Buying a Foreclosure Property Below Market Value: Five Tips from the Pros

By Jim Saccacio, RealtyTrac Chief Executive Officer

House hunting can be a very daunting experience, especially in today's real estate market. Both investors and home buyers have been priced out of the market by escalating costs, and good real estate deals are increasingly difficult to find.

But there are bargains out there, for people who know where to look.

Saccacio offers five tips to help you close a deal on a foreclosure property:

1. Learn about the different types of foreclosure properties and the foreclosure process.

   Notice-Of-Default (NOD) - a pre-foreclosure property

   Notice of Trustee Sale (NTS) - a pre-foreclosure property

   Real-Estate-Owned (REO) - a foreclosure property which has been re-purchased by the bank

2. Secure financing early - it's important for a buyer to be pre-qualified before engaging in discussions with a seller.
3. Engage a real estate agent as a "buyer's representative" - "Buyer's representatives" have the home buyer's interests at heart, and are charged with finding the right property and negotiating the best price for their clients.
4. Do your homework - Purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties, but offers much higher potential savings.
5. Make a realistic offer - The keys to a successful foreclosure property purchase are diligence and patience.

"For people willing to do some homework, the foreclosure market offers some of the best opportunities in real estate today," explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace.

Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal.

With interest rates ticking up and ARMs adjusting upward, experts predict an increase in the number of foreclosure properties on the market. RealtyTrac, which provides all the foreclosure data for both MSN House and Home and Yahoo! Real Estate, has already compiled a list of over 550,000 foreclosure properties across the country.

"Foreclosure properties can be a terrific investment, or give home buyers a much more affordable option than traditional properties," notes Saccacio. "But they're not a way to get rich quick, and a foreclosure purchase needs to be approached in an educated, intelligent manner.

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