Foreclosure statistics and how to use them to educate your clients

Statistics don't lie.

Your clients need to understand numbers. They are inundated with media messages that may or may not represent the entire ststistical story accurately. It's your job to be sure they have good information so you can guide them through the buying and selling processes.

A question everyone in real estate hears is, "How's the market?" Your answer will often determine whether or not that person will continue their real estate coversation with you. If the conversation stops after you answer, you should probably adjust your approach to this subject.

"The market it terrible."

Wrong answer. It's never terrible, and nobody wants to hear about it if it is. Try again.

"It has been interesting lately."

Still weak. Next!

"The foreclosures in our area are presenting great opportunities for buyers."

Getting better. Let's improve upon this.

"One out of every 35 homes in our city is in some stage of foreclosure. Our average market time is 62 days and mortgage interest rates make this the best purchasing opportunity since the Great Depression. Properties are selling at an average of 95% of their list price, mainly because cash investors are buying one-third of all the houses sold."

That's better.

When you use statistics to tell your story, you become more valid in the eyes of consumers. First of all, you demonstrate that you understand the numbers and what they mean to buyers and sellers. Secondly, you are removing emotion from the equation when you speak in numbers. Lastly, numbers are the language of business and real estate is a business.

I use foreclosure statistics (my favorites are ForeclosureRadar.com, Realty Trac, and the info I get from my title rep at First American) in my market because foreclosure sales are on everyone's mind. I tell my sellers that inventory is the lowest it has been in five years and notice of default filings are the highest they have been in five years. That means it's a great time to list today, but might not be a great time to list in six months. I have charts and graphs to show the statistics in a visually appealing way and help me tell my story about the numbers.

I use the same information when I talk to my buyers. I let them know we will most likely be in a multiple bid situation because 85% of the properties sold are getting multiple bids. I also tell them we are expecting another wave of foreclosures, but we don't know exactly when that will happen. Mortgage interest rates are at historic lows and the tax credit expires December 31st, so that's where we need to focus our attention.

The same set of statistics tell that story. Nothing about my conversations with my clients is bent or misrepresented. All I'm doing is obtaining good data, interpreting that data, and telling my clients what it means to them. I do this because it's my job.