Q & A With Perm Daley 

 Auction Director

Understanding Guide Prices

What exactly is a guide price in the context of property auctions?

From a seller’s standpoint, the guide price represents their minimum expectations and gives an indication of what the reserve price will be. It does not reflect the market value of the property.

Determining Guide Prices

How are guide prices determined for properties being auctioned?

The sellers will determine the minimum guide price based on their expectations for the property.

Factors Influencing Guide Prices

What factors influence the setting of a guide price?

In my experience, the main factors include the condition of the property, its location, and my minimum price expectations.

Guide Prices vs. Reserve Prices

How do guide prices differ from reserve prices in property auctions?

The guide price serves as the marketing price, while the reserve price is typically within 10% of this guide price.

Changing Guide Prices

Can the property guide price change before or during the auction process?

Yes, based on interest levels, the guide price can be amended. An addendum is issued to reflect any changes.

Attracting Potential Buyers

What role does the guide price play in attracting potential buyers to the auction?

Guide prices are crucial in generating interest as they represent the seller’s minimum expectations.

Risks of Relying on Guide Prices

Are there any risks associated with relying solely on the guide price when considering a property?

Absolutely. The guide price is merely the seller’s minimum expectation and does not reflect the actual market value.

Accuracy of Guide Prices

How accurate are guide prices in reflecting the true market value of a property?

Guide prices do not reflect market value; they are only indicative of the seller’s minimum expectations.

Auctioneer’s Advice

How do auctioneers advise sellers on setting appropriate guide prices for their properties?

Auctioneers typically advise sellers to set guide prices at their minimum expectations to generate maximum interest in the property.

Researching Guide Prices

What steps can buyers take to research and evaluate the guide price of a property they’re interested in?

Buyers should compare property prices in the area using property portals like Rightmove, Zoopla, and On the Market.

Impact on Buyer Expectations

How do guide prices impact buyer expectations and bidding strategies during auctions?

Buyers might be disappointed if the final property price significantly exceeds the guide price.

Condition and Location

How does the condition and location of a property affect the guide price?

Guide prices are usually lower, reflecting the property’s condition and location, due to the seller’s minimum expectations.

Legal and Regulatory Requirements

Are there any legal or regulatory requirements regarding the disclosure of guide prices in property auctions?

Property guide prices must not be more than 10% above or below the reserve price, as they indicate the reserve price.

Marketing and Promotion

How do property guide prices influence the marketing and promotion of properties prior to auctions?

Guide prices, typically below market value due to the seller’s minimum expectations, generate significant interest.

Variation Between Property Types

Can guide prices vary between different types of properties (e.g., residential, commercial)?

Yes, guide prices can vary depending on the type of property.

Advice for Buyers and Sellers

What advice do you have for buyers and sellers in effectively interpreting and utilising guide prices?

For buyers, it’s essential to perform due diligence and understand the market values of properties in the area. Sellers should note that setting minimum expectations can generate maximum interest.

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