Auctions - Reserve v Guide Price

Debt_Free_Chick

thesaint wrote:

As far as I know there is no legal connection between the guide price and the reserve

I agree.

The guide price is what the auctioneer/surveyor thinks is "fair value" i.e. what you would market it at, if you were selling via an agent.

The reserve is the minimum that the seller will accept.

A reserve price above the guide price would, however, suggest that the seller is not in the real world - or that they don't really want to sell and that they are "attached" to the property. You would have to be really lucky to find a buyer willing to pay over the valuation.

keep_it_real

Hi

First post so please be kind ! I’ve invested over the years in property auctions and depending on the house/area/public interest it can go well over the guide price or (when I usually buy) well under. The key thing here is to know a fair price for the property you are bidding for. DO NOT BE TEMPTED to over bid like so many people I’ve seen.

The best way to judge a fair price is to view
http://www.nethouseprices.com/
this will give you an idea of what the public is actually paying for houses in the area.

The second thing to do is register at one of the many auction property sites that send you all the info of properties\etc going to auction. I currently use http://www.sionproperties.co.uk/
because at this stage it’s the cheapest on market.

Good months to purchase properties are in Jan, Feb and March time. Usually 30% of properties are below there guide price. Bear in mind there is usually a reserve but if your offer does not meet the reserve the auctioneer will submit your offer anyway and leave it up to the vendor to decide (I’d a few successes this way)

Hope this helps !

P.S don’t really understand why first time/normal buyers don’t go to auction rather than paying the high house prices these days……….

MickKnipfler

"A reserve price above the guide price would, however, suggest that the seller is not in the real world"

No necessarily. I accepted the reserve recommended by the auctioneer. They then set the guide price without consulting me. The reserve is right at the top of the guide. I wasn't involved