Broker Insight
How to package a below market value property finance case.
Below market value opportunities can be attractive, but they also need careful evidence. This guide helps brokers explain the discount, the valuation basis, the borrower contribution and the repayment route before a BMV case is submitted.
Start Broker Quote →The core issue
A discount is not enough on its own.
A below market value case usually starts with a simple idea: the borrower is buying a property for less than they believe it is worth. That can be a legitimate opportunity, but a lender still needs to understand why the discount exists, whether the value is supportable and how the facility will be repaid.
Practical point: a lender may consider the value argument, but the case still depends on underwriting, valuation, legal due diligence, credit approval and final documentation.
Vendor motivation
Explain why the property is being sold below value.
The first question in many BMV cases is why the vendor would accept a lower price. Credible reasons may include speed, certainty, probate, corporate disposal, portfolio sale, mortgage pressure, development timing, vacant possession, off-market negotiation or a buyer who can complete quickly.
Speed
The vendor wants a quick, certain completion and accepts a lower price for execution certainty.
Condition
The property needs works, but the proposed value after works is supported by evidence.
Structure
The sale forms part of a portfolio, corporate disposal, connected transaction or negotiated off-market deal.
Valuation evidence
Support the market value before relying on it.
BMV cases often rely on a value higher than the purchase price. Comparable evidence should be recent, local and relevant. If the borrower is relying on an after-works value, the works schedule and costings should be clear. If the property is commercial or mixed-use, income and yield evidence may matter more than simple square-foot comparisons.
- Comparable sales or listings with clear relevance.
- Current condition and any works required.
- Previous valuation material where available.
- Rental or income evidence for investment assets.
- Clear distinction between purchase price, current value and any future value.
Contribution and legal risk
Show the money, structure and hidden risk.
A strong BMV case should explain deposit, costs, fees, interest, works contribution and any additional funds required to complete or stabilise the asset. Third-party or JV money should be disclosed early.
Brokers should also ask whether title, lease, planning, occupancy or legal issues explain the discount. These issues do not always prevent lending, but they should not arrive late.
Exit route
The BMV strategy needs a credible route to repayment.
BMV cases often repay through sale or refinance. The exit should explain why the asset will be saleable or refinanceable at the expected value and whether the requested term is realistic.
Sale
Evidence demand, expected sale range, timing, marketability and any works required before marketing.
Refinance
Evidence value, rent, borrower profile and why a future refinance lender may accept the stabilised position.
Fallback
Explain what happens if the preferred sale or refinance route is delayed or the valuation is lower than expected.