Below market and repossessed properties can provide good opportunities for real estate investors and property buyers. In both cases, these types of property deals can allow a buyer to purchase real estate for less than its current market value. Unfortunately, many people do not know how to buy repossessed property so that they can take advantage of these money saving opportunities.
First, it is important to understand why property is made available at less than the market value. In these cases, the speed of the sale is deemed more important than high sale prices and profits. There are numerous reasons why a person might need to sell a property quickly, such as to make funds available for other investments, or to purchase a different property while it is still available.
It is also important to understand what “market value” actually means. Essentially, it is the sum for which a property would generally sell, given the usual marketing processes. This “usual marketing process” generally entails the property being advertised to a wide audience for an extended period of time.
In the case of below market value property, commonly referred to as BMV property, the marketing efforts are generally limited to a limited, smaller audience, often in an off-market scenario. The timeline by which the property is offered for sale is shortened, due to the desire to sell quickly. In this type of situation, it is common to see real estate sold for less than its usual market value.
So, where does one find BMV property deals? In many cases, it is easier than one may think. However, it is important to know what to look for, and where to look. The goal is to locate highly motivated sellers, who need to sell real estate below its market value, instead of sellers who just want to sell their property. In some cases, a property may have been on the market for a long time, without selling. Since a property that is not selling continues to cost the owner money, sometimes they are willing to sell for less than the standard market value, just to eliminate the ongoing costs of the property. Properties which have recently experienced a big price reduction are other good options. If a property does not seem to be generating much public interest or many viewings, this can also indicate a good opportunity to buy it below market value. Properties which have been repossessed are also good buying opportunities, due to the fact that there is usually a desire to sell them quickly.
There are many advantages to buying property in auctions. When a property is sold at auction, there is generally a good degree of certainty that the property will be sold on a specific day. This can greatly speed up the process of acquiring property. Repossessed properties sold at auction often have a low reserve price, due to the desire to sell them quickly so that the funds can be recouped. As a result, these properties can often be purchased at auction for well below their market value. Although these properties often require some refurbishing, they are frequently excellent real estate deals.
