Charleston SC Foreclosures – A Buying Guide
So you are considering buying a Charleston bank-owned / lender owned property ? These distressed properties are increasingly available in the Charleston Tri-County area and can represent a terrific opportunity to purchase a home with instant equity. However these transactions are more complex than a typical residential resale purchase and you must do your due diligence if you are to avoid buying the proverbial “ Pig in a Poke” … Believe me I do not jest…
So first we need to define and categorize Foreclosures as this nomenclature is used broadly and you need to understand the differences.
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
- Most buyers do not have an opportunity to inspect the home in advance of the sale. Imagine your surprise when you open the door and fall through the foyer floor due to termite damage… or that commercial property with the containers of toxic waste that will cost you $$$$$$$$$$$ to dispose of safely.
- Buyers frequently must contend with owner occupants… Are you prepared to evict owners or tenants? Are you prepared to contend with the damage that may occur to your asset?
- Title issues … How may 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.
- 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.
- There are no contingencies accepted based on financing so you must be confident of your ability to secure a mortgage.
|Charleston County SC - Master in Equity – Monthly Foreclosure Sale||Berkeley County SC - Master in Equity – Monthly Foreclosure Sales||Dorchester County SC - Master in Equity – Monthly Foreclosure Sale|
|1st and 3rd Tuesday at 11:00 am||1st Wednesday at 11:00 am||1st Tuesday at 11:00 am|
|Charleston County Judicial Center,
100 Broad St.,
Charleston SC 843 958-5070
|Berkeley County Courthouse
300-B California Avenue
Moncks Corner, SC 29461
|Dorchester County Courthouse
5200 East Jim Bilton Blvd.
St.George, SC 29477
|* To view the list of properties scheduled to be sold please click on the Free Foreclosure Lists Icon on the Home Page. Each link connects to the specific county website.|
Bank Owned Properties ( aka REO)
So lets begin with a definition of the acronym REO – it stands for real estate owned by the bank ( or other entity) … Banks own real estate because they acquire homes through foreclosure and because no one shows up on the courthouse steps to bid the minimum amount of the existing mortgage (s). Typically, banks do not want to sit on their inventory of real estate assets and will be likely to price the REO property for less, just to get rid of it. Often you may be able to purchase the property for discounts ranging from 5-20% off the current market value. REO’s or Bank-Owned properties represent the less risky scenario as the bank has wiped out the existing liens when it purchased the property through foreclosure.
Advantages of Purchasing Charleston REO Properties
- Although the sale is an AS IS sale most Bank Addenda will nearly always permit an Inspection Period … If you are dissatisfied with the Inspection (s) the bank typically reserves the right to address the deficiency (s) or they will release you from the contract with your earnest money intact.
- You can have a contingency based on financing.
- Your down payment depending upon acceptable loan program could be as low as 0% - if you are using VA or USDA loan programs. Also many banks/government entities will provide loan programs such as HomePath financing which can offer the buyer financing advantages.
Disadvantages of Purchasing Charleston REO Properties
- Bank Addendum supercedes all other documents – please remember the Bank Addendum is the controlling document. In some instances the bank addendum may be 29 pages in length and they vary from institution to institution.. Translation – READ EVERY WORD AND HAVE YOUR PERSONAL ATTORNEY REVIEW IT.
- Inspection periods can be as short as 7 days… dates are critical. If utilities are turned off you will typically need to pay to have the utilities reinstated for the inspection (s). These sales are As Is sales – banks are under no obligation to make any repairs.
- Frequently you must close with the bank appointed attorney … some banks will allow you to use your own closing attorney but this may require approval on a separate addendum and you may forfeit bank offered incentives such as paying for your Title Insurance Premium, reduced attorney fees etc. If you must or you choose to close with the bank’s attorney be prepared to possibly travel outside of the area or close on specific days etc. Restrictions typically apply..
- Per Diem penalties (usually $100 per day) will be accessed to the buyer if you don’t close by the agreed upon closing date. Regardless of the reason…
For an email list of all Bank-Owned ( REO) properties in Charleston SC as well as the surrounding areas of Mt.Pleasant, Daniel Island, Isle of Palm, James Island, Johns Island, Folly Beach, West Ashley, Summerville, Goose Creek, and Moncks Corner SC please email me at hlord@HeatherLord.com or call me anytime at 843 810-9414.
Contact Heather Lord today for all your Charleston, SC Real Estate needs!