BMV Property Deals Explained
Bargain Off-Market BMV Property Deals For Sale
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What are BMV Property Deals?
BMV stands for Below Market Value. So a BMV property deal is a property deal where the property can be purchased at a discount to its current market value.
You may well be wondering how this can be possible; 1) Why would someone be willing to sell a property at a price below its market value? and 2) Isn’t the price the property sells for the same as its market value?
So why would someone sell a property Below Market Value (BMV)?
The answer is that the property deals that we market are discounted and are offered at a purchase price below their market value because the vendors are motivated to sell quickly. For these vendors, speed of sale and deal completion is far more important than the sale price. For example, the vendor may need to urgently sell in order to relocate, to release funds for a business opportunity, or to purchase a dream home that will otherwise go to another buyer. If you think about it, there is a long list of very good reasons why someone might be motivated to let a property go for a low price in order to sell it quickly. For these vendors we offer an extremely quick sales solution by giving them direct access to our nation-wide database of investor buyers that are willing and able to complete the transaction quickly without complication.
Isn’t the price the property sells for the same as its market value?
Well, it depends; To answer this, first we need to understand the definition of Market Value. Market Value is the most commonly used basis of valuation and it is described by The Royal Institution of Chartered Surveyors (RICS) and the International Valuation Standards Council (IVSC) as follows:
” Market Value (MV) is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”
- Market Value is more fully defined in The RICS Valuation Standards (the ‘Red Book’).
So we can see from the above definition that in a normal sale situation, typically through a hight street estate agent, where the property has been marketed properly for a period of time to a wide audience and neither buyer or seller is under any compulsion then the price the property eventually sells for is the same as its Market Value.
However, in the transactions we deal with the marketing of the property has typically been limited to a smaller specific audience (off-market) and the vendor has some degree of compulsion (is motivated) to sell quickly. So in this case then the definition of Market Value is not met and the sale price agreed may well be below the Market Value.
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