One of the leading resources for foreclosure data is RealtyTrac (www.RealtyTrac.com). As we’ve mentioned in previous blogs, statistics are better than any crystal ball. In this article we’ll take a good look at the current national foreclosure and related statistics and see what we come up with.
First of all, there is a stat called “New Foreclosure Filings”. This term, according to RealtyTrac can be defined as; “the moment the mortgagor files a Notice of Default to the borrower” which as most know can misrepresent the ACTUAL number of foreclosures that occur (due to borrowers recovering from their default status). The number of New Foreclosure Filings as of this blog is at 272,967 for the month of September & 2,034,370 Year to Date! That’s a LOT of filings even if 50% of the filings redeem (which is highly unlikely).
Now let’s move on to a more REAL number, in other words a number that can’t be influenced by numbers that can change (such as redeemed mortgages that went into default). “Foreclosure Sales” is the next number reported by RealtyTrac. As of this blog there were 21,345 sales in the month of September 2007 nationally and 167,545 Year to Date. If you couple this statistic with the “Average Sales Price” you begin seeing the reason so many real estate agents get involved in REO. Year to Date, the Average Sales Price has dropped only $2,800 to settle in at $166,185.00.
So, here’s the math laid out for you:
$166,185 * 5.5% (average commission) / 2 (list side & buy side split) = $4570.00 commission to each side
Sure, you must consider overhead and a referral to the asset management company, but let’s now consider the next equation:
Consider that there are currently 1,363,758 Realtors in the US (11/2007 NAR). Then consider the fact that there are 2,034,370 new foreclosure filings nationwide. That means that each Realtor in the USA could handle 1.5 listings EACH if everyone learned REO. We all know that not everyone likes working with REO so you can start adding up those listings quickly. Lastly consider the fact that several broker price opinion reports will be needed for each of these properties at least 2 times, paying approximately $45 each time. That comes out to be roughly $183,093,300.00 in reports paid out over the next few years.
Are your ears perked up yet?
Comments(2)