At a glance
A guide price will mean slightly different things in different contexts.
When buying via an estate agent, the guide price is usually the minimum the seller will accept.
At an auction, the guide price is where bidding will start on the auction day.
The guide price doesn't indicate what a property will finally sell for.
What does a guide price mean?
Depending on where you’re searching for your new home, ‘guide price’ could have slightly different meanings and uses.
In property auctions, bidding usually begins at the guide price. A temptingly low guide price can be one way to generate more interest in a property.
In standard estate agent listings, a guide price is usually the minimum amount a seller wants for their house. It’s how much the owner thinks their property is worth, although it may not necessarily correspond neatly to a professional valuation.
How is guide price used in property auctions?
The guide price is where the bidding will start on auction day, but it doesn’t usually reflect the final sale price. How much the property eventually sells for will depend on how things go in the bidding room.
The guide price is determined by the auctioneer, based on the seller’s reserve price, which is the minimum a seller will accept for their property. But guide prices are not an indication of a valuation or the anticipated sale price.
To help buyers, the auctioneer should provide a clear definition of the guide price and if it is subject to change. The Royal Institution of Chartered Surveyors (RICS) says:
“Where a guide price (or range of prices) is published, that guide is the minimum price at which the seller is prepared to sell at the date of publication. If a range of prices is given, the minimum acceptable price should not exceed the lower end of the range.”
Advertisements featuring guide prices also need to provide a clear reference to any auction fees as well as an explanation of how they are calculated. That way, buyers have a general idea of what they would pay in total.
The guide price can be a single figure or it can be a range. The auctioneer isn't allowed to disclose the reserve price unless instructed to do so by the seller. But the guide price can give bidders an idea of what it’s likely to be.
Although the auctioneer can start the bidding at a lower guide price, they can’t sell the property for less than the seller’s reserve price.
How is the term 'guide price' used by estate agents?
You’ll also see the term ‘guide price’ come up in ordinary property listings.
As with property auctions, the guide price listed by estate agents could be a single figure eg: £275,000 or a range – say £270,000 to £280,000. It’s based on the minimum price the seller hopes to get and the estate agent’s knowledge of the local area and property market, plus the condition of the property being sold.
Sometimes, an estate agent will suggest a fairly low guide price to drum up interest in a property, increase viewings, entice bids and hopefully attract a quick sale.
When an ordinary property listing has a guide price, it sometimes – but not always – means that it has significant flaws. You tend to see it used for doer-uppers, rather than shiny new-builds.
What’s the difference between a guide price and an asking price?
The asking price is the price the seller puts their home on the market for.
Although buyers are free to make offers lower than the asking price, it generally indicates that the seller is not willing to accept much less. But sellers need to be aware that the asking price isn't a guarantee that is what they will be offered.
A guide price is, as the name suggests, more of a guide or indication of what the seller wants, so you can expect a little more wriggle room when it comes to price negotiations.
A guide price may be used more often when it's a seller's market to push potential buyers to the top end. It may be used where sellers are hoping for multiple offers and want to maximise what they get.
Buyers tend to prefer asking prices as it sets a clearer value when they are considering making an offer.
What other jargon do estate agents use?
Other lingo you might see in property listings includes:
OIRO: stands for ‘offers in the region of’ and, in general, it means that the seller is willing to negotiate a little
OIEO: stands for ‘offers in excess of’ and means that the seller isn’t willing to accept less than the asking price
OMV: means 'open market value' – a property’s likely value in an open and balanced market
POA: means ‘price on application’ and is a term you might see if you’re looking at the higher end of the housing market.
How to interpret guide prices
The term ’guide price’ doesn’t always make it easy for you as a buyer, as you won’t know exactly how much to offer.
Ultimately, when it comes to ordinary property listings, the guide price is a device used by estate agents. It doesn’t necessarily equate to the property’s worth and you don’t have to agree with it.
Check what similar houses have sold for in the area and how the guide price stacks up against them.
When the guide price is a range – say £400,000 to £450,000 – it’s probably worth starting your negotiations at the lower end of the scale.
How accurate are guide prices?
Generally, a guide price is just that – a guide. If you make a lower offer, the estate agent is legally bound to let the seller know.
The seller may still consider your offer, especially if you’re in a strong position, such as not being in a chain or being able to pay with cash.
The property might eventually sell for a lower figure than the guide price – or it might sell for more. The eventual sale price depends on lots of factors, the major one being how much someone is willing to pay in the current housing market.
Should I pay the guide price?
Ultimately, how much you pay for a property will depend on the market and how much someone else is prepared to pay.
If the guide price is the lowest figure the seller will take, you may find that lower offers are refused. If you’re not sure, it’s a good idea to sound out the estate agent to see how much the seller will accept.
That said, if you fall in love with a house, it’s worth making an offer even if you can’t quite stump up the guide price. After all, the worst the seller can say is no.
If the seller has overvalued their house and this is reflected in your agreed sale price, a mortgage lender may down value your mortgage offer. This can mean that your sums no longer add up.
How much lower than the guide price can I offer?
In general, it’s considered reasonable to offer 5 to 10% less than the guide price at the start of negotiations.
You could even drop your offer to 15% below the guide price if you feel that the property has been considerably overvalued or it’s been on the market for a long time.
It’s a good idea to start negotiations at a low price – but go too low and you risk deterring the sellers and putting an end to any potential negotiations down the line.
How do I decide on the guide price when selling my home?
To help you get an accurate picture of what your home is worth in the current property market, it’s a good idea to get valuations from several local estate agents. They can advise you on what to set as your asking price or guide price but, ultimately, it’s up to you to decide.
Read our guide for tips on selling your home.
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With over 10 years’ experience writing, editing and managing content, Emma has written and edited for some of Australia’s leading financial comparison brands, including Savings.com.au, Your Investment Property Magazine, and Your Mortgage.
Ele Clark is an award-winning editor who has held leadership roles at Which? and news-stand publications in London and Dubai. She’s appeared across the press and media, including BBC’s Panorama. With almost 20 years’ experience in personal finance, insurance and consumer journalism, she leads a talented team at Compare the Market, creating insightful, accessible content to help people make informed financial decisions.
Charlie is a senior commercial leader with close to a decade of experience across the UK’s leading personal-finance and comparison platforms. Before joining Compare the Market as Head of Commercial in 2024, he held senior commercial roles at TotallyMoney and MoneySuperMarket Group.
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