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What’s a guide price when buying a house?

You’ll come across plenty of confusing phrases when you’re buying a house. Guide price, for example – what does it mean? And how does it differ from the asking price?

We look at the meaning behind guide price and other estate agent jargon, so you can navigate the UK property market with confidence.

You’ll come across plenty of confusing phrases when you’re buying a house. Guide price, for example – what does it mean? And how does it differ from the asking price?

We look at the meaning behind guide price and other estate agent jargon, so you can navigate the UK property market with confidence.

Written by
Sajni Shah
Consumer expert on money and utilities
Last Updated
20 DECEMBER 2022
5 min read
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What does a guide price mean?

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.

Depending on where you’re searching for your new home, the term ‘guide price’ could have slightly different meanings and uses. In property auctions, bidding usually begins at the guide price. But for savvy high-street estate agents, a temptingly low guide price is one way to generate more interest in a property.

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. Under the Advertising Standards Authority (ASA) guidelines, the guide price must be within 10% of the seller’s reserve price.

The guide price can be a single figure or it can be a range. The reserve price isn’t typically disclosed before or during an auction, 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 or a range. 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.

Sometimes an estate agent will suggest a fairly low guide price to drum up interest in a property, increase viewings 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 that 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.

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.

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.
  • POA means ‘price on application’ and is a term you might see if you’re looking at the higher end of the housing market. 

Read our property search tips.

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.

Sometimes you’ll see the guide price as a range – say £400,000 to £450,000 – in which case 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.

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…

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 offending the sellers and putting an end to any potential negotiations down the line.

Read our guide on how to make an offer on a house.

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.

Sajni Shah - Consumer expert on utilities and money

Sajni is passionate about building products, allowing Compare the Market to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.

Learn more about Sajni

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