Finding A Property At Below Market Value
Everyone wants to find a property that they can buy for less than it’s worth. But how? Well, there are a number of ways to get a good deal, and ultimately it comes down to perseverance and expertise. You’ve got to know where to look, and be willing to look for quite some time. But if you are, then you can find some great deals.
A caveat; it’s important to know the value of properties in the first place before you can find a property which is BMV (below market value). The value of a property is not the price that an estate agent has put on it. In fact estate agents often win business by overvaluing property. The actual value of a property is far more esoteric, and, put simply, it is how much a buyer is willing to pay for it. But that presumes that all the buyers who might want the property have had the opportunity to see it- which often isn’t the case. This is where you can make money. You can get a rough idea of what properties are worth by looking at the previous sold values online. Then you can find poorly marketed properties which aren’t being exposed to the market properly.
Poorly marketed properties are a great target if you’re looking to find a BMV property. The vast majority of UK househunters today do their househunting online, through portals like Rightmove and Zoopla. But incredibly some estate agents still aren’t clued into the marketing value of these websites. These agents are almost always ‘one off’ agencies, not part of a chain. They are, frankly, not very good at their job. But this creates opportunity. You can find these agents online- one way to find them is to search ‘estate agents in X (your target area) and then cross reference the results with the estate agents listed on the main property portals for that area. The ones who aren’t listed on the main portals are the ones you should be interested in. Their properties wont have got any where near as many views as they would’ve done if they’d have been properly marketed, so it’s likely that the property will sell for less than it would have done with a better agent.
Another way properties are poorly marketed is when they’ve had their prices reduced many times. If they were overpriced to begin with then they will have put off the first waves of potential buyers who were looking around. Or the property might have been reasonably priced and then the owner suddenly needs to sell. Either way, reduced prices should be a red flag to you that the property could be bought cheaply.
But that isn’t the end of it. Finding a bad agent or a property that has been reduced in price doesn’t mean you instantly have a bargain. Rather, you have to look at the prices similar properties have sold for recently, and then offer below them. Be prepared for rejection- it’s not easy to get a bargain. But if you persist, targeting the above properties, you will find a bargain.