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The Department of Housing and Urban Development (HUD) acquires homes which have suffered foreclosure under an FHA-insured mortgage and offers them for sale. Their objective is to offer these "as is" homes in an attempt to recover the loss incured due to the foreclosure. They will probably need some repair work. Although a HUD-authorized real estate agent or broker is required to sell these homes, anyone may buy them.

When you find a HUD home you want to buy, you will need a real estate broker to submit an offer or bid. HUD homes are normally sold within on offer period. At the end of this period, the sale goes to the highest reasonable bidder. If the home can't be sold in the initial period, you can submit a bid until it is sold. Bids are accepted any day of the week, even weekends and holidays. When your bid is accepted, your real estate agent will be contacted within 2 days

The Department of Veterans' Affairs (VA) acquires properties as a result of foreclosures on VA-guaranteed and VA-financed loans. For VA homes, you should have a real estate agent prepare the Offer to Purchase And Contract of Sale VA form. Your agent will submit your offer through the listing broker for approval.

A Real Estate Owned (REO) or a bank owned property is one that returns to the bank after an unsuccessful foreclosure auction. Usually, the amount of money owed to the bank is higher than the equity in that property. The bank will usually try to sell the property at the higher possible price, and will most often counter your starting offer.

Be forewarned that bank foreclosures are not always a great deal. Some properties have liens against them. Some have people still living in them. Bank owned properties always sell in "as is" condition so your offer must include an inspection contingency period. This gives you an out in case the inspections bring to light problems that the bank won't pay to repair.

Do your homework before ever making an offer. Look at other homes to find out if they are comparably priced. Make a calculation of the costs of renovation, and be careful not to get caught in a 'bidding war' as this can easily lead to make an offer higher than market value. Make sure to get the property inspected and have the bank make any repairs before committing to the deal.