Two prices you will encounter at every property auction
When looking at a property auction listing for the first time, it is natural to think that the displayed price is the answer. But in reality every auction has two different prices, and confusing them means making decisions based on incomplete information.
The guide price is a public indicative value provided by the auction organiser or seller. It shows an approximate expectation and is designed to attract interest. The guide price is not a promise: it is not the amount the property will actually sell for, and it is not the minimum acceptable threshold.
The reserve price is the secret minimum set by the seller. If no bid at the auction reaches this threshold, the property simply remains unsold, even if there were active participants. The reserve price is the true reference point from which the seller agrees to conclude a deal.
Why is the reserve price secret?
Many people find it illogical: why would a seller hide the minimum? The answer is simple — psychological strategy. If all participants knew the exact reserve price, they would only bid slightly above it, and the price would never rise higher. The secrecy principle creates genuine competition between participants and achieves a higher final price.
On Lithuanian property auction platforms — both e-aukcionai.lt (notary auctions) and Turto bankas turtas.lt — the reserve price is not disclosed in the listing. The buyer sees only the guide price or the starting bid. The reserve threshold only becomes known when the auction result is confirmed or when it is announced that the property remained unsold.
Is the guide price always lower than the reserve?
Although this is often the case, it is not a strict rule. The guide price is sometimes set slightly below the reserve to attract more participants and create momentum. But it can also be close to the reserve, or in rare cases even higher if the seller is optimistic about the market.
Practical conclusion: never rely solely on the guide price as a final figure. It is only an invitation to participate — not the true sale value. The more you research comparable property market prices before the auction, the better you can estimate where the reserve threshold is likely to be.
How to use both prices in your strategy
Knowing about these two prices should directly change how you select and participate in auctions:
- Before the auction — study past transactions for similar properties in the area. If guide prices are regularly exceeded by 20–30%, build that buffer into your budget.
- Set your limit independently of the guide price — your maximum must be based on market analysis and your financial capacity, not just what the listing states.
- Do not be surprised during the auction — if your bid was the highest but the property still went unsold, it means you did not reach the reserve price. This is normal and does not mean you made a mistake.
- Analyse auctions that did not complete — they provide valuable information about where the reserve threshold is likely to be for a given type of property.
Ultimately, remember: an auction is not a race to win at any cost. It is a process in which the winner is the one who bought the property at their own price — not a higher one than planned.