Real Clues

[RealClues] #329: Foreclosures

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New for June 1-15, 2008 at www.ListenandLearnRealEstate.com (See Featured Products for detailed descriptions)
*The Key to Profits in 2008--It's Not the Web. Eleven Strategies to Help You Improve Your Business
*Ready to Beat the Competition? Five Strategies for Breaking out of the Box
*A Hot New Niche: the Basics You Need to Specialize in this Important Area
*Seven Guidelines for Selling Investment Properties

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Table of Contents
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1. CoachingClues: Good News in the Foreclosure Numbers
2. Welcome Notes: Environment Is Stronger than Will
3. Reprise: Whom Would You Hire to List Your House?
4. Create a Better Life: The Most Important Tool in Your Real Estate Toolbox
5. Positive News for Positive Realtors(reg): Great news from FHA plus much more
6. New this week at www.LuxuryClues.com: Million dollar shoes, cities where prices are appreciating, plus much more
7. Featured Products: Our Best Seller for a Reason
8. Increase Your Production with Personal Coaching
9. Give Us Your Feedback on this Newsletter
10. How to Subscribe/Unsubscribe

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1. CoachingClues: Good News in the Foreclosure Numbers
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When RealtyTrac released the latest foreclosure numbers in Mid May, the newspapers all reported that "Foreclosures are up by 65 percent!" Today's column looks at the same numbers and arrives at a very different conclusion.

As I travel across the country speaking for various events, there is one message that keeps coming through loud and clear: "What are we going to do about the negative media?" Agents and clients alike are discouraged by the constant onslaught of negative news. The challenge is that the press reports what sells. Unfortunately, bad news sells better than good news.

To understand what is going on in the foreclosure market, you must first look at how many properties actually went through the foreclosure process in a given month. RealtyTrac reports the number of properties with "filings." This includes any property that has received a Notice of Default, lis pendens, Notice of Trustee Sale, or Notice of Foreclosure Sale. An important point to note is that each of these filings takes place prior to foreclosure. The number that the press does not report is the actual number of "REOs," i.e. the properties that have gone through the complete foreclosure process and are now owned by the bank.

RealtyTrac reports the filings plus the REOs as a total number. This is the number that is up 4.4 percent (not 65 percent) from March. The number that the press is reporting is the difference in foreclosures from April of 2007 as compared to 2008, not the amount of increase from the previous month.

Using the entire number of filings plus the total REOs, the number RealtyTrac arrives at is that one out of every 519 properties received a notice or experienced foreclosure. The press reports this data as if one out of 519 properties has been foreclosed upon. That's 2/10 of one percent or approximately 2 properties out of every 1,000.

According to NAR, there are approximately 68 million homeowners in the United States. RealtyTrac appears to be reporting on all categories of property since the number they are using corresponds to approximately 126,000,000 units. The number of properties actually taken back by the bank was 54,574. That translates into .43 properties per 1,000. Thus, the numbers reported in the press as "foreclosures" are actually 4.65 times higher than the actual number of properties that have actually been returned to the lender.

The good news in these numbers is that out of the 243,353 filings, only about 20 percent actually end up back with the lender. This means that up to 80 percent of the borrowers are working out some sort of resolution with their financing problem. In fact, on Monday June 2, 2008, FHA reported that they had helped 200,000 owners avoid foreclosure by refinancing their mortgages.

The RealtyTrac numbers also contained some great news for some of the hardest hit parts of the country. What I didn't see making headlines was the following:

Foreclosure rates were down in April 2008 as compared to April 2007 in 21 states. More importantly, many of the hardest hit states reported declines in their foreclosure rates: California (-0.04); Colorado (-2.91); Illinois (-2.78); and Nevada (-5.00).

The California numbers are particularly impressive since they reported an increase of 20.66 percent in foreclosures in March 2008 as compared to March 2007. For the April rates to be down that far is excellent news. Although Florida had an increase from April 2007 to April 2008 of 16.56 percent, their March foreclosures were actually down by 6.76 from March 2007. Arizona was up in April, but down 4.67 percent from March 2007 to March 2008.

What's even more interesting is to consider the foreclosure numbers excluding the three states hit hard by layoffs in the auto industry (Michigan, Ohio, and Indiana) and the four states where there was considerable over building and a tremendous amount of speculation (Arizona, California, Florida, and Nevada.) These seven states accounted for 131,306 of the 243,353 filings, a whopping 54 percent of the entire total. In terms of total REOs, these states accounted for 32,931 of the 54,574 or over 60 percent of all properties that actually went back to the lender through foreclosure. If you remove these seven states from the mix and calculate the average number of properties that actually went back to the lender in foreclosure per state for the other 43 states, the number is 503!

The bottom line here is that the news is much better than what the banner headlines in the media report. The hardest hit states have all seen a decline in foreclosures in at least one of the last two months. Furthermore, organizations such as Acorn.org that assist sellers in working out their loans report that they are helping up to 60 to 70 percent of the people who contact them for help. Granted, there are still plenty of people who are in trouble, but there are rays of sunshine breaking through, even in the hardest hit parts of the country. The question I would like answered is why isn't this positive news being reported elsewhere?

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2. Welcome Notes
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Welcome to our new subscribers this week. Each week RealClues provides you with great strategies to improve both your business and your life. If you find this issue of RealClues helpful, take a moment to hit the "forward" button and send it to another friend in the business.

Buckminster Fuller, the inventor of the geodesic dome once said, "Environment is stronger than will." In other words, no matter how strong your intentions are about making changes, unless your environment supports them, changes are almost impossible to make.

The onslaught of bad news about gas prices, foreclosures, and market conditions wears down even on those of us who search for the bright side of the business. To counteract this, avoid reading negative news from the media and tune into this column to hear what's right about the business.

Another challenge is the people in your office. If you would like to keep positively focused, you may want to limit how much time you spend there. Instead, you may want to set up a home office. Not only will it save you money on gas, you'll be able to avoid the people who can drag you down.

When someone asks you how the market is, don't say, "It's terrible" or "unbelievable." Instead, tell them that it is "different" from how it has been in the past. See www.LuxuryClues.com (6/11/08) for a more detailed discussion of this concept. The goal here is to surround yourself with an environment that supports you to have a great business, regardless of what the market does.

Make it a great week.

Bernice Ross, MCC, and Byron Van Arsdale, MCC
www.RealEstateCoach.com, www.LuxuryClues.com, www.RossdalePress.com, www.ConferenceCallTraining.com, and www.TeleconferenceLine.com

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3. Reprise: Whom Would You Hire to List Your House?
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Would you hire you to list your house? The way you answer this question provides a clear snapshot of how you view the real estate profession as well as how much value you place on the skills that a professional Realtor(reg) brings to the table.

http://www.realestatecoach.com/articles_archive/art200609would.html

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4. Create a Better Life: The Most Important
Skill in Your Real Estate Tool Box
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Scripts, strategies, closing techniques? What is the most important skill that you need to become successful in the real estate business? This may surprise you and although it sounds easy, it's often harder than you may think.

http://www.realestatecoach.com/articles_archive/art200703-listening-consultations.html

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5. Positive News for Positive Realtors(reg)
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Good news from FHA, why inventory declines are important, advantages to buying now, and excellent news about pending sales in Northern California.

If you need good news now, tune in to hear this week's Positive News for Positive Realtors(reg)

http://listenandlearnrealestate.com/news.html

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6. This Week at www.LuxuryClues.com
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Shoe Lovers Don't Miss This: Million Dollar Shoes!
Unique Luxury Closing Gifts plus a Guide to Gift Giving
2500 Cities where Real Estate Prices are Appreciating
It's not a "Bad" Market; It's a Different Market

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7. Featured Products
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**Our Best Seller for a Reason
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**New at www.ListenandLearnRealEstate.com Six to eight new audio broadcast training modules EVERY month for only $29.97 per month or $147.00 for six months. Here's what's new for June 1-15, 2008:

*The Key to Profits in 2008--It's Not the Web.
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*Ready to Beat the Competition? Five Strategies for Breaking out of the Box
If you keep doing the same thing, expect the same results. Discover five ways to make your business unique and increase your income by breaking out of the box.

*A Hot New Niche: the Basics You Need to Specialize in this Important Area
What's the hottest new niche in 2008 with an anticipated 1.65 million sales and virtually no agents addressing it? Don't miss this session that gives you the basics on what you need to get started.

*Seven Guidelines for Selling Investment Properties
If you're business is slow, consider adding investments as a new niche. The typical investor buys two properties every year. If you want to know what it takes to develop a successful residential income business as well as key pitfalls to avoid, don't miss this great session.

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8. Increase Your Production with Personal Coaching
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Looking for a well-trained coach who knows the real estate business? Our coaching team can help you increase your production and make your dreams come true. Send an e-mail to Shane@RealEstateCoach.com and we'll help find the right coach for you.

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9. Give Us Your Feedback On This Newsletter
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We want your feedback-to share your thoughts and suggestions, please e-mail us at Shane@RealEstateCoach.com.

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10. How to Subscribe/Unsubscribe
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Visit our Web site, http://www.RealEstateCoach.com to subscribe/unsubscribe to RealClues.

Copyright (c) 1996-2008, RealEstateCoach.com and Teleclass4U.com, LLC. All rights reserved. Permission is granted to reproduce, copy, or distribute RealClues as long as this copyright notice and full information about contacting the contributors to this newsletter is attached.

Contributors to this newsletter:
Bernice Ross, MCC, and Byron Van Arsdale, MCC, Owners, www.RealEstateCoach.com, www.LuxuryClues.com, www.ConferenceCallTraining.com; www.RossdalePress.com; and www.TeleconferenceLine.com
Shane Bowlin, REC General Manager

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