Bridging Loans for Auction Purchases
What is the value of the property you just bought at auction? You probably think you have made a BMV purchase, however any lenders valuer may have other ideas!
Valuing Your Auction Purchase
One of the main reasons for buying a property at auction is to purchase below market value. Today we had a disturbing discussion with one of our regular bridging lenders that may impact this previously tried and tested method of acquiring investment properties.
Having been approached by a potential customer who needed to complete an auction purchase within a tight deadline we contacted one of our regular bridging lenders. We were surprised to hear that valuers are increasingly taking the view that whatever the purchase price of a property at auction reflects the the true open market value of the property. The reasoning being that the price paid is achieved in the open market therefore this is the actual value.
If this proves to be more than just one bridging lenders experience then any would be investor will need to keep a cash reserve to ensure that deposits are not lost. Needless to say we will be monitoring this situation closely!
- ‹ previous
- 2 of 21
- next ›
Return to our Bridging Loan Blog
- How fast can a bridging loan be arranged?
- Bridging Finance Case Studies
- Are bridging loans regulated?
- Do I qualify for bridging finance?
- What is a bridging loan?
- What does bridging finance cost?
- Why use a bridging finance brokers services?
- Has the Buy to Let market bottomed out?
- Do Closed Bridging Loans Still Exist?
- Property Auction Bridging Finance where fast loans are essential