At Open Door, we believe that our modern approach to auction can be the best way of selling and buying any home. But we know that it’s not the first option for most people, and lots of sellers and buyers are looking for more information about the process.
There’s one question in particular which we’re asked time and again: what is the difference between the guide price and the reserve price?
It’s pretty straightforward, honestly.
The guide price is used to spark interest, increase viewings and – hopefully – lead to more offers. It is the published “starting price” of the property and has to be within 10% of the vendor’s target sale price. It is designed to help a property “stand out” from the competition and generate “buzz” and competitive bidding.
In contrast, the reserve price is used to protect the vendor’s interests. It is jointly agreed by the vendor and the auctioneer in writing, and is never shared with the public. It is against the law for an auctioneer to sell your property for less than this price … although they are obliged to put forward any lower offers just like traditional estate agents.
So the guide price is simply a way of attracting more buyers?
That’s right. Let’s face it, we all find it hard to resist a good offer at the supermarket, and a guide price makes your property look like a great buy. A guide price doesn’t mean that your home will be sold cheaply – it’s all about making you stand out from the crowd and making sure that your property is the only one on the market that everyone wants to see.
You can find lots more information about property auctions on our main website or through one of our other blogs:
If have any questions, feel free to drop us a line and we’ll be happy to answer them!