When you see a property listed with a guide price like “$900,000 to $1,000,000,” it’s easy to assume that’s roughly what you’ll end up paying. But in reality, guide prices are often more about attracting attention than reflecting true market value.
In this blog, we’ll unpack why guide prices often differ from the final sale price—and how you can protect yourself from being caught off guard.
What Is a Guide Price and How Is It Different from the Asking Price?
A guide price is the estimate the agent or vendor publishes to suggest what the property might fetch under current market conditions.
It is important to recognise that:
- It’s not the seller’s minimum price and it doesn’t guarantee what you’ll pay.
- Agents base it on comparable recent sales in the area and current market sentiment, but it’s always a prediction not a promise
In short, it’s a starting point, not a commitment.
Why the Guide Price and Final Price Often Differ
Below we will explore the main reasons why the final sale price can be much higher than the initial guide.
1. Underquoting to Drive Interest and Bidding Wars
Some agents set guide prices lower than the actual sale price to attract more buyers and encourage competition. This is known as underquoting and can often lead to bidding wars and emotional overbidding.
Whilst underquoting is technically illegal in many places, enforcement is tricky and it still happens frequently.
2. Rapid Market Changes
Real estate markets can change fast. A guide set two or three weeks ago can quickly become outdated. In rising markets, properties often end up selling well above the original guide.
3. Emotional and Psychological Bidding
Auctions can create a highly charged atmosphere, where competition and the fear of missing out can lead to buyers to make more emotional decisions and exceed their intended budget. These emotional factors are rarely reflected in the original guide.
4. Vendor Expectations
Sellers may have their own aspirational price targets that go beyond what the agent suggests. These targets can influence the reserve price, which might be set just before or during the auction, often above the published guide.
Legal Price Ranges and Flexibility
In some states, guide prices or price ranges are allowed to vary within a certain percentage of the expected sale price. This offers buyers some clarity whilst still enabling the final sale price to legally exceed the lower end of the advertised range.
Tips for Navigating Guide Prices
- Research recent comparable sales in the area
- Assume the guide price may be lower than the final sale price
- Ask the agent clear questions such as:
- What price is the vendor realistically expecting?
- Have there been any offers above the guide price?
- Be ready to act quickly when the opportunity arises
- Decide on your maximum bid before auction day and stick to it
Could You Benefit from a Buyer’s Agent?
When guide prices are vague or misleading, Moove can make all the difference.
Here’s how we can help:
- Provides an accurate, data-drive property valuations cutting through the sales tactics
- Negotiates on your behalf with inside knowledge of agent strategies and auction dynamics
- Help you avoid overpaying by staying objective and focussed even in emotional or high-pressure situations
- Save you time by filtering listings, uncovering hidden issues and shortlisting only the most suitable properties
- Unlock access to off-market and pre-market opportunities through our network and proactive sourcing
- Sourcing you with expert guidance, due diligence and connections to trusted professionals like inspectors and conveyancers
With Moove’s tech-enabled, fixed-fee service, you get expert buyer advocacy that’s more accessible, transparent and effective
Why Guide Prices Are Not Enough
Guide prices are a standard part of the real estate process. They serve to initiate discussions but do not determine the final outcome.
Relying solely on the guide price to set your budget can lead to disappointment, missed opportunities or paying more than necessary.
Making Informed Decisions as a Buyer
- Don’t take guide prices at face value
- Take the time to research and ask informed questions
- Stay rational and set limits before you bid
- Most importantly, consider having an expert on your side
Moove Buyers Agents are here to help you buy with clarity, avoid overpaying and secure the right property and the right price.
