As suggested by Allyson, review some of the profiles of the agents here on Trulia, interview and decide which agent is going to be the best fit for you.
Also, don't just limit your self to distressed properties or you may miss out on an opportunity. Do keep in mind that homes will sell for market value so there really isn't a "great" deal to be made. If it is under market value, you may have other issues with the property to contend with; such as, deferred maintenance, liens, and title issues.
Have an amazing day!
A good number to look at would be the "pending" sale prices near a home that you seek. What did a buyer just offer right now within the last few weeks on a home like the home you want to buy? That is a decent indicator of the market value -- anything that you read about how much a seller owes, that is not highly relevant to the conversation about the home purchase unless it is a short sale situation.
You don't see so many foreclosures in Saratoga or Los Gatos because the market is inclining -- going up right now. So you see mostly home values over the value of the loan a seller owes on the home.
And to answer your question, an offer on a foreclosed home is nearly the same process as a home that is owned by a regular seller, with a few exceptions.
A bank will need to see exact means (proof of funds to close) and most seller's agents also like to show the seller "proof of funds to close." So the process is not too different anymore! You do have a few things with a bank or foreclosure that are different -- usually the offer needs to be As Is, and negotiations once the purchase price is agreed upon are basically nil. I usually recommend you get an building contractor into the home before you write the offer on a foreclosed home to avoid surprises of property condition. Plus with a foreclosure, you won't get much in the way of disclosures as to the history of the home.
But you won't find too much in the way of foreclosed homes! The listings that you see where someone missed one or two loan payments and then show up on a "distressed" list, those are not going to typically turn into a "distressed" good deal.
It can be frustrating to look at the #s that show up as "pre auction" or "pre foreclosure" and think you could get in for the amount owed. That is not a good indicator of the ultimate sold pricing for a home...
If a house is in the "pre-foreclosure" stage, that doesn't necessarily mean it is for sale. And be careful: the numbers some real estate sites put on those homes don't represent prices, they represent judgment amounts.
If the owner does decide to sell the home, and it is a short sale, you may get a small discount off market value. But depending on the market you are looking at, you should still expect to pay at least 90% or more of the full market value. Same situation if the home eventually is foreclosed on - usually it then becomes a bank owned ("REO"), but again the discount isn't extreme. And it is easier to get a better price if you are a cash buyer (and there are lots of cash buyers out there).
Bottom line, if you are interested in purchasing a home, hire a good agent who has some short sale training/certification and he/she will help you look at all avenues. But be prepared that there are no hidden bargains out there - no matter what path you take you will be paying somewhere near market value for a home. Good luck.
Please feel free to include me in your search. I have the experience you may be looking for.
At your service,
Certified Distressed Property Expert
I am an agent who specializes in pre-foreclosures and REO's (bank owned properties). Call (408-316-0793) or email (firstname.lastname@example.org) and I can help you determine if said properties make sense for you. I can also walk you through the process.