How a house is priced affects the interest it gets and the speed of its sale.
As part of this, listings might show either a ‘guide price’ or an ‘asking price’.
These are similar, but not the same.
What is a guide price?
A guide price is designed to guide the buyer, as the name suggests.
It indicates the seller’s mindset and the price region in which they are willing to accept offers.
A guide price is usually a minimum figure. They won’t sell for less than this.
What is an asking price?
An asking price is what the seller hopes to sell a house for. It’s their ‘aspirational’ figure.
This is the most common type of price used by people selling their homes.
It’s the number you’ll typically see on Rightmove and in local advertisements.
Often, a house will sell for less than the asking price. But if the market’s particularly busy, it sometimes goes for more.
It’s different to selling price, which is simply the price the property eventually sells for.
What’s the difference between a guide price and asking price?
These two things are similar but not the same.
Guide price is the minimum offer that the seller will consider. On the other hand, an asking price is what the owner is hopeful of getting.
This subtle distinction is useful for both parties to be aware of when negotiating over price.
For example, sellers will regularly complete a deal for less than the asking price. But they’ll rarely do this for less than the guide price.
Who decides whether you use the guide price or the asking price?
This is usually a conversation between the estate agent and the seller.
The agent will make recommendations based on market conditions. But the seller almost always gets the final say.
Should I use guide price or asking price?
Asking price is more commonly used.
Guide price is useful if a seller unclear about the property’s exact value, which can happen when:
- Market conditions are inconsistent
- A property has very unique features (maybe it’s a period property)
- A property is sold at auction.
How do I know if the property I want is guide price or asking price?
This should be made clear to you as a buyer.
Look at their property listing online or in the advertisements you see. It should be stated explicitly.
If it isn’t, speak to the estate agent and ask them.
