White Knight Associates explains what below Market value properties are.

In its’ simplest terms, BMV or Below Market Value is an abbreviation. BMV properties are residential properties that are available below their market value. This is normally because the owners are faced with some kind of financial difficulty and want to or need to dispose of their property quickly and without going through a protracted marketing and sales process. The precursor to this is quite often the threat of repossession.

White Knight Associates explains how to value a property.

The guidance from the Royal Institute for Chartered Surveyors on how a surveyor should value residential property is contained in Appendix 5.1 of the Royal Institute for Chartered Surveyors Appraisal and Valuation Standards (Red Book).  The basis for the valuation of a residential investment property is normally its’ market value.  Market value is defined in the Chartered Surveyors hand book as:

 ‘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.’

Therefore if a property has been properly marketed and then a sale agreed, whilst the landlord may consider that they have a bargain and a BMV property because the property is sold at less then similar property sold for previously. For instance an investor buys a property for £180,000. A year previously a similar property sold for £200,000. The investor might consider that they have obtained the property at 10% BMV. This is not the case under the guidance on valuation standards from the chartered institute of surveyors, the investor has actually just paid the market price.

White Knight Associates explains when BMV properties exist? 

Where a BMV property may exist is if the property was not fully marketed first. This situation occurs where buyers are able to access so called ‘distressed or motivated sellers’ who cannot afford or want to go through the normal marketing and sales exercise.  

Source: property Haw

Posted by: White Knight Associates

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