Subscribing to a service offering online foreclosure listings is probably the best way to find a gem in foreclosure properties.  

Some companies, such as RealtyTrac, which provide such listings will also calculate how much foreclosed homes actually sold for against their estimated market value on the market. This will usually give you a good indication of how good an opportunity the property is.  

They will also provide an in-depth analysis of the national trend on foreclosure properties. Usually this is based on the discount-to-market ratio which indicates just how much savings you stand to make in certain locations of the country. As such, you won’t have to do much research on your own to find out where the best bargains are. 

Prices usually depend on property type, condition and location as well as the bank selling them if one is involved, information which you will usually get from subscribing to the online foreclosure listings.  

The listings usually include bank foreclosures that are not in tip-top shape which you can acquire at very low prices and make any necessary improvements and repairs as you go. However, some of the properties may not need any or a lot of repairs.

Bank foreclosures that become REO (real estate owned) usually offer the best bargains and can be negotiated, often allowing for lower interest rates, lower down payments and a reduction in closing costs. And usually they don’t come with other judgments or liens on the property. Moreover, the banks are flexible about letting you access the property for inspection purposes.  

REOs are not generally sold on court steps and are usually advertised in classified ads or can be found through multiple listings which real estate agents will have access to. That said, being in regular contact with experienced realtors can also help you unearth some good bargains.  

Bank foreclosures are usually priced well below the market value because the bank’s objective is to sell the homes quickly in order to finance a mortgage for a new buyer.