Richard M. Sander (Your Myrtle Beach Real Estate Expert)

In my last post, we discussed how sometimes a foreclosure really isn’t a foreclosure. Today, we’re going to dispel another Myrtle Beach foreclosure myth.

This goes against the conventional wisdom of real estate, and it will probably annoy you. Are you sitting down?

Here it is: Most investors, especially Myrtle Beach real estate buyers, believe that making a cash offer on a foreclosed property will get them a better deal. I’m here to tell you that this is not true.

Here’s why: the bank does not want to own the property. The bank wants out, as quickly as possible, and with as much of its money as possible. Everyone – including the bank – knows that the asking price is below fair market value. The bank expects multiple offers, and you must remember that in Myrtle Beach, most of your competition is not first-time homebuyers… your competition is other investors!

So how do you gain an edge? Easy… you have to think like the bank!

Picture this: you are the bank, holding a worthless $200,000 mortgage on a property you’ve just foreclosed on. You list the property with a Myrtle Beach real estate broker, and you receive two offers on the property:

Offer 1: $110,000 cash, contingent upon acceptable property inspection, to close 60 days from today, $1,000 earnest money.

Offer 2: $120,000 with financing, 10-day due dilligence clause, buyer is approved for an 80% loan, to close 45 days from today, $5,000 earnest money.

Not all competing offers are this diverse, but my point should be clear. The bank will accept offer # 2 nine out of ten times for the following reasons:

1. Offer # 2 will net the bank more money against their now-worthless mortgage, and the stronger earnest money deposit screams “I’M SERIOUS!” The bottom line is always the most important to the bank.

2. Offer # 2 will put the money in the bank’s hands two weeks earlier. Two weeks might not seem like a big deal to you, but the bank has 20 more foreclosures to deal with right behind this one. Every minute counts!

3. Since Buyer # 2 has already been approved for a mortgage, and the bank knows that the property will appraise for the asking price (remember, the bank had an appraisal done prior to listing the property), both offers are on equal footing with respect to cash-versus-financing. Cash is not king here.

4. Both buyers intend to have the property fully inspected, but to the bank, the difference between an inspection contingency and a 10-day due-dilligence clause is night and day. The bank couldn’t care less about the property itself, and doesn’t want to deal with repairing or replacing anything. The bank doesn’t want to see any contingencies in your offer. The buyer either agrees to the bank’s bottom-line price or not. A 10-day due dilligence clause tells the bank that you accept their price and terms, but need a few days to make sure that the property is fully acceptable.

This is another example of how a qualified foreclosure specialist can help navigate through the quagmire of foreclosures and help you find the best deal – and then give you an edge over other buyers. And that edge is exactly what you need.

In my next blog post, we’ll talk about more strategies to increase your edge over other buyers.

Smart buyers know that there are numerous ways to purchase foreclosed real estate in Myrtle Beach. Each option differs greatly in how you'll get the best deal. Buying a foreclosure on the courthouse steps is radically different from using a Myrtle Beach Realtor to help get you the best deal on a foreclosure listing in our MLS.

What many people don't know is that there is an increasing number of Myrtle Beach real estate listings right now that are being advertised to the public as foreclosures - but they aren't really foreclosures.

Well... let me rephrase. The property WAS foreclosed on. But the seller purchased the property as a foreclosure and is trying to sell it to you - obviously at a higher price. The property might still be a good deal - but not nearly as good a deal as when he bought it!

How can you avoid this?

That's easy. Almost all lenders will list their foreclosed properties with a real estate company on the MLS. And South Carolina real estate law says that the real estate company must identify itself in all advertising. So... if you see a foreclosure listing that doesn't include the name of a real estate company... walk away.

Once you've verified that the property is listed with a real estate company, should you call them? Not necessarily! Always remember Real Estate Rule Number Two: Who's Got Your Back? (Real Estate Rule Number One is Location! Location! Location!)

Real Estate Rule Number Two is is very important, especially with foreclosures. Many buyers are shocked at the scope of paperwork thrown at them by banks and other entities like Fannie Mae and Freddie Mac. A qualified foreclosure specialist can help navigate through the quagmire of foreclosures and help you find the best deal - and then help you negotiate with the lender for an even better deal! This will give you an edge over other foreclosure buyers. And an edge is exactly what you need.

In my next blog post, we'll talk about more strategies to increase your edge over other buyers.

The Myrtle Beach real estate market may appear to be at the bottom of a hole, but Builder magazine (the trade journal of the home building industry) expects our market to dig its way out this year and begin its climb back to the top.

Builder magazine ranked Myrtle Beach among the top 20 “healthiest housing markets for 2010,” highlighting the area’s continued influx of new residents and a recent increase in building permits. Myrtle Beach’s appeal and the pent up demand to move to the area persists despite the tough economic times, according to Fred Coyne, President of the Horry-Georgetown Home Builders Association.

We've seen many local builders, including Chicora, Centex, DRHorton and Lennar all ratchet up construction activity during the first two months of 2010 in anticipation of the rebound. They're competing with short sales and foreclosures, but they've done a great job of narrowing the gap.

You can read the article here or search Myrtle Beach homes, condos and land here.

If you are selling Myrtle Beach real estate these days, you’re probably looking for all the advice you can find on how to maximize your ultimate sales price. Why not take advice from the group of people who can tell you what your home is worth – and how to make it worth more?

That group, of course, are real estate appraisers. Working on your behalf, their advice could help you sell for more. What do they look for? Here are their top three pieces of advice:

1. Paint and carpet. A fresh coat of paint (white or off-white is best) and updated floor covering makes a strong statement to a buyer. There will be no signs of cracking or peeling paint, wallpaper, and spots on carpet. Appraisers say that this is the single best upgrade you can make, and you will likely a return on your investment of greater than 100% here.

2. Deep clean everywhere. Have a friend search your home with a critical eye. Anything that can use some elbow grease should get it. Anything that can be put in the garage, or in storage, should go. Remember… less stuff = bigger looking home!

3. Get buyers in the front door. Many homes get crossed off the list while the buyer is sitting in the car out front. If the outside of your home doesn’t scream, “I’ll make you proud to own me!” then the exact opposite is true. Get out there and cut the grass. Remove clutter. Fix cracks in the driveway and sidewalk. Flowers are an inexpensive – and attractive – touch.

Once these three steps are complete, stand back and let the buyers do their thing!

South Carolina is hurting, and the housing market feels the pain. Data released through the Home Mortgage Disclosure Act shows a mixed bag of hardship and promise throughout the Myrtle Beach real estate market. While it is true that our market freefall has ended, and 2009 home sales ended the year above 2008 numbers, the real newsmaker is the sheer magnitude of the decline, with sales dropping by more than 80% in some areas.

The one bright spot in the Myrtle Beach market is the area east of Kings Highway from 8th Avenue North to Withers Swash, which experienced an almost 29% increase in mortgages.

Most areas showed double-digit declines, most notably along the Myrtle Beach oceanfront between 8th Avenue North and 21st Avenue North, where the number of mortgages dropped almost 90%. The Forestbrook area was hit hard as well, with declines topping 85%. And while investor and second-home mortgages were down significantly, they still accounted for more than 40% of all mortgages last year.

Industry experts say that the mortgage delinquincy rate - the percentage of loans that are 90 or more days late - is at 4.76% and rising in Horry County. Foreclosures are likely to continue "well into" 2010, continuing the difficulty banks are experiencing and contributing to their miserly lending environment.

High unemployment is likely to continue for the foreseeable future as well. An analyst for the South Carolina Employment Security Commission said that the state would have to create 2,000 jobs a month - for the next five years - to make up for the number of jobs lost over the past two years.

Well, we can hope.