Understanding Below Market Value (BMV) Property Transactions

Apex Bridging is the market’s leading experts in below-market-value investment purchases

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Navigating The Niche Of Below Market Value Purchasing

As the Bridging market’s leading experts in below-market-value Investment purchases, we have prepared some useful information below to help you navigate the successful placement and completion of your Below Market Value Purchase case.

All applications are subject to survey, and whilst we do not disclose the Purchase Price of the property to the Surveyor on instruction, there are some common reasons to look out for, as to why a Below Market Value survey might actually return a Valuation at Purchase Price rather than expected Market Value.

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House developers and customers shook hands

On Market Transaction

Is the marketing of the property freely available in the public domain (RightMove, Estate Agent website)? If we can see it, the surveyor can see it and it may colour their valuation of the property. In addition, a surveyor may call the estate agents to confirm the purchase price and understand how many viewings / offers the property had.

Auction Purchase

Although the client may think they are getting a bargain on the expected market value, Auction Houses record the purchase price in the public domain, creating a similar problem to the on-market transaction above.

This very commonly shapes a Surveyor’s valuation of a property once they see this, which they usually will.

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BMV Image

Lack Of Comparable Properties

Where did the client get their OMV from? Websites such as Zoopla, MousePrice and other online algorithm-based software can vary widely from a Surveyor’s estimate depending on the postcode.

When you submit a query to Apex, we will check out the comparables in the area, and feed this back to you, to either move forward with more confidence, or have a conversation with your client before they get too far into the process.

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Poor Market Strength

Are properties actually selling well in the postcode and local area? This could impact what a surveyor returns at the Survey stage. Again, right at the beginning of the process, when you send your enquiry to Apex, we will check out the market strength for the purchase and feed this back to you

The other thing to be mindful of when a Below Market Value Purchase falls across your desk is the reason for the bargain price.  Are the vendor and the buyer related?  Is this an Inter-family purchase?  This will rule out Apex, and a large number of lenders in the Bridging market as it will make the lend a Regulated Bridging Loan.

We Offer Loans of £75k – £1m, with up to 90% Max LTV and Funds Released within 7 Days

Distressed Sale

Is the vendor under serious financial pressure?

Could they be at risk of going bankrupt now or in the future? Under Bankruptcy Law, this could cause any transaction to be set aside up to 6 years in the future if it is deemed to be ‘offloading’ assets.

This will likely be an issue with most Bridging Lenders.

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01509 345 007

Contact Details

Address

HBB Bridging Loans Limited
T/A Apex Bridging Loans

1 The Cornerstone
Market Place
Kegworth
DE74 2EE
Company Number 08548882
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