Every property put up for sale through the auction will be allocated a guide price. A guide price is either an exact value figure or an estimated price range. This figure represents the value of a property at the time of entering the auction process but can be adapted by the seller at any point until the day of the auction. A guide price represents the price at which bidding will begin. It also assists potential or interested buyers in deciding whether they should pursue the property at auction.
A reserve price is agreed upon by both the seller and the auctioneer before the actual auction takes place. The reserve price is essentially the price (minimum value) that the seller will accept at auction and therefore the property can not be sold for less than this reserve. The reserve price varies within the range of +10% and -10% of the guide price.
As from the name, the price sold is the price at which the property is finally sold for on auction day. The price sold is of course to the highest bidder always equal to or greater than the guide price. In some instances of course a seller may choose to undersell the property and leave a lower margin guide price for a fast sale.
There are many elements involved in determining a guide price. A guide price is essentially how much the seller wants for a property at auction. However, this does not mean how much they will receive. It is essentially a starting point or minimum threshold to kick start the auction. On the other hand, the reserve price is the minimum price the seller is willing to sell for (not disclosed with buyers).
Guide prices are as accurate as can be. On the other hand, a guide price should not be confused with the value of a property. Of course, your property's value will be considered in creating the guide price, but it is ultimately up to the seller. A guide price can be set low initially to gain attraction and then increased before auction day. It is also not to be confused with your reserve price.
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