A price that an item, object, or property is expected to be sold for.
What is a ‘Guide Price’?
When you’re looking at buying a home, occasionally you’ll see the terms “Guide Price,” “Asking Price,” “Offers in the Region of” or “Offers in Excess of.” Estate agents use these terms to give buyers an idea of what price the property will sell for.
How strict is the guide price?
While the guide price is a good reference, properties aren’t often sold for exactly their guide prices. The final sale price of a property depends on what offers a seller has received for the property. These offers can be higher or lower than the guide price or asking price.
It can be helpful to look at the guide price as a reference to start negotiation with the seller. You always have the option to make a lower offer on the property, but if the offer is too low, the seller will reject it.
How much under the guide price can I offer?
The success of an offer will always depend on the market and other competing offers, but most experts suggest making an offer 5-10% lower than the guide price. While some sellers may consider offers as much as 15% lower, other sellers may consider this a "cheeky offer," and you run the risk of being seen as rude.
Before making a lower offer, check to see how long the property has been on the market. If it's been for sale for longer than 90 days, agents and sellers may be more likely to consider lower offers.
What similar terms should I be aware of?
There are a few:
Asking Price—The price the seller wants to receive for their property.
Offers in the Region of (OIRO)—Gives you a middle ground from where you can start negotiating with the seller. OIRO suggests that the seller is flexible on price and may consider lower offers.
Offers in Excess of (OIEO)—Gives you the starting point for negotiation. OIEO suggests that the seller won’t consider lower offers at all.