Some good advice below. Just so you know, about half of bank-owned (foreclosed) homes available for sale are not yet listed with a realtor, and some may never be. If you're interested, I do have access to these "non-listed" properties as well- as far as seller information and addresses, etc. If you'd like to chat, feel free to contact me.
On a related note, there are certain realtors that will do "van tours" of all the foreclosed properties in an area. I would recommend that; gives you a good birds-eye view of what is really out there, and generally these agents know the whole process well.
Thanks, and Good Luck,
You will note some differences though. The seller may wish to pre-qualify you for a mortgage through their bank. You don't have to take a mortgage from them, but they wish to assure that you are able to buy the home. Because in most states a Purchase and Sale Agreement is the binding document, the bank may not recognize our Offer to Purchase as sufficient, and will not consider the deal binding without a signed P&S. Also, they probably won't negotiate the language and terms of the P&S.
And as somebody has already mentioned, almost all bank-owned properties are sold "as-is." This means the bank will not be responsible for fixing anything. This does not mean that your negotiated price cannot take these things into account. Just don't expect the work to be done before you get to the closing table.
I have had extremely good dealings with bank-owned properties and seen some really hairy things occur as well. I personally feel that there are bargains to be found in the bank-owned properties, but you have to do your work to find the one that works best for you.
Good luck. And don't hesitate to contact me if I can help you in any way, or just to talk about possibilities..
In all seriousness the best way to buy one is to get 100% educated about the process. I.e, understand the language ... "as is" means the bank holds no liability for the shape the property is in and depending on how long it has been sitting abandoned on the market this could mean all sorts of stuff (mold, pipe bursts, vandalizing, etc). Hire someone who is ready to sit down and educate you on the process (take you to see a couple places), explains what foreclosures might mean for future value. There are some good deals out there but you have to be dedicated to the hunt and very patient. Number one suggestion is to hire a buyers agent ... Unless you are a pro at foreclosures don't go it alone ... to much at risk, especially your wallet (and time).
Hope that helps!