Queries over the subject of auctioneers’ guidelines constantly comes up from readers of GAUK, and I felt I perhaps ought to re-address the subject.
Allsops, the largest property auctioneers in the country, put the subject as succinctly and clearly as everything else that is in their catalogue. They say ‘guide prices or guide price ranges are not necessarily figures at which a property will sell. They are only indicated to be an indication. The price achieved at auction may be more or less. The guide price list may be updated, so please contact us if you require updated lists. It is possible that the reserve price set for any lot may exceed the quoted guide price.’ You will see that they publish lists but do retain the ability to change them should they think it necessary.
In my own catalogue, I say ‘Guideline prices provide a range covering the vendor’s current expectation of selling price, and it is probable that the reserve may be fixed within that range. The figure may change during marketing prior to auction day, and the guide prices do not bind the vendor to a sale at any price in the range.’ The Auctioneers’ Guidance Notes, published by the Royal Institution of Chartered Surveyors, echo these statements.
It is not the practice of my firm to quote guideline prices in our brochure or in our advertising. Obviously, Allsops have the same approach. To be fair, there are other large firms of auctioneers, and smaller ones, that do publish their guide prices, both in their brochures and in their newspaper advertisements. I do not publish for two reasons. Firstly, the response from our adverts can be monitored by the number of calls we get indicating requests for specific guidelines for specific lots. Secondly, try though we might to get them right, quite often the marketing programme makes us realise that we have sometimes got our valuations wrong. I have bleated often enough in this column about how difficult it is to put oneself, a valuer, in the position of a hypothetical purchaser, when every single person has such different views on property (and everything else in the world). Nevertheless, I don’t hold a brief to protect or defend auctioneers who get their guide prices totally wrong, and I do think it is indefensible for an auctioneer to be so out of touch with the market that his guidelines prove to be disastrously wrong. Furthermore, I can see no defence whatsoever of an auctioneer who withdraws a property because it has not reached a reserve which was patently significantly higher than his bottom guideline.
I have commented before about the near-riot that was caused at one auction I visit. I hesitate to think how many people must have wasted their evenings at his auctions, expecting to buy a property close to the bottom guideline, when there was no prospect of buying it whatsoever because the reserve was much higher. Obviously, some auctioneers try their hardest to get guidelines close to the reserve at the bottom end and the price they hope to get at the top end. I can sympathize, however, with the GAUK reader who recently wrote in, commenting that he had been so misled by the guidelines that he never intended to go to an auction by a particular firm again. In the end, the auctioneer’s responsibility to his vendor is to maintain credibility, otherwise he will find he has no audience at the next auction.