But for as much as the foreclosure filing statistics can be astounding — over 300,000 homes were served last month alone — the prevalence of foreclosures depends on where you live.

As reported by RealtyTrac, just 4 states accounted for more than half of the country’s foreclosure-related activity last month.

California : 22.7 percent of all activity
Florida : 14.9 percent of all activity
Arizona : 6.7 percent of all activity
Illinois : 5.7 percent of all activity
The other 46 states (and Washington D.C.) claimed the remaining 49.9%.

However, just because foreclosures are concentrated geographically, that doesn’t make them less important to homebuyers around the country. There’s been more than 1.4 million foreclosure filings in the last 12 months and that’s a figure that can’t be ignored.

Distressed properties now play a role in one-third of all home resales.

Therefore, if you’re in the market for a foreclosed home, here’s a few things to keep in mind.

Properties are usually sold “as-is” and may not be up to living standards. Be sure to physically inspect the home before buying it.
Buying a home from a bank is rarely as streamlined as buying from an individual homeowner. Be prepared for delays and long closings.
Foreclosures aren’t always listed for sale publicly. Ask your real estate agent how to access the complete foreclosure inventory.

In order to use the federal homebuyer tax credit, you must be under contract for a home by April 30, 2010 and closed by June 30, 2010. That doesn’t leave much time to find a bank-owned home and make it to closing. If you’re serious about buying foreclosures, it’s probably best to start your search soon.

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By way of example, a Short Sale may be appropriate for a home seller whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000.  Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a mortgage loan.  Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

For this reason, Short Sales are sometimes considered “the economical alternative” to default.

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start.  And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

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At the current sales pace, existing home inventories would sell out in 7.8 months — 30 percent faster versus November 2008.

For a 10-month window, that’s a major housing supply reduction and it helps to explain why multiple-offer situations have been so common lately.

Moreover, the same report from NAR showed sales activity reaching its highest point since July 2007, too.

If you’re looking for evidence that the long-standing Buyers Market is ending, this month’s Existing Home Sales report might be it.

Even median sales prices — typically dragged lower by distressed and foreclosed properties — declined at its slowest pace in a year.  The market may have turned a corner.

Home prices are rooted in the basic economics of supply and demand.

• When supply outweighs demand, home prices fall
• When supply lags demand, home price rise

Since March 2009, the market has been moving in the right direction.  Low mortgage rates, ample housing supply and a first-time home buyer tax credit fueled buy-side demand so that home prices are now rising in many U.S. markets.

If home supplies stay on this path into 2010, expect home prices to rise even more.

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As reported by RealtyTrac.com, more than half of September’s foreclosure-related activity occurred in just 4 states:

1. California
2. Florida
3. Nevada
4. Michigan

These states represent just 22.05 percent of the total U.S. population.

Overall, foreclosures are up 29 percent from September 2008 and, while, the data seems negative, defaults are creating some interesting buying opportunities.

Foreclosed homes often sell at a discount as compared to non-foreclosed homes. Cheap prices, low mortgage rates and willing buyers have helped to spur home sales in many U.S. markets. In August, “distressed homes” accounted for one-third of all existing home sales.

That said, buying foreclosures isn’t for everyone.

First off, foreclosed homes are often sold “as-is” and may be in perfect condition, or may be inhabitable. If the property falls into the latter category, it’s important to get estimates for the work needed to make the home livable. Suddenly, the home may not seem like such a “steal”.

And, secondly, buying a home in foreclosure can be a 3-month process or more. For some people, this is just too long.

Buying a home in foreclosure is fundamentally the same as buying a “regular” home — there’s a contract and a closing. But most of the steps in between are different.

Read the complete foreclosure report, plus take a peek at foreclosure heat maps on the RealtyTrac website. If you like what you see, talk to your real estate agent about what to do next.

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As reported by foreclosure-tracking company RealtyTrac.com, more than 50 percent of the country’s foreclosure-related actions in August occurred in just four states:

* California : 25.76 percent
* Florida : 17.4 percent
* Michigan : 5.4 percent
* Nevada : 5.0 percent

The rest of the “Top 10″ foreclosure states included Arizona, Illinois, Georgia, Ohio, Texas and New Jersey.

Versus July’s numbers, the U.S. foreclosure rate improved last month. However, the August data is awful in comparison to last year — foreclosures are up nearly 18 percent.

The silver lining? High foreclosure rates are yielding tremendous opportunities for today’s home buyers. Buyers of distressed properties now account for about one-third of all home sales and low mortgage rates and a federal tax credit are spurring sales.

Search the complete August 2009 foreclosure report for yourself, including foreclosure heatmaps and other trends on the RealtyTrac website.

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However, 3 states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined.

• California : 30.0 percent
• Florida : 15.7 percent
• Arizona : 5.4 percent

On a per-household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher.

Now, we point out these statistics for two reasons.

The first is to remind you that foreclosures can be highly local.  For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others.

And, second — foreclosures can represent a terrific buying opportunity.  Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too.

Furthermore, as banks get better at disposing of foreclosed homes, the process of buying one isn’t as challenging as it was, say, 12 months ago.

As part of its research, RealtyTrac.com catalogues a lot of foreclosed homes and lists them online.  However, you may find it better to start your search with a local real estate agent that knows the foreclosure market.

So long as buying foreclosures is a high-touch process — and it is a high-touch process — you may want to have a human face and agent to guide you through it.

The complete RealtyTrac report is available online.

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For the fourth consecutive month, the country’s foreclosure activity was dominated by a small number of states.

As reported by RealtyTrac.com, more than 50 percent of the country’s foreclosure-related actions in June concentrated in just 3 states:

1. California
2. Florida
3. Nevada

The states rounding out the Top 10 include Arizona, Georgia, Michigan, Texas, Ohio, Illinois and Colorado.

Meanwhile, June’s reported foreclosure figures are consistent with the data from earlier this year, suggesting that the foreclosure remedy plans put forth by the government and by lenders can barely keep pace with the national default rate.

Foreclosure-related actions nationwide are up 5 percent from May.

The silver lining in data this negative is that foreclosures are creating tremendous buying opportunities for the right buyers.  Because foreclosed homes tend to sell at a discount versus non-foreclosed homes and because mortgage rates are low, home sales are showing strength in a multitude of markets because of ample supply at relatively cheap prices.

Distressed homes accounted for one-third of all existing home sales in May.

Search the complete June 2009 foreclosure report for yourself, including foreclosure heat maps and other trends on the RealtyTrac website.

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This week we saw the economy shed 539,000 jobs in April, raising the 6-month total to nearly 4 million jobs lost.

And while the April data may look bad, it’s actually 10% better than what was expected.

Now, it may seem odd to categorize 539-thousand lost jobs as “good-for-the-economy”, but it’s important to remember that on Wall Street, expectations are everything.

As it turns out — relative — the actual job loss data wasn’t so bad.

Now, markets are making adjustments and re-forming expectations of what’s ahead for the economy.  They’re preparing for things like higher levels of consumer spending in the months ahead, and fewer home foreclosures nationwide.  Both outcomes would help to spur the economy from recession.

Other economic data included the second consecutive month, the number of homes under contract to sell increased — further evidence that housing markets may have already bottomed.

As reported by an industry trade association, the Pending Home Sales Index rose by 3-plus percent last month.

A “pending” home is one that’s under contract but has yet to close.  This is one reason why the Pending Home Sales Index is an imperfect statistic.

Just because a home is under contract doesn’t mean it will actually sell.  A lot can go wrong between the date of agreement and the date of closing.  Deals fall apart all the time.  But, when the number of pending contracts rises, we can infer that buy-side demand for homes is strong.

It’s likely that the number of homes under contract is being influenced by a combination of low mortgage rates, relatively inexpensive homes, and various tax credits for certain homebuyers.  Overall, it’s spurring demand and that’s part of what’s captured by the Pending Home Sales Index.

So long as the demand for homes outpaces its supply, home prices are expected to rise.

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Both Building Permits and Housing Starts were released today.  Building Permits were down over 61k from last month and Housing Starts down 62k..All though they are down this is a positive sign in the sense the supply is not increasing; it will take a tighter supply in order to clear the current inventory on the market.  Given the Foreclosure Moratoriums have come to an end, the housing number are welcomed, as we will start to witness an increases in foreclosures given the temporary delay in now gone.

I have one REO Agent friend who informed me that just last week he received 48 BPO request from banks, if only half hit the market that is HUGE.

The finger has been removed from the dike!

In a recent post by my idol; Tyler Durden he points out that we can’t hide from the massive wave of California Foreclosures that is ominously approaching.  While pointing out the fact he does not point to the reasoning.

Many borrowers in CA decided to take advantage of what we in the biz called the POA (Option ARM). Now that these ARM are set to adjust, the borrowers will need to refinance into a fixed.  Given the deterioration in housing values they will not have the luxury.  One item that is aiding in taming the massive amount of defaults is the fact that although the ARMS have adjusted the Index to which they are tied to has come down to the point they are paying less on their IO (interest only) payment then they would in a current fixed.  This temporary lull will only be brief. Once inflation kicks in and rates shoot up, the defaults will recommence as the homeowners walk!

[where: 98109] [where: 85012]

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That’s why I offer the Strategy Session!

Every month, I am probably involved in more real estate transactions than even the top Realtors in town. I know this real estate market, and my experience can help you understand what the conditions of the market are now, and how that affects your negotiating position. Understanding your position (strengths & weaknesses) is the first rule of negotiating.

If you decide to buy a home or refinance, and if I can help you save time and money, and give you the tools & information to help make you a more confident and effective negotiator, I think you will remember me.
•    The average American family moves every 6 years, so
•    You’ll probably buy several homes and refinance several times in your lifetime. I hope to earn your business for life.
•    When someone really does an exceptional job for you, you probably tell your friends about it. I want to be someone you would tell your friends about.

First, I’ll need to understand your situation, what you’re trying to accomplish. Then we’ll identify any missing information you would need in order to be able to formulate a strategic plan. We’ll figure out how to get any information we might need.

If you can be prepared for what’s ahead, if you know the facts about the market, what homes are appraising and selling for, if you know how to improve your bargaining position, and if you know ahead of time exactly how high (or low, depending on whether you’re buying or selling or refinancing) you’re willing to go – you’re going to feel a lot more in control of the whole process. You’ll end up saving a lot of time – whether you’re on a one-month time frame or a one-year time frame. You will be able to avoid paying too much for a home mortgage, and our negotiating advice could very well save you thousands of dollars, and thousands more when you factor in the interest you would have paid on the difference.

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