Definition
A Guide Price is an estimated price or price range provided by a real estate agent to give potential buyers an indication of what a property may sell for. In the New South Wales property market, guide prices are commonly used in property listings and auction campaigns to help buyers understand the expected value of a property before making an offer or participating in an auction.
Guide prices are based on recent comparable sales, market conditions, and professional appraisal by the agent. While the guide price provides an indication of value, it is not a guaranteed sale price and the final purchase price may be higher or lower depending on buyer demand and negotiation outcomes.
Where Guide Prices Are Used
Guide prices are widely used in property marketing and sales across New South Wales to help buyers understand the expected price range for a property.
Common situations where guide prices appear include:
Auction Campaigns
Guide prices are frequently used when a property is scheduled for auction, giving buyers an indication of the expected bidding range before auction day.
Online Property Listings
Real estate websites often display a guide price or price range alongside property listings to help buyers filter and compare properties.
Private Treaty Sales
Some agents use guide prices during negotiations to provide buyers with an approximate price expectation before formal offers are made.
Buyer Enquiries and Inspections
Agents may provide a guide price when responding to buyer enquiries or during property inspections.
Legal Requirements for Guide Prices in NSW
Real estate agents in New South Wales must comply with strict underquoting laws when advertising guide prices for property sales.
Key requirements include:
Market Evidence
The guide price must be supported by comparable property sales and recent market data.
Reasonable Price Range
If a price range is provided, the higher figure must not exceed 10% above the lower figure.
Updates During the Campaign
If new information suggests the property is likely to sell for more than the advertised guide price, the agent must update the guide price to reflect current market expectations.
These rules are designed to ensure that buyers receive accurate pricing information and are not misled during the property search process.
Guide Price vs Reserve Price
The guide price should not be confused with the reserve price used in auctions.
A guide price is an estimate used for marketing purposes to inform buyers about the expected value of the property.
A reserve price, on the other hand, is the confidential minimum amount the seller is willing to accept at auction. This price is usually known only by the seller and the auctioneer and may differ from the advertised guide price.
How Guide Prices Are Interpreted by Buyers
Buyers often use the guide price as a starting point when deciding whether to inspect a property or participate in the sales process.
However, in competitive markets such as Sydney, properties may ultimately sell above the guide price due to strong buyer demand or competitive auction bidding. For this reason, buyers often review recent comparable sales and market trends in addition to the advertised guide price when determining how much they are prepared to offer.