Charleston SC Foreclosures – A Buying Guide

 Are you considering buying a Charleston bank-owned / lender owned property? These distressed properties are increasingly available in the Charleston Tri-County area and can present a terrific opportunity to purchase a home at a greatly reduced cost. However these transactions are more complex than a typical residential resale purchase and you must do your homework if you want to avoid buying the proverbial “ Money Pit” … Believe me this is no joke!

First, let’s define and categorize Foreclosures as this nomenclature is used broadly and you need to understand the differences.

Foreclosure – A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.  The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of reak property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage  or lien”.

Foreclosed Auction Homes – Homes offered for sale at the Courthouse will be sold to the highest bidder provided minimum requirements are met. The three Tri-county Counties; Berkeley, Charleston and Dorchester have set foreclosure auction dates and provide a list of properties in advance that will be available for sale. Frequently the bank acquires the property due to lack of bidders or bid amounts that do not meet their minimum purchase requirement which typically is the amount of the existing mortgage plus a minimal fee. These purchases can offer the best opportunity for Charleston area home buyers to acquire a property at a bargain price, however they also present the most risk.

Disadvantages of Courthouse Auction Purchases

1. Most buyers do not have an opportunity to inspect the home in advance of the sale. Imagine your surprise when you open the door only to find the walls covered in toxic mold because the utilities have been disconnected for months… or you go to update the bathroom and under the floor are colonies of termites that have eaten through entire sections of structural beams.
2. Buyers frequently must contend with owner occupants… You now own a home that has unwanted guests… Are you prepared to evict owners or tenants? Are you prepared to contend with the damage that may occur to your asset?
3. Title issues … How many liens are secured by this property? I RECOMMEND THAT YOU DO NOT PURCHASE AN AUCTION PROPERTY WITHOUT AN INDEPENDENT TITLE SEARCH WELL IN ADVANCE… Unpleasant surprises could include unpaid taxes, mechanics liens, HOA dues or other liabilities.
4. Earnest money requirement is typically 5% and is due in certified funds by 4:00 pm on the day of the foreclosure sale. The balance of the successful bid price is due 20 – 30 days following the sale date; most often 30 days. EARNEST MONEY IS NON-REFUNDABLE.
5. There are no contingencies accepted based on financing so you must be confident of your ability to secure a mortgage.

Charleston County* – Master in Equity – Monthly Foreclosure Sale – 1st and 3rd Tuesday at 11am, Charleston County Judicial Center, 100 Broad Street, Charleston, SC

Berkeley County*  – Master in Equity -Monthly Foreclosure Sales – 1st Wednesday at 11am, Berkeley County Courthouse, 300-B California Avenue, Moncks Corner, SC

Dorcester County* – Master in Equity – Monthly Foreclosure Sale – 1st Tuesday at 11am, Dorchester County Courthouse, 5200 East Jim Bilton Blvd., St.George, SC 29477

* These dates may change in accordance with the courthouse schedule, please verify on the appropriate county website for accuracy.

Tags: agency, agent, buyer, buyers, carolina, charleston, estate, first, foreclosure, home, janine, mabe, median, negotiate, real, sales, south, time, west ashley

Posted on Wednesday, July 20th, 2011 at 1:46 am and is filed under Buy a House, Community, Estate, First Time Home Buyers, Foreclosures, Homes, Homes for Sale, Housing Market, Property, Property Investment, Real Estate, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.