Helps investors take advantage of below-asking price offers
Increasing competition and a greater willingness amongst sellers to accept below-asking price offers is opening up opportunities for property investors, but they must be quick to act, according to Approved Business Finance.
It says that recent figures show that the average landlord purchasing a property in July paid 88.7% of its original asking price and more significant discounts could also be at stake if investors have their finance in place.
Cash buyers will often have preference over a stronger offer, so purchasers who can demonstrate speed, certainty and the ability to complete could find themselves in a considerably stronger negotiating position, it says.
However, they often need bridging finance to cover the gap between available cash and the price required.
Below-market-value property purchases
Kelly Moody, senior property finance broker at Approved Business Finance, warned investors to be cautious, however, pointing out that not every lender approaches below-market-value (BMV) property purchases in the same way, with some maintaining very different criteria regarding how they assess the purchase price, property valuation and borrowing limits.
“Cash buyers naturally hold an advantage when sellers look for speed and certainty on below-market-value deals. However, property investors don’t necessarily need to have the full purchase price available in cash to compete,” she said.
“By utilising bridging finance, investors can unlock capital in days rather than months, matching the speed and certainty of a cash buyer to secure discounted properties before the opportunity slips away”
