The reserve price is the price at which the vendors are prepared to sell their property at auction.
The reserve price is a figure discussed in confidence between the auctioneer and the seller and is usually not made public.
It is usually the minimum or base price but this can sometimes be set quite high, which may result in the house staying on the market for longer.
Of course, setting a reserve price when your property goes to auction is not always a simple process.
It is the fine balancing act between ensuring the reserve is high enough to guarantee you a comfortable amount if reached and low enough that it will not be prohibitive to encouraging bidding on the day.
Remember, if your reserve price isn’t met then you are not obliged to sell. However, the bidders are also not obliged to buy.
If the reserve price has been set too high, it can be adjusted during the auction but this can slow down the momentum of an auction with the auctioneer is having to go back and forth to review the adjustments.« Back to Glossary Index