[UKPRwire, Mon Jan 01 2007] December 2006 saw the first stages of the development of the RedSofa.com website, with the launch of the property sourcing activity, more commonly known as Below Market Value (BMV), which is aimed at providing tailored solutions for homeowners who are looking for either a quick sale or guaranteed sale on their property.
BMV business is becoming an established player in the property market, catering for the needs of those people who choose not to rely on the traditional methods for selling their property. On average, it currently takes 153 days to buy and sell property in the UK, and with around one third of sales falling through, property investors have identified a niche where they can step in and break the property chain, ensuring the sale completes without the usual stress and complications.
This is nothing new, but todays transient population has meant that the traditional property market selling mechanism, the estate agent, doesn’t facilitate the needs of people looking to sell quickly. More recently, the record levels of secured and unsecured debt levels in the UK, has seen the demand for BMV services increase significantly. Property owners who have over-stretched themselves during the recent property boom, are now struggling with the increased cost burden of the servicing of debt, and are looking for solutions to prevent either repossession or county court action.
Speaking about the recent website launch, Jeremy Vernon, Co-founder of RedSofa said: ‘the BMV business was a natural choice for our inaugural internet presence, as this will compliment the future development of the both the property development and property management aspects of the RedSofa brand’.
The internet site has been designed by Stockport based design agency Ego, who demonstrated a clear understanding of the fresh and innovative concept required by RedSofa. Jo Clarke, Ego’s Creative Director commented that the site ‘reflects their strong customer focus’ and is looking forward to working with RedSofa on their future projects.
So what does Below Market Value actually mean? Simply it means that, if property owners are willing to accept a lower offer, typically between 75% and 90% of the open market value, in return for a quick and guaranteed property sale, then a service such as this is for them. Obviously not everyone is willing to accept a ‘discounted sale’, but to obtain their required asking price they are relying on an inherently unpredictable process to be able to achieve this.
The problematic property market has not gone unnoticed by the Government, who have attempted to resolve some of the inherent issues, with the proposed introduction of the Home Information Packs (HIPs) due to become law in June 2007. However this has not been without its problems, the Home Condition Report, seen as the most important element of the HIP, was withdrawn in July 2006 in a shock u-turn from the Government. So whether this will help the already lengthy process of selling a property in the UK remains to be seen.
For the vendors peace of mind, RedSofa have teamed up with Hometrack, the market leading automated property valuation system, to provide a more scientific property valuation. This eliminates the trick of deflating property prices to offer artificially smaller discount %, a tried and tested method used by some BMV investors. So vendors can satisfy themselves that the benchmark valuation is fair and up-to-date. The Hometrack system uses various different sources of information, from neighbourhood price and market trends to property sales prices, to value every property in the UK. This system is also used by mortgage lenders, high street banks and estate agents.
Next year is going to be an interesting year for RedSofa, with fears of a stagnating property market and increased interest rates, taking advantage of less forgiving conditions, than those witnessed in more recent years, will prove to be a testament to the RedSofa business model.