BMV (below-market-value) properties can seem like an opportunity that’s too good to pass on. A property with a price point that’s significantly below its market price? Sign me up!
But it turns out there’s a deeper truth behind this very tempting proposition.
We’ve compiled a list of the most common ways these BMV deals often go wrong – and how you can find better BMV deals that are actually profitable.
1. Hidden repair needs that cost a bomb
One of the attractive factors of buying a BMV property is the potential to save money on a home purchase.
Sellers and agents know this all too well. It’s why you see the term BMV liberally thrown about in so many listings. In fact, for many of them – it’s a sales trick used to pull in innocent, unassuming buyers looking for a good deal.
They may be hiding a laundry list of expensive repair needs and require renovations that come with a huge price tag – such as structural problems, water damage, or issues with the foundation.
This is why having the right agent in your corner is key.
When you engage one of our Super Agents at Ohmyhome, you’re also getting someone experienced, honest, and who’s seen all of these tricks by sellers and other agents. With their trusted expertise, you can safely be guided through the buying process according to your specific needs.
They’ll warn you against listings that aren’t actually a good deal, consult you on how to make a decision, and negotiate, liaise, and deal with the sellers on your behalf. You can find Ohmyhome’s customer reviews about our property agents on Facebook and Google, on which they have an average 4.9-star rating.
2. Difficult to resell
Another important point to consider is the valuation of the property. What if the valuation is not an accurate one?
On one hand, you have unethical sellers who are obviously trying to overinflate the property’s valuation.
But on the other hand, there are many ways even a perfectly legal home purchase may not make a profit in the future.
Unrealistic expectations by the owner
The owners themselves may have unrealistic expectations as they have a simplistic view of their own property.
Ignoring important market trends
Over the previous years, we’ve seen numerous major trends heavily affect home prices. From supply chain issues due to the pandemic, economic factors affecting interest rates – and leading to a drop in the volume of transactions, and even the political situation over the last years as well.
Unrealistic assumptions about a property’s future growth
Certain infrastructure and government projects in the upcoming years can really move the needle for a property’s future value. But newer agents and optimistic sellers tend to make projections that are a little overblown and not matched to reality.
Getting an accurate valuation is one of the most important aspects of the home-buying process. With a few simple steps, you can easily access a more wallet-friendly (because it’s free) option with an Ohmyhome market report. It will include a comparative market analysis: the past transaction prices of properties in your town and in its surrounding area. This will enable you and your property agent to determine the best selling price for your home which is also according to the current market trend, so you’ll neither price it too high nor too low, but just right.
3. Potential legal complications
Do you value your sleep at night? Then, you want to be cautious of certain sellers that are potentially hiding behind serious bankruptcy, credit, or insurance issues.
They may also be operating with malicious intent. Here are a few common loopholes these sellers will attempt to deploy against unsuspecting buyers.
a) Unethical sellers
One such way a seller might try to pull one past you is through unscrupulous changes in the Sale and Purchase Agreement (“SPA”).
There are very strict regulations in place to protect homebuyers, but that still doesn’t prevent unethical sellers from trying to slip one past you.
Sometimes, you may find yourself signing onto a SPA with terms that are not the same as what both of you initially agreed on. Even if the law is on your side, you’d still have to spend precious time, energy, and finances trying just to sort this out.
b) Unpaid fees & taxes
Property owners are required to maintain upkeep on multiple fees, rates, and taxes such as quit rent, parcel rent, and assessment rates “cukai pintu”.
Owners that are behind on their required payments can be a legal nightmare to deal with.
c) A front for scams & frauds
One of the most common schemes is the ‘booking fee’ fraud, where the fake agent claims to be the owner, and says this is the first sale. After bringing you for a viewing, they subsequently ask for a booking fee, after which you will not hear from them ever again. The act of collecting booking fees is also illegal, and those found guilty could be liable to a fine of up to RM50,000 or a jail term of up to five years or both.
d) Properties in distress
There are many popular videos on social media claiming properties that are ‘under distress’ are a perfect buy as they can provide you with a significant profit.
Properties that are facing foreclosure or where the owner is facing bankruptcy are also situations that can cause your experience to be a truly unpleasant one.
Keeping an eye out for these common potential legal pitfalls can save you a world of trouble and headache, which is exactly how your first home-buying experience should be in the first place – seamless and convenient.
Find Your Dream Home In No Time, Hassle-Free
At Ohmyhome, your convenience is our priority. Our highly experienced agents are trained to match you with the right home and property, take you through the process with an expert hand and be there to advise you when it matters the most.
You can sit back, relax and let our experienced agents expertly hold your hand through the entire process. They’ll keep you far, far away from unscrupulous agents and unethical sellers while showing you only the most relevant and perfect homes for you.
Our Super Agents have served more than 8,000 happy customers, with over 70 families housed almost every single month.
You can contact us via our Live Chat, Whatsapp, or fill up this form to book a free consultation with our knowledgeable and experienced in-house agents who have a track record of transacting more than 70 homes every year.
