Foreclosure buyers are different. First, you won't get wealthy buying homes or properties at retail prices. A general rule of thumb is that property advertised and listed for sale is priced at 110 percent of its real value. Keep this rule in mind when you read the newspaper, browse the Internet listings, review a broker's Multiple Listing Service (MLS) book, or read any other real estate advertisement. Foreclosure buying is not part of the regular real estate market. You must also understand that only a small percentage of all the properties nationwide will end up in foreclosure. Unless the country is in a deep recession or depression, less than 1 percent of the homes will be in foreclosure. Most buyers check the newspaper, online listing and MLS to find properties for sale. Foreclosure buyers check the county records or commercial default listing services to find bargain properties for sale.

Foreclosure sales are outside of the normal market place with the market dominated by investors who are, or should be, knowledgeable about values and who understand what they are purchasing. Most savvy investors require substantial profits from the sale of foreclosures. Therefore, they don't bid up the prices. Knowing values and retail sales prices, they won't pay too much at the auction. This is very important to understand. Brokers intentionally hip up a competitive atmosphere around properties, especially in the hot retail markets such as San Francisco, Boston, and Seattle, to create an escalating bidding process that benefits sellers and brokers. Many buyers stop negotiating for their purchases much too early and so pay more than the market values for properties because they feel that they will miss the purchase. Experienced foreclosure buyers are careful not to bid the prices up. The market is not emotional. Typically, foreclosure buyers will start at 70 percent and will usually stop bidding and let the amateur take the property if the bidding goes above 80 percent of market value.

Remember, you're looking for a profit of between 25 and 50 percent. Time, research, and lots of diligent effort are required to buy successfully at the Trustee's Sales. Once you have attended a few sales and understand how the process works, much of the mystery as well as the glamour will be gone. The risks for the intelligent investor are reduced by doing your homework. Knowing values, understanding the market, estimating repair costs, and confirming your figures will make you tough competitor in the foreclosure market.

You need to learn and be prepared to take the time to understand the foreclosure marketplace. This is not as simple as calling a broker, but it is also not as expensive. Think about buying properties for between 25 percent to 50 percent less than the retail asking price. It only takes on and you'll be transformed into a real estate bargain hunter. Foreclosure properties are worth the effort. Most people are afraid even to consider buying such properties. After all, it is a risk.

The foreclosure buyer is unique in many ways. First he or she must research many properties to find that one profit-maker or ideal candidate. Second, foreclosure purchases require thorough investigation of the County Recorder's records to seek out any undisclosed liens or encumbrances. Third, negotiations with the seller take place in a different atmosphere in terms of the motivation of the seller and the buyer. Traditional real estate sellers have very little motivation, if any.

The average person wants a bargain property. However, the searching investigation, and negotiation with the seller often proves to be too mcuh work for the average person. The average foreclosure property is in a state of disrepair and so requires extra diligence on the part of the foreclosure buyer. Because the termite and roof repairs become the buyer's responsibility after the purchase of foreclosure, the importance of professional inspectors is soon obvious. In summary, foreclosure buyers move rapidly but cautiously as they understand the risks and work to manage those risks.