So you wonder if searching for foreclosed properties can save you money? Well at the present time I think it depends on what you looking to accomplish and how big is your pocket book. This hub is for beginner investors or someone looking to purchase a home and save some money.

The first thing to remember is that buying a foreclosure can be a little more aggravating than a conventional purchase. It can also take a little longer to complete the negotiation process since you are dealing with a bank.

First let's talk about a few places that you can start looking for foreclosed properties in your area.

1. HUD Homes are a great place to start. One great reason is that most listings on the HUD site have pictures and full disclosure of problems and condition. Follow this link to start searching in area www.hud.com
2. Bank websites- Most banks have what they call REO listings (Real Estate Owned) Just Google - Bank owned lists or REO Bank lists to find these sites.
3. Foreclosure.com - This site offers a free trial and a monthly fee after 7 days. The advantage of this site is that not only do you get foreclosure listings but you also get preforeclosure listings as well as FSBO listings. Many of the FSBO listings are in danger of foreclosure and thats why they many found this site to begin with.

These are just a few and also happen to be my favorite. I suggest you start with the free listings first and if you decide you truly want to pusue a foreclosure then venture on to pay sites to get more detailed information.

Now let's talk about why to look at a foreclosed property. Foreclosed homes are sitting on the books of a bank or financial institution and need to be sold as soon as possible. Banks are not in the business of selling homes and foreclosures are a very costly potion of their business. While it seems that for this reason alone, that all foreclosures will be a great bargain, it's simply not the case. Many foreclosures have such a large balance that the asking price is extremely high and may take many months or even over a year to be reduced to a fair deal.

And that's what brings us to Rule #1- Never get emotionally attached to a foreclosed property!!!!!. You must always treat this type of purchase as a pure business transaction. You can pay too much for any home, don't make this mistake on a foreclosure. Let me be the first to tell you that not all foreclosures are a bargain!!! In fact I know several people who have agrred to pay a certain amount for a foreclosure only to find out that the home appraisal came in less than the purchase price. OUCHHH!!!!

Which brings us to my RULE #2- Never make an offer before you get an appraisal!! Now you may disagree with this rule as do many investors, but I want to protect the average homebuyer as much as possible that may be reading this. The last thing you would want is to offer more than the appraised value. Yes it is a cost but can be well worth the money. There is another reason for an early appraisal that I will cover later.

Now for RULE #3- Never make an offer before you get a home inspection!! Again some will disagree but one thing not noticed could cost you thousands. Since most foreclosures are sold AS-IS I feel this is worth every penny. I purchased a beach home without an inspection a couple of years ago that I planned to flip. I didnt get a home or termite inspection mostly because it was a great deal and i wanted to act fast. Plus the home was in immaculate condition and I thougth I would spend less than $3000 before reselling it. I did put in the offer that the repairs could not exceed $10,000. Unfortunately after we closed we uncovered over $32,000 worth of repairs needed. So please get the inspection first.

So you found a home that you like, youv'e had the inspection and appraisal completed, and you are now wondering what to offer. First you need to do a little homework.

1. Research all like homes in the area that have sold in the last 90 days
2. Try to identify which ones were foreclosures
3. Look at new construction prices in your market for this type of construction
4. Research prices of vacant lots in the immediate area.

This homework will help you determine what the fair market value may be at this time. Make certain that your research includes other foreclosed homes. Your realtor may discourage you from doing this but I promise the appraiser will use other foreclosed homes when looking for comparable homes. This is a major reason for me suggesting an appraisal before you make an offer. Plus the appraised value will probably be higher if done before a price has been negotiated. Many will also argue this point but I can speak from personal experience. The last home I purchased I felt was a great bargain. In fact, I bought this home $130,000 less than I thought I would. When the bank ordered the appraisal amazingly the appraised amount was exactly what the purchase price was. This doesn't always matter but if your bank will use the prior appraisal your chances of obtaining an equity line after closing will increase dramatically. I will cover more of this in my next hub "How to purchase foreclosures with No money Down" No I do not sell courses on this topic nor will I try to get you to pay for a subscription to my newsletter. All of my articles are based on personal purchases and experiences.

Now on to the offer process. Many get caught up in making an offer that they feel will be accepted easy. I say " Your leaving money on the table". I have seen homes that I thought were out of my price range so I stayed away. Then weeks later I saw the sale price thousands less than what I would have paid and tens of thousands less than what I felt would have made it a profitable transaction. So my advice is to make an offer , that if accepted, would make you want ot call everyone you know and tell them about your deal. Remember, the worst thing that can happen is that the bank says "NO" And believe me they will, over and over. Some banks are just down right tough to deal with or aren't allowed to go to your price at this time. It's important not to get frustrated during the negotiaton process. That's why I have Rule #1. You see many people get so attached to the home that they fold early to the first or second counter offer from the bank. Many homes that I have purchased have taken 6,8, even 11 offers to finally get an acceptable deal. Make up your mind before you make an offer what the maximum price you are willing to pay and stick to it. Don't go over!!!! In several cases after I had made a final offer the bank has contacted the agent and been willing to take my offer. Weeks even months after the last offer. So don't give up and stick to your guns and remember you started looking at foreclosures to get a great deal. So don't walk away without getting one. They are out there if you look hard enough and do your research.

Good luck and I hope this article has helped you in your quest to purchase a foreclosure!