In our last post, we talked about the different foreclosure numbers that some companies have been reporting.

Naturally, people with a stake in the real estate market need straight answers. Because making investment decisions on bad — or inaccurate — data can mean the difference between success and failure.

So, let’s refer to a recent article from Dow Jones, which according to its Web site publishes the world’s most vital business and financial news and information, for clarification:

The divergent results can be explained by the way they count foreclosed properties.

RealtyTrac data includes properties in the early stages of a foreclosure proceeding, even before the bank actually owns those properties.

A spokesman for Foreclosure.com, on the other hand, said that the company only reports properties officially foreclosed and in the hands of the banks.

That is correct.

Foreclosure.com and RealtyTrac report on different pieces of information, which is an extremely important difference between the companies.

Why?

Because it directly affects the accuracy of the data that each collects. In short, it is very difficult to determine how many properties in the early stages of foreclosure actually exist across the country.

That is the primary reason Foreclosure.com chooses not to report on properties in “some stage of the foreclosure process.”

What’s more, properties in preforeclosure very often don’t make it to foreclosure. Distressed homeowners have many options before losing a home to the bank such as refinancing the loan or selling the property.

Finally, the nature of how these properties are made available to the public — generally by county record keeping and auction brokers — make it very difficult to track all of them.

While we track and offer information on a large number of preforeclosures, it would be inappropriate and irresponsible to lump this type of information with foreclosures and package it as reliable market data.

Foreclosure.com makes this commitment to all of its subscribers and the general public. We take great pains to ensure that our data is comprehensive, accurate and up-to-date. And we will only report data to the public that we are confident is an accurate representation of the market.

We do hope, in the future, to be able to make this information public. But we will only make the information available once we know it is accurate.