Guide Price and Reserve Price for Your Auction Commercial Property

When it comes to deciding on the price that you want to sell your commercial property for at auction, there are two price types; the reserve price and the guide price. Read on to learn about what the reserve and guide price are and how they are set.

Setting the Guide and Reserve Price When Selling a Commercial Property by Auction

When you approach an auctioneer to act on your behalf, they will suggest a reserve price and a guide price for your property based on their expertise and knowledge of current market conditions. Your agreement will be required in both cases, but what is the difference between the two?


Reserve Price

Put simply, the reserve price is the minimum bid you will be prepared to accept for your commercial property at auction. Auctioneers are skilled at extracting bids from the room but sometimes it’s inevitable that bidding will not reach the agreed reserve price and in these circumstances the auctioneer will not sell the lot.

The reserve price is known only to the seller and the auctioneer and will never be divulged to any interested parties. The auctioneer will offer you advice as to what this should be but you don’t have to accept the figure proposed. However, if you set your reserve price unrealistically high and the lot fails to sell, remember you will still be liable for the auction entry fee and the cost of going through the process again.

Sometimes a property is marketed without reserve. These types of properties generate substantial interest from purchasers as the possibility of a bargain price is tempting. These lots will often be sold on behalf of a deceased estate or the Court of Protection, where an individual may not have the mental capacity to deal with their own affairs for example.


Guide Price

As opposed to the reserve price, the guide price is published in the catalogue and is often described as simply an indication of the price the lot is expected to sell for. However it is much more than this and setting the level of the guide price is an area where the expertise of the auctioneer is invaluable.

The auctioneer will suggest a guide price that is specifically designed to encourage competitive bidding and realise the best price for your property at auction. Depending on the level of interest your property generates during the marketing period, the auctioneer may suggest changes to the guide price right up to auction day to reflect this.



Registering with MOVEHUT is easy, simply visit out sign up page.