Below Market Value (BMV) properties are properties available for sale at a price below their actual market value. There are many reasons for why a seller might price their property for less than it is worth. Common reasons include:
- Financial difficulties
- Seller facing repossession
There are many more reasons why properties may be priced BMV, however, a property that can be bought at BMV doesn’t necessarily scream out that the seller would be willing to accept an offer BMV.
We’ve listed 5 signs that may suggest you can get a property BMV below:
1. The property has been on the market for a while
If a property has been on the market for a long period of time there is a chance that the buyer has become a desperate seller. Due to the uncertainty surrounding Brexit and high prices the property market has experienced a slowdown in sales and a drop-in prices. Low demand is always a tell-tale sign that you can put in a BMV offer.
2. Seller is keen for a buyer not in a chain
A seller could have various reasons for why they do not wish to have a seller that is part of a chain.
If you are in a chain yourself, you may find the seller unwilling to accept your offer because of the risk associated with a chain. Alternatively, a seller may be willing to accept a lower offer if you are chain free as there is less risk of the sale falling through or stalling.
3. Work needs to be done to the property
A property survey can unveil if work needs to be done to a property and could provide you with an opportunity for you to take the cost of this work away from the asking price.
A property survey is not compulsory; however, a survey can help you avoid expensive surprises/costs after you move in; such as hidden damp, or unexpected rewiring. Depending on the seriousness of any defects found and the cost of repair work, you may be able to re-negotiate the purchase price.
NB. It is important that you have an idea of how much the additional work will cost. You don’t want to negotiate £3000 off because of damp and then you find out after buying that it will cost you £10,000 to fix!
4. The property has been repossessed.
A repossessed property is a home that has been seized by a lender due to the previous owner not meeting their monthly mortgage payments.
Once a lender has reclaimed the property, they will seek to sell the property as soon as possible. Lenders tend to price repossessed properties slightly cheaper so they can recoup the money loaned to the previous owner and any other costs incurred as soon as possible. (Lenders tend to sell repossessed properties via auctions or estate agents.)
NB. Properties that have been repossessed may need some work done to them.
5. The property is empty
An empty house cannot and does not generate any income. Costs that still need to be paid when a house is empty include:
- Council tax
- General maintenance
Any owner incurring these costs on a regular basis is likely to want to get rid of their property quickly, so this could be another sign that you can put in a cheeky offer!
None of the above signs mean that you will definitely get a property BMV; however, it does mean that the potential is there for you to put in a cheeky offer. As mentioned above; the property market is currently very slow so now may just be a great time for you to get a property cheaper than you normally would be able to.
Tip: Just because a property is on the market for £300,000 doesn’t mean you have to offer £300,000! Don’t be scared to put in an offer several thousands BMV. If you don’t ask you don’t get!
*This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.