Treasure at the End of the Rainbow?

You can't miss the news of foreclosures, short sales and bank-owned property. But, are the good deals real? It depends.

Foreclosures are up - 24% of sub-prime mortgages are either delinquent or are in foreclosure and even prime mortgages are feeling a pinch with almost 4% past due or in foreclosure at the end of September.

Some things to look for:

1. Regardless of the type of sale (normal, auction, foreclosure, short sale, ...), do your homework! Figure out what you think the home is worth and from there, determine what your offer should be.

2. If the bank is involved (short sale or foreclosure), find out where the home is in the process - a foreclosure can easily take a year or more from start-to-finish. This will help determine how soon you could move in to your new home.

3. Set a time limit on an acceptance or written response to your offer. Don't let the bank keep you hanging for more than a 3-4 weeks.

Finally, GET AN INSPECTION!!! Always have your new home inspected as part of your offer and make sure you have the ability to back out if you don't like the inspection results.

Yes, there are deals out there, lots of them but only if you avoid the pitfalls to prevent paying too much or inheriting a liability.