Would you buy a new car without researching the model and having a test drive? Would you get married by just seeing a picture of your potential partner? No, you wouldn’t so why are so many looking to buy property from an email which has a headline of “25% BMV “
Now I understand that people are busy and the internet has resulted in many major purchases being conducted online. But housing shouldn’t be one – you must visit the property and the area.
BMV or Below Market Value is a term used to tempt people into buying a property which is a bargain, for a finders fee. Many of these “offers” then get emailed to property investors with a time limit to apply, before “they all go”. This puts pressure on the buyer and the normal research they should do is ignored.
The vast majority of BMV is not realistic and if it truly is, has many implications for you as a buyer. There is a danger of the transaction being reversed up to five years from purchase and the purchaser will lose money.
If the seller is accepting a lower figure due to their financial position, a lender would class this as a distressed sale and the seller vulnerable. A BTL lender will not lend as they do want to be part of this transaction.
Also if a sourcing fee has been paid the majority of BTL lenders will not agree with any form of BTL mortgage for the purchase.
When you are spending thousands of your hard-earned money to buy a property, why do it so quickly off the back off an email without doing the research?
When buying a property look at the area, visit it during the day and at night, talk to the locals, find the crime figures, the number of rental properties in the area, potential demand and talk to all the local letting agents both national and independent.
Have a look at the surrounding properties as any pubs, takeaways, commercial units will impact on the number of lenders available to you.
Always have a plan B for both tenant type and if an HMO what alternative use it can have, to minimise any future risk. Always visit the property without exception.
From our perspective as responsible property finance advisers, we will not accept any BTL application if the client has not visited the property and been inside it.
We will also not put BMV property on bridging because the costs/risks of staying on a bridge far outweigh the possibilities of getting a long-term mortgage on the perceived true value.