Do you aim for BMV or Market price, Now?

Desperate or motivated vendor

 

This.

 

Not sure i agree with you on that one. Using your example, I genuinely believed you bought well. You were able to use your expertise to your advantage and structured a win win situation for all parties. However I do not believe you bought below market value (because in my opinion it does not exist - except for the scamming method that ace mentioned - which was NOT the case at all in this situation).

Person advertised at $185,000. Truth is they were expecting people to negotiate down. I'm sure we all know that.
Person got an offer at $155,000, vendor accepted, so this in my opinion is market value.
Damage occurred, resulting in a reduced offer of $135,000.

You saw the damage and knew the cost to fix it, offered $147k. For the vendor, this may be a bargain as it may have cost them more to fix themselves (because you know stuff, you could estimate how much it would cost to fix, someone else might end up getting charged more and not even realise - eg the vendor).

Also if a full valuation been done before the damage could be fixed, it would have crashed the sale, wouldn't that imply that your offer was actually fair (if not potentially over market value) - at that particular point in time (with the unrepaired damage) ?

Anyway, i believe we are talking about the same thing - except i do not refer to it as Below Market Value, rather buying well and knowing your market.

 

for those that say the market price is what you buy it at since you are the market has a degree of truth to it,

however, lets say you bought your parents $1m house off them for $500k for whatever reason,

technically, the "market price" is $500k but the intrinsic value is still $1m whilst the market I guess for a split second is $500k

 

and sometimes for IPOs insitutitions can get shares at a small discount too

 

Yes the bank did allow reval straight away - lets agree on buying below bank value vs below market value then?

Market value and bank value are often different

 

Actually, that was the exact example i was thinking of - that would be a case of buying below market value, but thats only because your parents agreed to it. No way i could see a random stranger agreeing to that*.

* However I was told of a situation where a house in Chatswood was sold for $1.3 in early 2014. The owner apparently got offers of $1.5m, but the owner ended up giving to this particular young family for less because they told him they wanted to preserve the house and raise their children.

 

Nice work on the re-val. Theory is the same, just different choice of words.... i use to believe in the term "BMV"... until NB used it excessively

 

Lots of obsession with voodoo and terminology these days.

Whatever this term means for someone, just because you thought you bought BMV does not guarantee your ability to sell it for more. Maybe you will also sell BMV, whatever that means.

Similarly, just because I paid above market value (in someone else's eyes), does not mean I can't sell for a lot more later. I'm sure we've seen plenty of examples of that.