How PaTMa’s Tools Can Help You Find BMV Property
Every property investor would like to find great property deals at below market value. Here we will look at what below market value property, or BMV property, is and at tactics for finding these types of property deals successfully.
What exactly is below market value property?
The best way to understand the concept of BMV property is to understand what it isn’t.
Say a vendor who wishes to sell their property asks an estate agent or surveyor what they believe their property is worth. Market value is the amount they consider a willing buyer will pay for the property when it is offered on the open market. Anything below that amount is below market value.
Market value may not necessarily be the same as market price or asking price. The seller may decide to set the asking price higher in expectation of achieving a lower offer that is at market value.
There is a theory that suggests BMV property does not actually exist at all! Say, for example, a valuer advises that a property’s market value is £300,000. But the best offer from a willing buyer, which is accepted by the seller, is £270,000. Then that £270,000 may appear to be below market value but it is not – because strictly it is the market value.
Either way you can see the attraction of these kinds of property deals. They mean that an investor can, by buying below market value, potentially make an instant capital gain, flip for profit or benefit from enhanced rental yields.
Ways to buy below market value property
Here are some of the ways you might be able to source property deals at below market value:
Using estate agents. The essential tactic here is to maintain good and regular communication with local agents. This way, if they have a seller who is willing to sell their property at below market value and/or they know you are interested in these kinds of property deals, they might tell you first.
Using property sourcing companies. There are a number of companies who offer property for sale at what they suggest is below market value. As with all BMV property, however, you need to do careful research here. If they are openly advertising a property at what they claim is below market value but have not yet found a willing buyer then that price is possibly not below market value!
Buying at property auctions. Auctions are frequently thought of as a way to buy below market value. Auctioneers may set guide prices and reserve prices below what is considered to be market value. Again, however, this is open to debate as the best price offered in the auction room on auction day could be said to be market value.
Direct to owner marketing. This is usually how the ‘houses bought for cash’ and ‘express house buying’ companies work. Also they generally aim their buying at what are known as motivated sellers or distressed sellers. These may be people who need or want money quickly, or perhaps who have a property that is difficult to sell on the open market such as a property in very poor condition. The price they offer will normally be below market value.
There is nothing to stop private investors doing much the same. You could advertise ‘property wanted for cash’ offline or online. Or you could do leaflet drops or even mailshots and target the type of potential sellers and properties you’d like to buy. For example, empty property or derelict/semi-derelict property.
How PaTMa tools can help you find BMV property more easily
To find genuine BMV property deals good advice is that you need to know your market and do your research. So if, for example, you see a property listed and know similar properties have sold for more – or spot a price reduction – you will know that could possibly be a below market value property.
First, use PaTMa’s free browser extension. PaTMa’s browser extension enhances the property listings on Rightmove plus Zoopla and PrimeLocation. When you view any property it shows valuable quick profit calculations including ROI and yield plus the price history, ie. when first seen and any price reductions.
Once you’ve found a property you can use PaTMa’s Property Prospector to collect, analyse and track your prospective purchases.
Now the new property listing search feature in Prospector makes finding potentially below market value property deals even easier.
Not only can you search for properties using this feature, but you can tailor your search to find exactly what you want. Not just for the area, type of property and price range you are interested in but for time on market, price reductions and reduction history too.
Say, for example, you want to find properties reduced today so you can get in and buy them first then the property listing search will help you find them. Or if you want to find properties last reduced months ago (where sellers may be open to an even lower offer) it will help you find them. You can sort by size of reduction. You can also look for properties that have been relisted, perhaps at a new lower price.
PaTMa’s tools also enable you to spot below market value property deals by doing comparisons. Say, for example, a search shows that a house priced at £300,000 in your preferred area has become unavailable, perhaps because it has sold. But an almost identical house nearby is available at £250,000. That could potentially reveal a below market value property.
While it is fair to say that the concept of below market value property is not that simple PaTMa’s tools can make spotting possible BMV property deals easier and quicker than ever before.