In a time of record foreclosures and short sales, supposed good deals could be found everywhere. However, many REO properties are listed at prices that would attract buyers, many foreclosures need so much work, the average owner occupant buyer would not be able to obtain a mortgage from a lenders. As a matter of fact, cash buyers have a big advantage because their only competing with each other. Many of the homes are then remodeled to mortgage ready status and sold to the typical home buyer at a profit for the remodeler.
Short sales or homes that are or worth only a fraction of what they owed. Many holders of these mortgages will take less for the home in order to save the time and the expense of foreclosing and many take a promissory note from the seller for the difference. Many lenders are regulated in the short sale process not to accept less than 90-95% of the last appraisal value. It must in the best interest of the lender to take less rather than to foreclose. So you see at first glance, foreclosure sales and short sales can be viewed as "good deals" but typically they are sold within 10% of what they are worth. A trained agent can better identify good values than the buyer by having immediate access to the Multiple Listing Service and the ability to search the history of a particular listing. Short Sale specialists can convince certain lenders to take much less than the appraised value by establishing a history of the property not selling and by providing the lender with market information that would lead the lender to believe it would be in its best interest to take the offer than to foreclose. Once a property is foreclosed, it is usually vacated, secured, cleaned out and winterized. Often the property has been vacated for some time and falls victim to lack of maintenance and or vandalism. Buyers of foreclosures must be especially wary of unforeseen repairs since most foreclosures are sold in as-is condition with no property condition disclosures. Many lenders require the buyer to purchase the property with no mortgage contingency, nor offer any type of warranty. Sometimes clear title isn't guaranteed, as is evidenced by the recent suspension of foreclosure sales by some of the country's largest lenders.
Therefore, some short sales and foreclosures can be identified as a bargain but most often with the help of a trained professional that can give the buyer the insight to determine what is a good deal and what is not. Once a potential good value is found, the negotiation process determines whether it becomes a good deal or a great deal. An agent is often needed as a buffer between the buyer and seller to ensure that offers aren't viewed as insults but rather as starting points. Realtors, being on the front lines of real estate, have the ability to identify valuation trends before many buyers, sellers or even appraisers can. Knowledge of where the market is heading can be the most useful tool in finding a good deal.