Much of what is sold through property auctions are sold at below market value so buying at auction is still one of the best ways of picking up BMV property. But, all kinds of properties are bought and sold in this way and it isn’t uncommon for houses to be sold at over market value as well. It depends entirely on the motivation of the buyer.
Property Expert Series: Andy Thompson From SDL Auctions
- Part 1: Introducing Andy Thompson from SDL Auctions
- Part 2: What Steps Should I Take Before I Buy A Property At Auction?
- Part 3: How Do Property Auctions Work?
- Part 4: What Is A Reserve Price?
- Part 5: What Exactly Is In The Legal Pack?
- Part 6: Are Property Auctions Better For Buyers Or For Sellers?
- Part 7: An Introduction To Buying BMV Property At Auction
- Part 8: What Is Off The Wall Bidding?
- Part 9: Does It Matter Where I Sit?
- Part 10: What Are The Costs To Buyers And Sellers?
Below Market Value Property At Auction
Amy: When you are buying at auction or selling at auction, you could potentially be looking at BMV (below market value) property.
What kind of discounts could you be potentially looking at?
Andy: What you need to remember is, at an auction, any type of property could be sold.
It could be a beautiful five-bedroom detached. It could be a one-bedroom burnt out flat. It could be anything in between.
It might be tenanted, it might be vacant.
So there is no golden rule. And whilst a lot of property will sell below market value, some of them will go for more. There’s a lack of logic.
So, sometimes I’ll sell a property and I’ll be looking at it from an investment point of view and asking myself why the buyer has bought it for so much. Maybe it needs a spending on it, a lot of work doing, and the buyer has just bought it for its market value after this work has been done.
But we don’t know the circumstances of the buyers.
For example, I sold a house one recently to a lady, and she blew everyone out of the water, bidding high.
But it turned out that her dad had built the property. So you never know what extra value a house might have for somebody, at a personal level.
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