you will know where the guide/reserve price has been pitched.

Better still, get three valuations and take the average.

MickKnipfler

I had a few valuations. The reserve is probably a respectable selling price, which is a little below the "marketing" price. The top end of the guide price is the reserve.

I don't know how important the guide price is really though. I've seen the hammer price at double the guide before now....

thesaint

Please be aware, like I have already stated, the top end of the guide price is not the reserve. I have seen properties surpass the guide price by £20k and not reach the reserve. As far as I know there is no legal connection between the guide price and the reserve. If there is, can someone post a link.