I received this question from a potential buyer recently, and since it comes up more and more often, I thought I would post my response to assist others who may be wondering the same thing.

The first thing to do is get pre-approved, preferably a "desktop" approval from a direct lender (this can be obtained through a mortgage broker or a bank). It will be hard, if not impossible, to get a seller, especially a bank, to take your offer seriously without this.

You ask about foreclosure homes, and many people do not distinguish between the different areas of foreclosure ie. short sale, in foreclosure, bank owned, etc. This can make a difference in how you approach the purchase process. 

The best priced properties are likely to have multiple offers as everyone is looking for a deal when they purchase a home, especially in this market. So, consider looking at the "normal" sales. These are people who also want to sell their home, but if they aren't as well priced as the foreclosure homes, they are not as likely to be receiving swarms of offers.  And, if they have equity, they may consider taking an offer that is less than their asking price.

In addition, they are more likely to make repairs and offer credits than a short sale or bank owned/REO.

When making an offer on a short sale, keep in mind that the bank may take weeks up to 4 weeks or more to respond to your offer, so plan to be patient.

Also, with regards to a bank owned/REO or short sale purchase, you are unlikely to get any repairs or credits from the seller to fix any problems in the property and further, banks give limited if any disclosures about potential problems in the homes. So, it is imperative that you have a home inspection done so that you will be able to make an informed decision about the condition of the property.

If you have any additional questions about foreclosures or would like to search for available homes, click Costa Mesa Real Estate, Newport Beach Real Estate, or Huntington Beach Real Estate or contact me at christine@donovanblatt.com.