What should I be aware of with BMV properties?
Many investors and companies have set up businesses purely for sourcing and offering BMV properties to investors. One big thing to be mindful of with this is the fact that market value is only what someone will pay for a property, and a BMV discount is based on what someone perceives the current market value to be. Generally, what the property is currently on the market for with an agent is normally between 5-10% above what the property will actually sell for (true market value). many investors are caught out when buying BMV properties from agencies by not doing their own due diligence and verifying the true market value. Saying that even after doing your own due diligence from checking recent sales data from sources such as land registry, websites like Zoopla and local agent data, it is very difficult to accurately determine the true market value, but it should at least still give you a good market value indication. When buying BMV properties it is very important to determine why the property can be obtained at such a discount. There may be many genuine reasons, like vendor is facing repossession, going through divorce or moving overseas, but again due diligence is vitally important as you don’t want to unknowingly take on hidden problems like subsidence, rising damp etc.Below is a list of genuine reasons vendors may be willing to sell at BMV:
- They may be about to go through, or are going through Repossession
- They may be going through Separation or Divorce
- They may need to Relocate Quickly for work or personal reasons
- They may have Inherited a property
- They may have severe Financial Problems
- They may have suffered Broken Chain in previous sales
- They may be struggling to sell due to Property Needing Renovation
At Jones Property we offer BMV properties to our investor partners, and careful due diligence is carried out on every property, not only to determine true market value but also to determine any major building defects. By being so strict with our due diligence we are able to give piece of mind to our investor partners and keep our 100% good reputation.