The tsunami of bad real estate news seems to grow daily. The key to overcoming the tidal wave of bad news is to identify the opportunities in your local market and then target your business to maximize your sales.

The National Association of Realtors reported that existing-home sales in July hit a 15-year low. Although NAR still expects existing-home sales to surpass the 5 million mark this year, the annual rate of sales dipped to a seasonally adjusted 3.83 million homes during July, down from June’s pace of 5.26 million.

If you would like to do more business, here are three opportunities worth investigating for your business.

1. Interest rates are down, making homes even more affordable
As of December 2008, interest rates were at 5.1 percent. A year ago they were averaging 5.12 percent. Today’s average is 4.42 percent. That’s a 13.7 percent decline from 2009. The housing affordability index has also decreased by 5 percent since December 2008.

Opportunity: Buyers are often worried that prices may decline. News reports that discuss a double-dip recession or the possibility of further price declines make both buyers and sellers skittish. The net effect is that many potential clients are afraid to take action. To motivate your buyers to take action now, point out the historically low interest rates.

Because of the way mortgage loans are amortized, the reduction in a borrower’s monthly payment is not directly proportional to the reduction in interest rate. A 13.7 percent reduction in interest rate, for example, will reduce a borrower’s monthly mortgage payment by a little less than 8 percent. So a monthly mortgage payment that would have been $1,000 in December 2008 would be about $923 today.

When buyers voice their concerns about prices declining further, here’s another way to handle their concerns:

"Mr. and Mrs. Buyer, did you know that by buying now your mortgage payment would be almost 8 percent less than it would’ve been at the end of 2008?"

To really drive home this point, explain what happens when interest rates increase. For example, if interest rates increase from 4.42 percent to 5.42 percent on a $200,000 loan, the buyer will pay $43,802, or 27 percent, additional interest over the life of a 30-year loan. If the interest rate increases from 4.42 percent to 6.42 percent, the buyer will pay $89,908, or 56 percent, additional interest on a $200,000 loan.

Another strategy for closing is to ask, "How much do you believe this property will be worth a year from now?"

If the buyer believes that the market will be down by 10 percent, suggest, "Would you like to see if you can buy this property with this year’s great interest rates and next year’s price?"

2. Serve the bargain-hunter and investment market
According to the latest data from the Mortgage Bankers Association, the nation’s overall delinquency rate dropped from 10.06 percent to 9.85 percent in the second quarter of 2010. The percentage of seriously delinquent loans (current REO inventory or homes that are 90-plus days late) dropped from 9.54 percent to 9.11 percent.

While these numbers provide some glimmer of improvement, HAMP (Home Affordable Modification Program) cancellations have increased by approximately 50 percent. Furthermore, the number of loans that have gone into default and then brought current has declined by 25 percent. These two numbers suggest a significant increase in REO inventory in the upcoming months.

Opportunity: Smart investors are contrarian. They purchase when buyers are not buying and sell when sellers aren’t selling. To reach investors and those who are searching for bargains, set up a website such as or Provide your Web visitors with a list of the REOs that are the best-priced and in the best condition.

If you are working with short sales, give priority to those where the bank has already set a potential sale price. Also, don’t forget about regular sellers who have to sell. These homes are often the best values in the market because they have been well maintained and haven’t been sitting vacant for months.

3. Global buyers still want U.S. real estate
Did you know that global buyers close 50 percent of their transactions as compared to 33 percent for domestic buyers? Did you also know that agents who represent clients from outside the U.S. earn 50 percent more on average than those who don’t have global clients?

Working with buyers from elsewhere in the world has several other advantages. Global clients are accustomed to large downpayments. They are also likely to pay all cash. This group may be one of the most important market segments that can help to stem the tide of foreclosures.

Opportunity: To reach this population, use a service such as or that translates your listings into other languages. If you are fluent in another language, post a link on your home page that indicates the other language(s) that you speak. Use that link to take your Web visitors to an alternate home page in that language.

There are opportunities in every market. It’s simply a matter of recognizing the trends in your local market and then focusing your business on those areas that are most likely to generate the highest rate of return.

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