JULY 2009
|
www.opp.org.uk
Project focus
•
Below market value deals |
49
potential buyers that the property
The BMV industry
is being offered at a true discounted
Distressed or motivated sales, discounted or
price.”
below market value (BMV) properties have INDUSTRINDUSTR
“Normally, non resident buyers can
become new buzz phrases, with specialist
borrow 80%, so they will need 30% agents and syndicates emerging to offer deals
(20% plus 10% closing costs),” explains direct or through networks of agents and
Carter. “Banks now lend on their own
introducers.
YY
valuation or the sales price - whichever
In Spain, which has over 1m unsold
is lower. Cash buyers can get better
homes according to the Instituto de Práctica
prices and avoid mortgage costs and
Empresarial, several agents have relaunched
as repossession specialists. UK-based agent
taxes.”
Azure Property International, in partnership
Sague observes that Spanish lenders
with agent Casacalida, is selling repossessed
are effectively ignoring discounts when
properties acquired by one of Spain’s biggest
it comes to establishing market value.
mortgage providers, CAM bank.
PEOPLEPEOPLE
“Banks are using the sales value as the
Over in Singapore, management
value of reference for the mortgage
services firm, Quantum Hotels and Resorts
and applying a much higher differential is approaching distressed developers to
to interest rates. Therefore, most convert existing, unsold condo projects into
current below market value buyers are
condo-hotels to make them more saleable,
people with a good amount of cash.”
while agent franchise RE/MAX launched its
scheme to train 7,500 US agents in distressed
Active buyers
and foreclosure sales at the end of May and
embarked on a national tour to promote these
Spanish, British, Russian, Dutch and
services. DESTINADESTINA
Scandinavian investors are among Liverpool lets | Assetz’ investors are looking for income producing stock at big discounts
Meanwhile, foreign investors have made
the most active. Parfait claims that
a beeline for London in the first half of the
many UK investors see this as a good market comes from a small pool. estate agents. The lack of finance also
year, with a weak pound combining with large
time to buy new builds because of English are still quite active but means that developers are becoming
discounts to offer a double saving. Property
TIONTION
the combination of low prices and everyone is bargain-hunting. The more creative and offering finance
investment specialist Assetz has been sourcing
good rents, while Sague says: “Dutch, Irish have reduced significantly as a packages to buyers, especially to first BMV deals for its UK investors for over a
Danish and Norwegians are incredibly buyer force and the Italians have also time buyers. “Developers are offering year, and presents seminars to its investor
active. They have the euro and their dropped, not due to the crisis, but gifted deposits,” says Carter. “And banks
community to promote discounts of around
economies are in better shape than mainly in a previous wave, pushed out are offering 100% finance in some
a third of UK and overseas property. Property
Germany or France.” by the English and Irish. The funds have cases to residents in Spain. This pushes
Frontiers, an agency specialising in sales to
Luis Teixeira da Silva, an International all but dried up for the moment. Mostly the market price down naturally.
international investors, recently promoted
Property Adviser, is sourcing deals
eight townhouses in a gated community
BUSINESSBUSINESS
in South London where the developer was
in the UK, Portugal, Spain and Cape Banks are offering 100% finance in some cases to residents in
offering a discount of £75,000 on the certified
Verde from private vendors, developers Spain. This pushes the market price down naturally. Remember
valuation – bringing the asking price down
and funds. “They are mostly deep that banks are banks, they do loan products and banking, they
to £300,000.
discounted deals, either from sellers are not real estate agents.
Heavy discounting (and fractional options)
who cannot complete or developers Darren Carter, Goldberg & Partners
have helped Spanish developer Taylor
who still have stock that has not sold
Woodrow de Espana shift unsold stock in the
due to the downturn,” he says. “In some individuals bargain hunting.” Remember that banks are banks, they last year. It is now selling 35 two and three
cases we get bulk stock (5-20 units) Developers and some banks are do loan products and banking, they are bedroom units at Valle de Alenda, Alicante
bought by investment groups that can using a variety of tactics to market not real estate agents.”
from €173,000 - a mark down of 35% from the
now not afford to hold on to the stock.” such properties, such as investment Sague admits that auctions only
previous bank valuation of €267,000.
DEDE
Commenting on activity in Cape clubs, syndicates and BMV specialists, work if the discounts are greater than
In addition to fractional product at
VELVEL
Verde, he adds: “The current buyer while others prefer auctions and 40% so most developers continue
discounts off previously listed prices,
International Property Adviser Luis Teixeira da
OPEROPER
Silva is doing no money down (NMD) deals in
Portugal (“with everything including closing
costs paid for and real discounts against
valuations up to 30%”), UK (“up to 60% off
against RICS valuations”), and Cape Verde
(discounts up to 55% off list price).
Over in Florida, a number of agents are
specialising in foreclosure and bank owned
MM
property. Coldwell Banker Team Realty,
ARKEARKE
based in Orlando, is currently offering
international partners commissions on lead
TINGTING
referrals to pass on deals to foreign buyers.
In Miami, developer The Solutions Group has
implemented a Distressed Properties Purchase
Program with favourable CAP rates on South
Florida property.
Florida foreclosures | Developers and banks have a choice of auctions and specialist agents to sell distressed stock in Florida
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