How to Set a Great Reserve Price
Setting the reserve is one of the most important decisions in an auction campaign, and it is also one of the most misunderstood. Get it right and you give buyers room to compete. Get it wrong and you either scare off interest or leave money on the table.
It takes more than one piece of information
A lot goes into setting a great reserve, and no single factor should carry the whole decision. Your agent should be weighing up several important inputs together.
Buyer feedback is one of the most valuable. What have the people who have actively inspected, and made moves indicating they genuinely intend to bid at auction, actually been saying? That feedback is worth far more than a guess, because it comes directly from the people who will be in the room on the day.
Recent comparable sales matter too, giving a grounded, evidence based sense of where similar properties have actually landed. So do the goals of the sellers themselves, what they need from the sale, and what other properties you are currently competing against in the market.
Finally, your agent's own opinion is an important factor. They are watching the campaign unfold in real time and bring genuine market experience to the number.
Weigh it all together
A great reserve considers all of this information together, buyer feedback, comparable sales, seller goals, competing stock, and agent insight, rather than relying on any single input in isolation.
Set an attractive number
Once all of that evidence is on the table, the goal is to set a number that is genuinely attractive to the market. Serious buyers want to deal with serious sellers. A reserve that reflects real evidence, rather than wishful thinking, signals to buyers that this is a campaign worth engaging with seriously.
Give the campaign time to speak
A well run auction campaign runs over roughly four weeks. That window exists so your agent can gather real buyer numbers and genuine feedback before that final figure is locked in, usually in the last week before auction.
The bottom line
A great reserve is not about picking the highest possible number. It is about weighing buyer feedback, comparable sales, your own goals, competing properties, and your agent's opinion together, then setting a figure serious buyers will respect.
If you would like help working through the numbers for your own campaign, the team at Axford Auctions is here to talk it through with you.