I’m hearing a lot at the moment about people wanting to purchase below market value properties. Of course, everybody would want to buy something under market value, however here are some facts that may make your view of these so-called properties change.
Property tends to act like water. What I mean by this is that properties will find their own level..
Example.
If a property goes onto the market at a very attractive price… We will be inundated with enquiries both by email and phone, will book dozens of viewings then potentially take the property to best and final offers… maybe exceeding the asking price.
However if a property is too much money then we get limited enquiries and viewing requests. As they say the proof of the pudding is in the eating!
So, how do these companies present themselves to offer properties under market value? They will insist that it is because they have some special deal with repossession companies & mortgage lenders. However you should consider that even mortgage lenders try to ensure they get the best price for a repossessed property by advertising an agreed price to entice final interest in the local press.
So how do they do it? My opinion is that they don’t… because these properties have not been marketed in the open property market there is no reaction to speak of, therefore you are buying blind and often in an area you do not know.
What they can provide you with is a raft of comparable evidence that shows this property is marketed at a reasonable price… but is it really?
This evidence can be swayed dramatically, so you think you have bought a property with refurbishment profit potential when in fact you have bought something that will only gain capital growth.
Always remember, that they have to make a profit too!
If you’re interested in buying a project and would like some advice on what to expect and how to do it, then give us a call on 01603 432000.
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