A Below Market Value (BMV) property is one which is on sale for less than similar properties in the same location. In other words, it is a property which appears, at...
A Below Market Value (BMV) property is one which is on sale for less than similar properties in the same location. In other words, it is a property which appears, at first glance, to be a bargain – and often it is.
At other times, there may be a more sinister reason for a quick sale – such as costly subsidence or potential dry rot – which is why it’s always essential to have a decent survey carried out.
Of course house prices are also subject to the state of the property market at that time i.e. whether or not it’s a ‘buyers’ or ‘sellers’ market, but on the whole comparison with similar properties is a good rule of thumb.
There are a number of reasons why you’d find a property priced for less than the market value, such as:
- The property has been repossessed because the owners didn’t keep up with mortgage payments. The bank just want a quick sale to recoup some of their money;
- The owners are having financial difficulties and can’t afford to market their property on the open-market. They need the money now;
- The owner is moving abroad or relocating to another job and wants to sell ASAP in order to buy something else;
- The property needs a lot done to it – perhaps even major structural work – and the current owner has neither the inclination, money or time. These are what would be described as refurb or renovation properties.
- Check what price other similar homes in the same area have sold for in recent months;
- Get in a professional surveyor to undertake an evaluation report – try and find someone local who will have knowledge of the market’s history and how much property typically sells for there. Having said that, typically surveyors will give a valuation based on what other similar properties are selling for (i.e. the market value of the property);
- Do a bit of acting by calling round some estate agents and posing as a buyer initially and then a seller.
There may be a price discrepancy on whether the agent thinks you’re buying or selling…
One of the best places to find BMV properties is at auction – but you’ll be bidding against other property investors so there’ll be competition. It’s also a good idea to make sure you pick up plenty of ‘auction etiquette’ and property research before bidding. That’s because once the hammer goes down there’s no going back.
Another means of getting a bargain property is to build up a special relationship with a local estate agent, who can tip you off about refurb properties or sellers looking for a very quick sale.
A property which has been on the market for a long time i.e. more than six months to a year could potentially turn into a BMV opportunity. That’s because the owner may be so desperate to sell that they’re willing to drop the price. This is where haggling skills come to the fore…
Generate leads on your own by advertising locally for properties in an area you’d like to focus on. That means putting a notice in the local paper, local newsagents, online websites etc. and getting motivated home owners to come to you.
We have a wide range of BMV properties available through our Network. Browse deals now.
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