Why are there so many Myrtle Beach Foreclosures?
In 2005, Myrtle Beach saw an unprecedented upsurge in the real estate market. Savvy investors who participated in buying preconstruction condos in the several years preceding suddenly were realizing profits and equity of as much or more than 100%.
The word kept spreading, mortgage rates were low, and mortgage companies were more lenient than ever before. Anyone with a good credit record seemed to be approved for buying beachfront and resort property. As the market continued to explode, everyone who wanted to get involved in the concept known as "flipping" seemed to be able to do so. In many cases, these new investors never had the income to OWN a condo or home that was several hundred thousand dollars, but they took the gamble and obligated themselves, assured that they could re-sell it before taking possession, and turn a huge profit. And indeed, many did, for a while.
The prominent financial advisors and media pundits kept predicting doom for investors and the dreaded "bubbles" in the market. It was a self-fulfilling prophecy. For a combination of reasons...builders becoming greedy and being in high demand...too many developers developing too quickly...the news people constantly predicting a fall...and the too-easy mortgages being given to almost anyone - most being variable rate and ARM loans...it finally trickled to a stop. Investors became wary and re-sales no longer occurred. Suddenly these folks who had obligated themselves way above their means were in trouble.
By the time 2006 started, many of the early developments started closing. While some that never should have qualified for the high mortgages were able to get out of the deals, many more were not. Most could not bear the thought of losing down payments of $20,000-$50,000. They closed on the properties and hoped for the best. Vacation rentals were very good in 2006 and 2007, so the high HOA fees and huge interest payments were almost do-able. But then homeowner insurance carriers shot the rates up sky-high, and became the proverbial straw that broke the camel's back. Foreclosures on houses and condos began to multiply as over-extended families and investors could no longer afford to pay for them.
Buying Myrtle Beach Foreclosure Homes and Condos
The foreclosure process begins when the lender files a public default notice, called a Notice of Default or Lis Pendens. Most mortgage companies will only allow a 30 day past due period before they file for repossession. Several things can happen during the foreclosure proceedings:
There is a grace period at first, where the owner can refinance or pay the past due amount. This is called the "pre-foreclosure" period. Sometimes the owner can get permission to sell the property now for less than the amount owed. This is known as a Short Sale
When the pre-foreclosure period is over, the banks are forced to sell the property at a Myrtle Beach real estate auction, or occasionally they will purchase the property themselves, either in an agreement with the borrower, or at the auction. The property is then said to be bank-owned, or an REO Property, which is real estate owned by the mortgage lender. Usually, the auction is held, and other investors step in and get a great deal on the foreclosure property. You have to be ready to move fast and immediately as soon as you find one. An investor offering a cash payment will be favored over one that has to locate financing unless you are pre-approved and the paperwork can be completed quickly. Investigate the resorts ahead of time HERE and choose the ones you're interested in. Then have us work to locate the best deal for you so that you can obtain that great deal on a foreclosure condo in Myrtle Beach!
