Be Prepared to Compete - When an attractive, well-priced foreclosure comes on the market, brace yourself for some competition. These are the only properties attracting lots of buyers right now. Lenders don’t want to own the property, so chances are they will be attractively priced right out of the gate. Base your offering price on comparison to the market of recent sales, not on sales to listing price ratios. I’ve seen too many buyers hung up on the size discount they were receiving off of the list price. So hung up they missed really good deals.

Know When to Lowball - If a bank-owned home has been on the market for several weeks or months at a certain price, chances are the price is too high. This is a time when the lender may consider a lowball offer. If they just substantially reduced the price, they will likely not be as receptive.

Avoid 3rd Party Auctions - You’ve seen the advertisements for real estate auctions featuring hundreds of bank-owned homes. Most of these are the white elephants that couldn’t be sold on the open market, regardless of price. The auction is just a method of generating excitement and sometimes will result in buyers getting caught-up in the emotions of the auction process and overbidding for the properties. The lenders almost always have a reserve amount so they are not true absolute auctions and you’re not going to buy properties for pennies on the dollar.

Get Expert Help - Seek the advice of a real estate agent active in the market and with experience in foreclosure properties. There are too many things that can go wrong in this process without the help of an experienced professional.

Insist on Inspections - Under no circumstances should you agree to buy a property as-is without the right to have an inspection, and the right to cancel the contract if you are not satisfied with the results. Most as-is contracts will make provisions for this, and lenders are accustomed to buyers having this contractual right.