What Does Guide Price Mean?

What is a guide price?

A guide price usually refers to the lowest offer a seller will happily accept for their property. This is especially useful at property auctions, as the guide price will set out where the bidding is expected to begin.

Similarly, when a property is being sold through an estate agent, a guide price will be used as a starting point for negotiations. Some agents may even use a temptingly low guide price to drum up additional interest in the property.

Guide price is sometimes confused with asking price. But the two are not the same.

Guide price vs asking price – what’s the difference?

Guide prices are there to provide potential buyers with an idea of how much money they may need to raise to secure a particular property. They represent the minimum amount a seller would be happy to accept, and should be viewed as an invitation for negotiation – not a fixed price tag.

An asking price is less flexible and will usually reflect the amount the seller is aiming to sell their property for. While you can still negotiate on an asking price, whether your offer is accepted will depend on the state of the housing market and how long the property has been up for sale.

How do you decide on a guide price?

The guide price established for a property will depend on a number of factors, including:

• Location
  If your property is in a popular area with local amenities like schools, shops and restaurants nearby, your guide price is likely to be higher.
• Size
  The square footage of your home should also be taken into consideration when setting a guide price, as this is likely to impact how much buyers are willing to pay.
• The local housing market
  If you’ve noticed that houses in your area are not selling quickly, your guide price may need to be set lower. But if demand has been high, you’ll have more room to increase this figure.

Each of these points are important, but you should also consider your own expectations when setting a guide price. You’ll know your property better than anyone, so your opinion on what it’s worth should be a key factor in the decision making process.

Your estate agent should help you work out a guide price for your property, but it will ultimately be up to you to decide on what this should be.

What should I offer when there’s a guide price?

If you’re buying a property through an estate agent, you’re entitled to make any offer you like. But you should be careful not to go too low, as this could upset the seller. Reasonable offers will usually fall within 10-15% of the set guide price.

The rules are slightly different when it comes to buying a property at auction, though. In these cases, you won’t be able to make any offer that’s lower than the established guide price. But this figure may be lowered if there is limited interest in the property.

It can often be difficult to find the ‘sweet spot’ when it comes to making an offer on a property you love. Your estate agent should assist and advise you in this area. But if you need help with the legal side of a property purchase or sale, our conveyancing solicitors could help you.

To find out how we could match you with your ideal solicitor or conveyancer, give us a call or start your enquiry online.

Note: First4Lawyers offers this information as guidance, not advice. Before taking any action, you should seek professional assistance tailored to your personal circumstances.