Banks know what the property is worth, based on multiple opinions of value from experienced agents in the area, so they will almost never (unless its been on the market for well past 6 months) let the property go for a deep discount, unless of course, as said earlier, one was to go in ALL CASH.
Prices are pretty good now, you may get an acceptance at 5 or maybe 10 percent off the property's fair market value. You may be able to hit your 20 percent mark if you purchase a property that needs lots of work, secure a purchase and rehab loan rolled into one, and have a good team of rehabbers to layout some impressive renovations. In these rare, but not impossible circumstances, it is possible to achieve an After Repaired Value of 20 percent or more. I should note, however, that if you don't have all cash to buy the property on the cheap, then you're going to have to work with a hard money lender (would front the cash to purchase, but only if the deal makes sense). Right now i work with a few that charge 3 points and 12 percent annually.
So if you are looking for something like that, it HAS TO HAS TO be a fixer-upper with signifcant upside potential in a desireable and sought after location (that and/or a really attractive exterior with lots of Gross Living Area).
Let me know if you're interested in working together.
Nextage Your Way Home Realty
2184 John F Kennedy Boulevard
Jersey City, NJ
Start your due diligence by attending a sheriff's auction or two. You will then get a feel for the process, the volume of competitors you will be up against and the process. You will also find that most "Realtors" who attend the auctions are looking for these properties are seeking to resell for a profit and have beau coup cash on hand.
Honestly, it's worth a visit to a sheriff's sale.
Francesca Patrizio, Broker Associate, ePro, SRES
You use the words "Distress property" and thats exactly what they are. Unless you are willing and able to roll up your sleeves and do a lot of work you are not going to get any bargains. Most foreclosed homes are a mess. Trust me I have been in many with experienced buyers who know what they are doing and we have walked away from many.
And lastly - forget about buying at a sherrifs sale. Unless you are willing to pay cash virtually sight unseen you have no chance
I think your better off starting online and doing a bit more research on your own. Once you have a more solid idea of the market and the amount of availability, approach an agent with great ratings and go from there.
Depending on the price tag you put on your own time, it's probably worth checking out the paid lists. If your not concerned with the cost of your own time, you could the free, albeit scattered, alternatives.
So for what it is worth, my recommendation is to find yourself a really good agent, one that knows the area, has access to and is willing to share, and has the analystic ability to analyze the market and inventory data. And then listen.
Unwavering Commitment to Service
It is not worth most agents time to play games with a buyer whose express interest is in looking to underpay for an asset. First of all, even if you were to find something that you THINK is 20% below true market value, it could not be proven either way, because a property is only worth what a ready, willing, and able buyer is willing to pay. Not some third party's opinion of value. Most foreclosed properties that sell 20% or more "below" market are properties with problems that require lots of cash to correct. So they usually sell at their correct market value given the issues that exist.
I'm sure with the current market that you will get responses from "out-of-work" agents who are desperately looking for a commission, ANY commission. But be aware that very few if any good agents are going to undertake a relationship based on the primary interest of looking for a property to steal.
I know I wouldn't.
Good luck anyway though.