Singing Pig

Jonathon,

I have a hypothetical question for you: suppose the only buyers around were BMV buyers...

What would happen to the market?

Answer, if properties were getting sold BELOW market, then the market price would get driven lower, right? Since the rash of deals at lower levels, would establish a new LOWER MARKET VALUE.  And then what, the next round of purchases would come lower still, and so on.  That more-or-less is what is driving the market down.  And believe me, it is destroying the confidence of banks too

Hi there James,

 I understand what you are saying; however, I would have to challenge your conclusion. Though the current market conditions have many contributing factors -- the fragile state of the economy to name one -- I'm not sure you can blame BMV. From what I have seen BMV purchases occur because a person knowingly sells at a discounted rate due to personal circumstances. The premise that 1. buying below market value would then entail 2. A driving down of the market; does not logically follow. Surely most people do NOT sell BMV; that is what makes finding BMV purchases so challenging. This is reinforced by the fact that most buyers do not even know about BMV. Though property investment is common place, attacking a sector for a markets downfall is not viable -- surely we should be looking further a field. Looking back at market crashes someone always gets blamed; however, it has almost never been the right people.  

I don't have time to discuss banks; however, I'm sure you will have something to say to this post. Thanks for your input; I have ordered the book that you advise.

Regards,

Jonathan.

i think James has a very valid point re

 

"The premise that

 

1. buying below market value would then entail

 

2. A driving down of the market; does not logically follow. ""

 

the first thing a BMV trader researches  -  when looking to buy a property  -   is the Sold Prices in the street  ALL prices are listed there  - "normal" sales, BMV, Auction, repos etc etc.  - to the LR it does not matter HOW the house was sold - merely what the price was.  So, BMV sales will be one factor in "averaging" sales over a past period in order to come to a concensus as to what the current MV actually is  (rather than what an EA would like it do be).

 

The more BMV sales in a street, the lower the average sales price will become  -  basic maths

I agree with Clottie & James,but would go even further; 'real' BMV purchases are extremely rare. A property sell for what someone is prepared to pay for it, pure & simple, and that is its' market value at that time.  

I would like to thank you all for your advice. I have decided that property is to volatile in the UK at the moment, so instead I am going to concentrate my efforts on Spain, Turkey and Asia in the hope of securing a more financially stable future. However, I am still looking to gain as much knowledge as possible, so please keep posting!

Regards,

Jonathan.

hello jonathan -  wow !!!  that was a quick "lets give up on uk !!!"

 

we were all playing devils advocate with you - pointing out some of the challenges facing you if you join the uk property business  ...... 

 

my concern now is that , at least with the uk market, you can do endless research easily, locally, FOR FREE, and you know which sources of information are reliable and which are not  -  HOW are you going to be able to know WHO is scamming you from half way round the world ?????? 

Yeah, I'm not giving up on the UK; however, I have more experience of the foreign markets. I'm possibly moving to Spain next year and believe it wise to focus my attention on the Spanish market. However, I am by no means giving up on the UK market; I have been watching it develop for years and regret not making my move sooner. My ownership of one property is disappointing; I could have achieved more. However, I live and learn.

 

I'm hoping that, on the completion of my doctorate, I'll have more money and time to invest in this enterprise.