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Manage episode 203926069 series 2281689
During this episode we will discuss how understanding the numbers in your market will help you decipher the future of Short Sales.
What the Numbers will tell you about the future of Short Sales!
I want you to take out a piece of paper, unless you’re driving and listening to this, in which case just listen. I’ll try to explain it so you can follow along, but don’t write this down while you’re driving. I don’t want to be responsible for that. For everyone else who’s not driving, I’m going to give you some numbers, and I want you to write them down, and I want you to write them down in the exact order that I give them to you. Got your pen? Got your paper? Here we go.
First number, 30, 56, 43, 13, 8, 100. Let me repeat them. 30, 56, 43, 13, 8, 100. Kind of sounds like a lotto poll. If you have those numbers, you did not win $800 million, but you may win something if you follow along with this. Did you get them all written down? You got them? Good. Let me explain.
I’m a really big fan of numbers, always have been. I was crazy about math as a kid, very good at math. I see numbers in my mind. I think about numbers a lot. Sometimes I’m accused of thinking about them too much, if you ask anyone that’s close to me. There’s a lot of things you can tell about numbers by understanding numbers and being able to analyze numbers, because they do have a true meaning, once you get them.
For instance, the first number I gave you was 30. What does 30 signify? I took it upon myself to do a little bit of a survey, and I analyzed 30 days worth of information for one county in the state of Kentucky; 30 days. 30 days represents one month, 1/12 of a year, roughly 8 1/4% of an entire year. In those 30 days what I was researching was how many properties went onto the active auction list. Remember we’re only talking one county in the state of Kentucky. In that one month there were 56 properties added to the auction list. That’s 56. 56 in one month, one county, state of Kentucky.
Could be other parts of the county had more, had less, but I just wanted to analyze where they came from, and what happened to them. You have to stick with me, because I’m going to take this in a place that probably will have a surprise ending. Understand this about my feelings about the foreclosure effort, at least what it really is and what it really means. Because to me when a property is actually sold at auction, it is the end. It is the final step in the lender’s attempt to recover money from what appears to be a bad loan.
Auction sales might appear in your area as being sheriff sales, they might be called trustee sales, master commissioner sales. Whichever way they are, they are by far, in some representation, a failure of the real estate community. Without a doubt, any property that ends up being disposed of at auction, would have sold for much more had there been a real estate professional involved. I’m going to prove this to you.
What numbers do we have so far? 30 days, 56 properties. Here’s the part where it starts to become interesting. Out of those 56, remember there are 56 of them added. These auctions take place every Thursday, 10:00 am round a courthouse. It’s very clearly marked. Everybody understands, if you’re involved you know where to go, you know where to stand. They seem informal at first. If you haven’t been to those, I suggest that you go and at least see the process of what happens.
Of the 56 that were put on the schedule, 13 were taken off the schedule. I don’t know exactly why the 13 were taken off. They mostly don’t say why they were removed. They just say that they were taken off, canceled. They might have been canceled because there was a clerical error, a filing error, a bank error, maybe the seller took some legal action, maybe they pleaded with their bank, maybe they had a final hope of something happening. Nonetheless, 13 of them came off the chopping block, and that left 43.
So we had 30 days, 56 started, 13 removed, and 43 remained. Here we’re getting to the part that’s going to involve you, every real estate professional in North America. I’m not blaming real estate agents, but in a way what you’re going to hear next is going to sound like agents missing the boat. Because out of those 43, remember 13 of them got canceled, we started with 56. Of those 43, my team researched the multiple listing history books. They went back as far as two years to see what took place. I said two years would show at least some activity that was taken to avoid this calamity.
There’s probably hundreds and hundreds of properties that didn’t show up on our list, because we’re only dealing with the ones that ended with their final demise of going to auction, going to sale. Also keep in mind that these 43 homes, they were at one time bought and lived in by moms and dads, maybe even the average 2.3 children, maybe even a dog in the backyard. Owners that at one point in their life had to actually fill out a loan application. They had to prove that they had jobs, unless of course they got it during the time when you didn’t have to prove you had a job. They probably had a down payment, and they agreed to sign a bunch of paperwork to get their piece of the American Dream.
What did my research team up with? They went back a total of two years, and out of the 43, only 8, I almost say that painfully, technically it would be 8 out of 56, but of the 43 or the 56, whichever number you want to look at, only 8 of them appeared in the prior two years, to have any assistance from a real estate professional.
Sadly, the numbers get even more depressing when you understand this. Out of those 8, only 2 of those were within a couple of months before the auction. 3 of them were closer to a year ago. That means that they were on the market at one point, but they came off the market almost a year ago, and 3 more of them had been on and off the market two years ago. 8 out of 43, or 8 out of 56, whichever way you do the math, of the owners took the time to reach out for the help of a realtor. Yet I know, and I hope you do too, that 100% of these houses would have been sold for more if an agent was involved. At the very least, having an agent involved would have prevented perhaps the final demise and the final chapter of these folks’ American Dream.
How can I say that they all would have been helped? It’s simply this, you know doggone well that once the lender takes the property back at auction, who do they go to to dispose of the property? You; they use real estate agents. Real estate professionals are the most common vehicle to dispose of properties. Why? Because as a rule of thumb we, as a group, are able to sell them for more, much more than you would sell at auction. Why would they end up at auction?
Well, that’s the sad part of this reality that those folks that lost their homes to the end result of an auction, probably didn’t know that there was help out there for them, because out of 30 days, 56 properties added, 43 disposed of, and only 8 of them had sought help, and 100% of them could have gotten help. Remember this is just one county in one state for one month.
What can you do? Let me make three really quick suggestions of what you can do to make an impact, because it is a tragedy. Number one; you need get in the habit of spreading the word. Spreading the word to the people you know, the people that know you, to let them know that if they know anybody who’s struggling with their mortgage. Whether they are struggling because they owe more on their mortgage than their house is worth or they’re struggling because they can’t afford to keep up with the mortgage. You need to spread the word so that those folks know that they can call a pro, a professional real estate agent.
Number two, go out there. Spend a little bit of time each week finding folks that need help. Pull up the list of upcoming auctions and go to their house, knock on their door, talk to their neighbors. You’d be amazed what a couple of hours each week would do to get the word out. Plus it will make you feel better, and the fresh air will help you. Maybe the exercise will too.
Number three, share what you know with other agents. Learn how they get the word out, or let them know to get the word out, and let them know how you got the word out. Don’t be just focused on how many listings did you get out of it, how many deals did you do. Join or form your own short sale mastermind group or distressed property group. At the very least, look at the numbers, because the numbers will give you a good indication about what’s going on in your little market, your county. 30 days, 56 houses, 43 sold, gone, 8 sought help, but 100% could have used help.
Thanks and Happy Learning,
Scot Kenkel, Instructor
P.S. What do you think? Leave your comments below. Thanks.
The post SSP 008 : Short Sale Help: What the Numbers will tell you about the future of Short Sales! appeared first on How to Sell More Houses.