Where should you look, though? Some states are hotter than others, and the success of your venture will depend on finding the right markets. Here are ten states that hold the most promise to budding homeowners, entrepreneurs, and investors looking to score big in the market.

Ten States for Great Foreclosure Savings

One easily way to find foreclosure savings – the amount of money you can expect to save by buying foreclosures versus buying non-distressed properties – is to take the average home sales price in the state and subtract from it the average foreclosure sales price. Then, divide that number by the average home sales price to get the average discount available in the state.

Using that formula, the ten best states are:

Delaware

Georgia

Illinois

Maryland

Massachusetts

Michigan

Ohio

Oklahoma

Virginia

Wisconsin

The average foreclosure discounts for these states range from a low of 37% (Virginia and Georgia) to a high of 50% (Oklahoma). That last number is astounding. Just think – on average, buying a foreclosure in Oklahoma will save you 50% off the market price of a similar property!

The highest average foreclosure sales price was Virginia, with $237,742. The lowest average foreclosure sales price was in Michigan, at $60,211. Michigan also has the highest foreclosure rate in the bunch, with one out of every 346 units in the foreclosure pipeline.

Clearly, states like Michigan – states with high foreclosure rates, low average foreclosure prices, and substantial discounts – are the ideal shopping places for investors looking to turn distressed properties into lucrative investments. Of course, virtually any state has good deals available; all it takes is a little research and some simple math calculations.

Fine-Tuning Your Foreclosure Discounts

To get a better idea of how much you can truly save on a home, take into account the quality of the property itself and estimate how much money you will need to spend on it to make it livable. Also consider the neighborhood for the individual property and do your due diligence. Sometimes the largest discount isn’t the best. (In Michigan, after all, there have been foreclosure homes practically given away for free. The catch? They’re just one notch above condemned.)

Want Terrific Deals on Foreclosure Properties? Check Out These States is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

With so much single family and multi family homes for sale remaining unsold, housing market analysts stated that it is not surprising that vacancy levels have escalated in the past few years. The report from Goldman Sachs estimated that the number of vacant housing units in the country stands at around 3.5 million. Reports have revealed that the estimate was based on the data presented by the U.S. Census Bureau.

However, other reports put the estimate at a much lower number. According to several other reports, the number of excess vacant homes in the U.S. as of April 2011 stands between 1.45 million and 2.45 million.  Analysts who favor this lower estimate claimed that even with huge amounts of existing properties offered at foreclosure auctions, the housing stock of the nation will likely decline within a year since very few residential units will be added within 2011. They predict that excess stock of residences in the U.S. will dip within the range of 750,000 to 1.7 million by April of next year.

If the lower estimate is to be used as gauge, the U.S. will then be able to get rid of its excess supply of non-foreclosed and foreclosed houses by 2014 at the earliest and 2016 by the latest. Under the Goldman Sachs estimate, current stock is much higher, but the firm's report also provided a higher estimate when it comes to household formation.

According to the report, the recovery of the single family homebuilding sector will be very slow, owing mainly to the huge amount of distressed houses that are still in the market. However, housing starts is still expected to add another 600,000 by next year. The figure will be coming from the additional units of 475,000 recorded last year. Although housing starts are projected to increase, analysts believe that it will take years before they return to the healthy yearly average of 1 million units.

With foreclosed houses and bank-owned properties still at elevated levels, most housing market observers predict that normal conditions in home construction will not occur until 2015 or even 2016. They also asserted that the rest of 2011 will remain a difficult time for housing, with minor improvements expected in 2012.

Vacant Non-Foreclosed and Foreclosed Houses Estimated at Over 3M is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The demand for change was prompted by allegations that emerged last year that a big number of properties under residential and commercial foreclosure listings were processed using faulty documents and signed by robo-signers. The changes that were recently demanded by regulators will reportedly cost banks around $1.1 billion, a cost that is related to order of consent, while yearly expenses are estimated to be around $35 million.

Aside from instructions to iron out lenders' procedures, federal regulators, along with government-sponsored enterprises Freddie Mac and Fannie Mae, also presented plans that will promote successful loan modifications in the country. The move, analysts reported, is meant to control the continuous increase in the number of repossessed houses and foreclosed fixer upper properties for sale that are hammering the prices of residential properties all around the country. Under the loan modification plan, mortgage servicers will be required to approach homeowners earlier and more often than before following the initial delay in mortgage payment.

Moreover, mortgage firms will also be required to pay higher fees to servicers and satisfy certain benchmarks and timelines covering the processing of bank foreclosed homes and loan modification actions. Regulators have also demanded that banks provide a single contact point for borrowers to avoid getting them passed from one employee to another, a usual occurrence during the height of the foreclosure crisis which resulted in confusion and in most cases, outright foreclosures for a big number of homeowners.

Another change that is being required from banks is the addition of more employees who have enough knowledge when it comes to dealing with foreclosures and house repossessions for sale. According to some housing experts, most of the errors committed during the housing industry crisis were due to shortage of staff among banks and mortgage servicing firms. This shortage was also part of the reason why a lot of institutions opted to use robo-signers, analysts further added.

Regulators are hoping that the changes will make it easier for both banks and homeowners to deal with foreclosure issues. They also expect improved practices to result in fewer bank foreclosed homes and repossessed properties in all areas of the country.

Changes in Processing Bank Foreclosed Homes Set to Cost Lenders a Lot is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

According to various housing market reports, the number of foreclosed and repossessed homes in the country is likely to increase further in the coming months as CoreLogic estimated that around 1.8 million homeowners were either in foreclosure or delinquent in their payments as of March of this year. In addition, the nation's shadow inventory, or those distressed properties not yet in the market, is expected to expand the already 3.5 million homes that are already available as of the first quarter of 2011.

To help alleviate the problems caused by house foreclosure auctions, the Federal Reserve has committed to coordinating with businesses and community associations to provide data, research and other support to the housing market. The agency also reportedly claimed that it will keep steady its balance sheet after it has completed the purchase of Treasury bonds. Bernanke, during his speech in Virginia, also discussed efforts exerted by community associations to prevent foreclosures and assist small businesses in acquiring loans.

The Federal Reserve has also earlier expressed a willingness to maintain stimulus programs aimed at addressing home market problems caused by the massive amount of foreclosure homes. The agency will reportedly continue the initiatives after it has completed the purchase of Treasury bonds in June of this year worth around $600 billion.

Meanwhile, economists claimed that the problem with the high level of foreclosure bank owned auctions will not be resolved until the unemployment issue is addressed. Data showed that joblessness is particularly high among minority groups, younger people and less-educated individuals. The unemployment rate of the country as of March 2011 stood at 8.8%. Although this is lower than the record high 9.8% posted in November of last year, officials from the Federal Reserve stated that this is still way too high compared with the government's target of 5.6%.

Government officials also stated that, aside from the flood of foreclosure homes, the housing market is also suffering from the huge amount of underwater mortgages which have eroded property values in almost all parts of the country. However, most of them believe that things will start to get better for the housing market come 2012.

Unemployment and Foreclosure Homes Hindering U.S. Economic Recovery is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Even when several programs designed to stop foreclosures have beenput in place, a huge number of regions in the country still suffered from the foreclosure crisis. The impact of the crisis is mostly felt by states in the west, analysts have stated, and these markets are looking at further market depression before the current year ends. A recent report has revealed that residential property prices in the west declined by another 4.3% during the month of March.

With foreclosed home auctions for sale and distressed dwellings continuing to dominate home-selling markets in this part of the country, analysts asserted that the price decline and projections of further price depressions are not surprising. The western region is comprised of hard-hit areas such as California, Arizona, Nevada and Utah. Other states that are included in the western region are Colorado, Idaho, Montana, New Mexico, Oregon, Washington and Wyoming. The price decline in this region, analysts stated, is paving the way for a double dip in housing prices that is expected to persist throughout spring.

The drop in residential prices in the west is being attributed mostly to the continuous rise in the number of foreclosed houses and distressed real estate in the region. The area's price problems, analysts have asserted, is even more evident given that majority of the remaining regions in the U.S. have flat home pricing trends during the month, with the nationwide price average even recording an increase of 1.3% in the 2011 first quarter compared with the last quarter of 2010.

With foreclosure inventories remaining high and the very few buyers in the market opting to buy properties on distressed houses listings instead of newly-built homes, analysts are predicting that the downturn will continue throughout 2011. They claimed that the price problem in the west is mainly due to the fact that more than 40% of sales of homes in the region are currently accounted for by REOs and foreclosures.

Housing experts also asserted that as long as distressed and foreclosed houses remain elevated in areas like Arizona, California, Nevada and Florida, home prices in the west will not be able to recover. They stated that foreclosures need to be cleared first before the market can recover.

Foreclosed Houses Projected to Impact Prices Again in Western U.S. is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Foreclosure statistics in the region have also hit record highs, but local market analysts reported that it is getting back on its feet quicker than other areas. They asserted that in Washington D.C. and the suburbs surrounding it, prices are back to near-normal market levels. Although they admit that prices of homes remain lower than pre-crisis period, buyers will still get properties for the amount they paid for.

For buyers looking for a distressed property or a short sale, realtors have warned that they are not going to find any that are priced at the same level as other U.S. markets where most distressed homes are practically half of their original worth. In the region, realtors reported that properties and parcels of land are priced reasonably, and land is not exactly cheap in this particular market. They also revealed that seekers of foreclosed dwellings and short sales often end up disappointed, particularly those that expected to find heavily-discounted dwellings.

They explained that buyers might find low-priced foreclosed houses in the region, but once repairs and renovation costs are factored in, they will end up with more expenses given that the purchase price of distressed properties in the Washington area is not as low as in other hard-hit markets. For houses that are ready for immediate move-in, realtors reported that they are priced depending on their location and their features.

And despite being priced at market value, these properties are reportedly receiving multiple offers and getting purchased faster than cheaper houses offered at foreclosure auctions. Most market analysts also revealed that short sales are not common since majority of short sale houses in the Washington region end up getting priced higher than similar transactions in other areas. They further asserted that the idea of a giveaway deal is already considered outdated in the area.

Although foreclosed houses can be found in the Washington region, local realtors stated that the area's housing market is neither a seller nor a buyer's market, but a well-balanced industry. They stated that prices have already stabilized in the area and they are expected to rise further in the coming months.

No Foreclosed Houses at Giveaway Prices in Washington Region is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

For young homebuyers, purchasing a foreclosure will mean shelling out a lower amount for the actual purchase of the home, but might mean extra costs for house repair. But with prices of houses continuing to fall and interest rates remaining low, analysts stated that dwellings have definitely become more affordable than ever before. However, they stated that the actual purchase price will not be the biggest challenge.

Most lenders only approve financing applications from people with high credit scores. Even when buying a cheap home offered at home auctions, securing financing will not be easy if the applicant's credit history is not at par with what lenders are currently requiring. Mortgage bankers have advised first time younger buyers to make sure that their credit histories are in order. They recommend paying credit card bills and students loans first to improve their credit scores before making a home purchase.

Another detail that first time purchasers may encounter is the high amount of down payments being required by most lenders. For younger homebuyers, going for bargain-priced foreclosed houses will not mean that they will be able to afford the property quickly, not if their earnings are just average and their credit histories are less than perfect.

Brokers reported that majority of lenders require an upfront down payment of 10% of the actual price of repo homes for sale or non-foreclosed property that a buyer wishes to purchase if that particular buyer is not earning a lot of money and does not have impeccable credit history. For younger homebuyers who do not yet have a long credit history and are buying a home for the first time, brokers suggest applying for a U.S. Federal Housing Administration (FHA) loan.

First time buyers of foreclosed houses or regular dwellings usually favor FHA loans, mainly because it will be easier to get accepted for this type of financing and it requires a down payment of only 3.5%. FHA financing also has lower rates of interest. Analysts also advise first time buyers to purchase only if they are sure that they can stay in their homes for at least five years since values are unlikely to appreciate soon.

Details to Consider when Buying Foreclosed Houses is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Housing starts in the whole country declined by 23% in February of this year, recording an annual rate of 479,000. With more distressed houses and foreclosed land for sale to compete with, new home builders were unable to start more projects during the month, housing market analysts have stated. They are also getting hit by continuous drop in housing prices and the lack of growth in the job market.

To top it all, wholesale prices have also gone up because of a surge in energy and food costs. This, economists reveal, will restrain consumer and business spending which is bad news for the housing industry. They stated that the few potential homebuyers left in the market will be more likely to purchase fixer upper home sales than new homes since the former are much cheaper. They explained that rising prices will make consumers more reluctant to spend and most are likely to hold on to whatever money or savings they have left.

The drop in housing construction activities in February showed that home builders have become even more cautious, analysts have stated, particularly since most of them are expecting more foreclosed homes to enter the market in the coming months. Some economists have earlier predicted a slight increase in residential investments in the U.S. in the first three months of this year, but most have now changed their predictions, stating that it is more likely that investments in housing will remain flat as the three-month period ends.

Aside from the fact that most buyers are finding bank owned homes to be more to their liking and more fitting to their financial conditions than new houses, home construction also suffered from heavy snowstorms that hit the North America region during the month of February. Economists also said that the weakness in the residential market was demonstrated in the decline of single family construction.

With a lot of cheap foreclosed homes to compete with, most builders of single family dwellings stayed out of the market in February, with activity in this category recording a decline of 12%. The drop made February the slowest month for single family construction since March of 2009.

Foreclosed Homes and Unemployment Hurt Residential Construction is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Home foreclosures by state have risen at almost record highs last year. However, a huge percentage has been blamed by some analysts on careless processing of foreclosure documents and deficiencies in the procedures used by lenders to handle foreclosures. These issues, along with other process-related concerns, are being closely scrutinized by federal regulators in Washington.

Questions over the validity of the procedures used by lenders in processing foreclosures and properties sold at public property auctions for sale have led to legislators considering the possibility of sanctioning mortgage servicers. According to various reports, the Federal Reserve, along with other federal regulatory agencies, have been closely studying the foreclosure procedures used by 14 of the country's biggest mortgage service providers and are now discussing the possibility of providing sanctions.

A foreclosed home search online often provides researchers with more information than the location and price of foreclosures for sale. Most of them have also likely read broader issues related to the housing industry, such as the robo-signing controversy and the moratorium imposed on foreclosures last year. This increased scrutiny was reportedly part of the reason for legislators' investigation of the practices of mortgage servicers in the country.

The investigation reportedly showed serious problems in the way foreclosures and repossessed property sales were conducted. Problems range from documentation mistakes to errors committed by contractors to practices not properly overseen by lenders. According to officials, the mistakes vary in degree and nature from one mortgage firm to another. Regulators are now reportedly considering the nature of actions that will be taken against servicers found to have committed blunders in handling foreclosure cases.

Regulators reportedly stated that the effort is meant to improve the standards of services provided by mortgage firms, from the most basic foreclosed home search information to the most important documents that can result in homeowners losing or keeping their homes. Remediation for borrowers affected by faulty procedures is also reportedly being considered.

Foreclosed Home Search Reveals Processing Problems is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Florida was among the ten states which had their foreclosure sales accounting for more than one-third of their overall house sales in the first quarter. Nevada posted the highest percentage of sales at 63.5 percent.

A total of 35,410 distressed properties and foreclosures in Florida were sold in the first quarter, accounting for 15.2 percent of all foreclosure sales nationwide during the quarter. The first-quarter total also marked an increase of more than 9 percent from the total one year earlier, but it marked a drop of nearly three percent from the previous quarter.

Among the states, California posted the highest foreclosed home sales volume at 59,823 units. Florida was second and Arizona was third with 17,307 units. Everyone who bought a repossessed property for sale in the country in the first quarter got a substantial discount, as the average price discount for all REO homes nationwide was 34 percent.

In Florida, the average price discount for bank owned foreclosures was 37.8 percent. For all types of foreclosures sold, whether still in pre-foreclosure or already foreclosed, the average price was $121,394, lower by 28.4 percent than the average price for all non-foreclosed homes sold during the quarter.

Nationwide, the average price for foreclosure homes sold was $171,971, lower by 26.7 percent than the average price for non-foreclosures sold during the quarter.

While Florida was third in foreclosure rate and second in total foreclosure filings among the 50 states in the first quarter, Florida was not among the top five states in percentage of foreclosure sales and in average sales price discount. The new entrants to the foreclosure sales chart were Massachusetts and Rhode Island. They posted 42.15 percent and 41.64 percent in percentages of foreclosed home sales, respectively, during the quarter.
 

Foreclosed Home Sales in Florida Accounted for 39 Percent is a post from: Foreclosure Magazine - Read more about how does foreclosure work.