What is a distressed sale? – The sale of a property whereby the homeowner is in financial distress and can’t afford to pay the mortgage any longer also known as a forced sale. Which is an action taken in a civil court forcing the owners of a piece of real property to sell their property and to divide the profits (usually there aren’t any). A forced sale is generally the result of a petition to partition action such as: foreclosure action or bankruptcy .
HOW TO GO ABOUT BUYING A FORECLOSURE…
Please note this is for Charleston county, SC only and that your county and state likely has its own rules and protocol so contact your local office. However I think this is the general jist of most transactions around the country as this has been going on for hundreds of years.
Thank you for your interest in foreclosure sales. This page was prepared in an effort to answer the most frequently asked questions about this process. If you have further questions, please contact me at 843.478.8061.
If you are interested in bidding on a piece of property in Charleston County, SC, which has been foreclosed upon and is scheduled to be auctioned for sale in the near future, the following are some things you may find helpful to know:
1.) When real property is ordered to be foreclosed in Charleston County, a judge called the Master-in-Equity will issue an order directing the mortgaged premises (or part thereof as required to satisfy the claims established) be sold by or under direction of the Master.
2.) The judgment (often called a Master’s Decree of Foreclosure) will contain a legal description of the property being sold, a provision for the necessary legal advertisement, the time and location of the sale, and notice of any senior liens, taxes or other rights to which the property to be sold is subject.
Sales are held the 1st and 3rd Tuesday of each month at 11 a.m. at the front entrance of the Charleston County Judicial Center located at 100 Broad Street in downtown Charleston.
The judgment also will specify the amount of good faith deposit necessary at the time of the sale, which is usually 5% five percent of the successful bid at the sale. Compliance must be made with the bid by 4 p.m. that same day. This deposit is required to be in cash or certified funds and is not refundable. The plaintiff or any other party may be a purchaser on such sale. You have 30 days to comply with the balance of the bid with cash or certified funds.
Some Plaintiffs seek a deficiency judgment against the Defendant. This means the Plaintiff is not only foreclosing its mortgage but is seeking a money judgment too. Unless the pleadings state that no personal or deficiency judgment is demanded or any right to such judgment is expressly waived in writing, the bidding will not be closed upon the day of sale but remains open until the thirtieth day after such sale exclusive of the day of the sale. When the sale is re-opened for final bidding, the highest bid is accepted. The Plaintiff can only bid at the first sale.
Short Sale– is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.
If you want a short sale the process is very much like a traditional real estate transaction except in one way. The hassle. For you to take advantage of a short sale, you’ll definitely want a local Charleston area real estate agent on your side. Primarily because the bank is technically the seller. Even though the seller might still be the owner of record, for a short sale to occur the seller’s mortgage lender has to approve it. Unless the seller just sells the home for less than they owe and pays the difference to their lender.If the seller can’t do that then the lender with the mortgage will have to O.K the home being sold for less than is owed on it.
The largest problem with purchasing a short sale home is that the bank is not willing to work with you (the buyer) to make the purchase easy or cheap for you. Usually when putting an offer on a home that is approved for a short sale the bank will only sell the home “As Is”, and doesn’t care if there are problems with the home even if you get a home inspection. Secondly, they usually will drag their feet because if you make an offer they probably have a couple other offers on the table that they will work against you so you must make sure you have a large earnest money deposit ready, and no contingencies. Otherwise they will not consider it and/or they will contact the current offers they may already have.
When looking to buy a home that is a short sale you must keep in mind that since the home isn’t being sold for profit that there is no room for the seller to pay a buyer’s agent commission. Therefore, be prepared that you may have to pay a buyer’s commission out of your own funds. However, President Obama and HUD have instructed banks that they have to allow agents to be paid when representing a buyer in a short sale, but this isn’t always the case.
*Don’t worry. If this seems like too much of a scary proposition, there are plenty of unbelievable cheap homes on the market that are great deals for sale the traditional way.