Foreclosures are on everyone’s mind as an opportunity for an investment, a first flip, or a great way to buy in our market. This article clears the air about some common misconceptions about foreclosures.
As an agent, I’m often asked about foreclosures. I’ve learned over the years that there are a lot of misconceptions about foreclosures. Foreclosures in our market are auctioned on the first Monday of the month. I’ve provided links below to the Horry County and Georgetown County websites.
https://www.gtcounty.org/223/ Foreclosure-Sales
https://www.horrycountysc.gov/ departments/master-in-equity/
Be sure to read up on how to register as a bidder and read the Frequently Asked Questions. These are properties that have gone through the foreclosure process and are being auctioned. Every few months I attend the Horry County foreclosure auction. Before you get serious about buying a foreclosure, I highly recommend you attend the auction. It’s a rude awakening when you see very serious investors with deep pockets battling it out for these properties. You’ll also notice that the list of foreclosures publicly posted doesn’t match what they are auctioning. That list changes for a variety of reasons so be prepared to research lots of properties and spend hours preparing only to the have the property you’re interested in does not get read out. Or… you’re outbid by other investors within seconds. This is the reality of attending the auction. I recommend you make a day of it: go to the auction, eat lunch at the Pickled Cucumber, and then have an ice cream at Stella’s. You don’t need an agent for the courthouse auction (and commissions aren’t offered to agents so I can’t responsibly help you).
Bank Owned foreclosures and a little back story:
Our market was like the rest of the country and saw a huge number of foreclosures after the 2007-2008 financial crises. When banks handed out mortgages with little to no employment and income/debt verification, it caused a wave of homes to be foreclosed on when individuals couldn’t pay for them. A lot of government regulation was passed in the aftermath of the banking crisis. I see it every day and I can confirm that if you get a mortgage today, you have to confirm EVERY part of your financial picture before being approved. Does that mean foreclosure don’t happen? No, there are still unexpected employment layoffs and circumstances that can’t be foreseen that lead to foreclosure. But instead of hundreds of homes being on foreclosure each month, there’s dozens. There’s also misleading headlines. In December 2023, there was only 1 property on the foreclosure list for Georgetown County. If in January 2024, there are 2, someone could accurately proclaim that foreclosures have doubled. Or say that because there were two properties on the list in October and November that December’s number was half. But at the end of the day, with the total number of courthouse foreclosures being in single digits, where are the foreclosures?
They are being sold on the MLS (Multiple Listing Service). The loan officers in 2008 are now the vice presidents and decision makers at the banks. They recognize the value in keeping the properties as assets instead of losing money at the auction and selling the properties themselves. They’ll hire a real estate agent or a service to prepare the property for market, take pictures and sell it on the MLS. These are NOT pre-foreclosures. These are bank owned properties and I’m happy to connect you with a list of these properties. I’ve helped lots of clients with bank owned foreclosures. The upside: you have a non-emotional seller who is motivated to sell the property. The downside: they have no knowledge of the property and are selling it As Is. They are strictly about the money so cash is better and the bank wants as few contingencies as possible. Many banks will not entertain inspections and requests for repairs. Are these a deal? They can be but they are also not for the faint of heart.
Pre-foreclosures:
If anyone bought their property prior to 2020, they most likely have significant equity. There’s no need to go into foreclosure when you can sell the property for considerable more money that what they owe on it. Once foreclosure proceedings occur, those are public records and big data companies distribute that information. If you miss a payment, that is published to your credit and is identified by many websites like Zillow and Realtor.com as a pre foreclosure. If your payment processor mishandles your payment… you too could have your home identified as in “pre-foreclosure” status. The VAST majority of these pre-foreclosure lists are fake. A lot of websites have been created offering lists of foreclosures that are borderline illegal. The homes are not for sale, they are not in foreclosure and they are a huge waste of time to look through them. The URLs includes all the names, HUD, Housing and Urban Development, etc. They use official looking websites that want you to download a list or click a link and provide your phone number and email. Once you do, you start getting spammer Realtor and lender calls offering to help you buy foreclosures. I help people. I don’t pay websites or run a website to trick people into giving me their contact info under false pretenses. Most of these websites are traps to identify you. Not to identify foreclosures for you. Are pre-foreclosures real? They can be. Have I helped people avoid foreclosure? Yes. Would I ever advertise that so their bargaining power is limited? No. Have I ever seen a pre-foreclosure that was real and good deal for my buyer? No. Not one. Ever.
If you’ve stuck around and read this entire article, I appreciate it. If you have questions or input or have your own foreclosure story, please reach out to us. If you know of someone facing foreclosure, please contact us ASAP so we can help. If you’re looking for a foreclosure as an investment: attend the auction, ask us for a list of bank owned property and avoid/ignore anything being marketed to you as a pre-foreclosure. Please don’t hesitate to contact us if you have any questions regarding foreclosures, bank owned properties or “pre-foreclosures”. We’re here to help!
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