What It Takes To Buy A Condo In The Myrtle Beach Area ***UPDATED***2013
What It Takes To Buy A Condo In Myrtle Beach Area. Tara Melech - Keller Williams Realty - (843) 907-8787- Serving the Myrtle Beach area
I just received an article that states lending practices have eased up in the last year - for who? Certainly not for anyone who wants to own anything but a single family residential home.
The Myrtle Beach area was once booming with oceanfront condos that were selling like hotcakes. Today, it is a very different story. With the new guidelines FHA and Fannie Mae have set (and are setting), it makes it very difficult to buy a condo if financing is involved. Several lenders will refer buyers to other companies because they won't even bother with the mess. Some Realtors won't even bother taking an inquiry or referral for condos if the buyer will need financing to purchase the property.
There are several reasons for this: Of the new guidelines, some of the rules are causing problems for the Myrtle Beach area, such as: if there is a lockout on the door, then the condo may end up being considered a condotel, which makes it nearly impossible to finance. A lockout is a condo that has a separate entrance for another part of the condo (it could be a separate bedroom that may be rented out on a nightly basis attached to the property).
Another issue is the actual Property (Homeowners) Associations. Because of the many short sales and delinquent mortgages happening not only in Myrtle Beach but all over the United States, many condo owners have also defaulted on their association dues. This could cause the actual property owners association to go into default themselves, if enough homeowners are delinquent. The lenders are required to thoroughly check the POA for these kinds of items, and more. If the condos in one project/subdivision are considered an investment of more than a certain percentage, this may change the financing. If the property is an oceanfront investment (not primary residence), then the minimum downpayment now required is quite large.
There is an array of problems that are now adopted when trying to buy any kind of condo in the Myrtle Beach area. But if you are willing to invest the time, jump through hoops, and prepare to hit a few bumps on your way to closing, then the time to buy is now. The prices are so unbelieveably low, that an investment from Myrtle Beach to Pawleys Island, or anywhere along the grand strand area in Horry and Georgetown county makes sense - Especially if you are going to hold it for the long term.
For those serious about purchasing a condo, here is what you need to know:
1) "Cash Is King" - If you have the means to pay cash for a condo (or any property) and not involve financing, by all means, do it. Paying cash in this market could get you a better deal. Short sales, for instance, need final approval from the bank/lender. Paying cash for the property will look much more attractive to an owner or bank owned property, because there won't be as many hoops to jump through.
2) Financing - if you are purchasing a condo in the Myrtle Beach area, wether it be oceanfront, golf course communities, or investment - find out what your minimum down payment will have to be. With the saturated market and investment properties currently in default, the down payment has gone up. It is a minimum of at least 25% on some and as much as 50% down (for investment properties) If this property will be your primary residence, the down payment requirements may be lower, but is evaluated on a case by case basis.
3) The future market - Wether you need financing or are paying cash, consider the future market - if it takes so much more now to purchase a condo, what will the future bring as far as guidelines? Will it someday be so hard to provide financing on Oceanfront Condos, or any condos, or investment properties, that the only future purchasers will be cash buyers?
4) It used to be that the property was easy to qualify for financing, but it is almost harder to qualify a condo for financing than it is for an individual!
5) Property owners associations - be aware of the pitfalls that could take place if you are purchasing a condo within a homowners association subdivision, which is almost always the case. If the POA management company is in default because they are not current from the POA dues, then there will be a hiccup. If there is not enough in their reserves, then there will be a problem. If their master deed documents do not meet the fannie mae/fha guidelines, then there will be a problem. Each document is reviewed by the mortgage company and either approved or disapproved.
As I am not a finance expert, I can not tell you all of the regulations and guidelines to be on the lookout for. But, what I can tell you as a real estate professional is that your realtor should be able to work well with the lender of your choice and you. For more information, please contact me at your convenience. If you are looking to buy a property in the Myrtle Beach area, including any properties within Georgetown and Horry county, please consider me as your realtor of choice. You are what makes my business successful, and any opportunity is much appreciated. - Tara Melech - (843) 907-8787