We've been hearing a lot lately about the smokin' deals on foreclosures and REO properties that are available. Newscasters rave about cheap homes over which buyers are fighting tooth and nail. In Orange County, however, these "incredible" deals can still seem out of reach to many buyers.

Although home values have dropped considerably in our neck of the woods, we have to remember how high they were in the first place. We then have to remember that 20% of value lost on a home that would sell for $750,000 in the peak of the market is still a hefty $600,000.

Seeing that something is "for sale" doesn't necessarily mean it's cheap, although people often get suckered into that kind of thinking. How many of you out there have gone for a buy-one-get-the-second-half-off deal when you only needed one in the first place?

All that said, when our clients come to us wondering whether they should try to get in the market on a "cheap" foreclosed home, we don't always answer with an enthusiastic "yes!" Often, the financing takes a lot longer to set up on these homes. Banks are less willing to negotiate than an individual seller would be. And other deals are out there with less fierce competition.

The moral of this post is: if you're in the market for a new home in Southern California, make sure you speak with an experienced real estate agent or mortgage broker. You may be a good candidate for an REO home if you have the time and energy to see the deal through to completion. In reality, however, you can probably find a decently-priced home, not owned by the bank, with a lot less hassle and just as much satisfaction.

And when you do get that new home, make sure to invite us to the housewarming party!