Listings of REO properties in your area are available through the REO Network, a commercial service at www.reonetwork.com, which also includes links to local realtors specializing in REO properties. You can also research Fannie Mae and Freddie Mac REOs at www.homepath.com and www.homesteps.com, respectively.

As in any real estate purchase, buyers need to do due diligence before buying. Research home values in the neighborhood, both by recent sales and assessments. Eyeball the property and the neighborhood, and don't agree to finalize any sales without an inspection. Finally, anticipate and budget for repairs.