For many years, I’ve said the same thing… Guide prices should be viewed as a guide to the reserve price, not to the value of the property. Yet in today’s auction market, the gap between perception and reality is widening.
More auctioneers are now allowing vendors to influence, or even directly quote, the guide price. And as competition increases, guide prices can shift dramatically as auction day approaches, sometimes upwards to reflect higher interest, sometimes downward to stimulate it.
The result? Many buyers begin their analysis on the wrong footing.
Why Guide Prices Move
Guide prices were originally intended to reflect the minimum range within which the reserve is likely to sit, but there are two pressures changing that.
- Vendor-led pricing When a vendor participates in setting the guide, the number becomes a marketing tool as much as a pricing indicator.
- Late-stage adjustments As interest builds, or doesn’t, auctioneers may revise the guide to shape bidding momentum. This means a guide price on Day 1 can be very different from the guide price on Day 25.
For a buyer relying on guide prices as a proxy for value, this creates confusion and, more importantly, risk!
The Real Insight Comes From the Comparables Behind the Guide
A guide price without robust comparables is just a number.
What buyers really need to understand is:
1. The quality of the comparables used
Are the comparables based on:
- True like-for-like stock?
- Forced-sale transactions?
- Unusual conditions or one-off anomalies?
- Postcode averages (which are often meaningless)?
Good comparables narrow uncertainty. Weak comparables magnify it.
2. The source of the data
At EIG, we analyse every auction lot and track historical results across all UK auctioneers. This matters because:
- For some auctioneers 1 in 3 properties going to auction have been to auction before. (These lots are identifiable on our website) If you don’t know that, you’re blind to the vendor’s history and motivation.
- Previous withdrawals, unsold lots, or failed exchanges reveal more about achievable value than any guide price ever will.
- Historic sale prices, unsold attempts, and reserve-related behaviour give you a much clearer sense of where a lot should sell, not just where it’s being guided.
Guide Prices Are Not the Problem. Assumptions Are.
“Assumptions are the Mother of all cock ups.”
A guide price is simply a communication tool. The issue is when buyers assume it’s a valuation tool.
When you treat a guide price as a guide to the reserve, not a guide to the value, you protect yourself.
When you combine that with high-quality comparables and historic auction performance data, you give yourself a competitive advantage that most bidders don't have.
A Better Way to Use Guide Prices
Before analysing any lot, ask three questions:
- Is the guide price vendor-influenced? (If so, expect volatility.)
- How has the guide price changed since listing? (Movement tells you more than the number itself.)
- What does the auction history of the property show? (Remember - 1 in 3 lots have been offered before.)
This is your real foundation, not the headline guide.
Final Thought
The auction market offers unparalleled transparency, but only when you look beyond the surface.
Guide prices may shift. Vendor motivations may change.
But data doesn’t lie, and buyers who understand the story behind the numbers make better decisions, pay the right price, and reduce their risk.
If you want to know more about how EIG tracks guide prices, reserves, vendor behaviour, and comparable integrity, feel free to connect with me or send a message.
