Foreclosures were once the turf of the most aggressive investors, but these days ordinary home buyers can hunt for fire-sale U.S. house prices on a wealth of Internet sites.

Large real estate sites such as PropertyShark.com and RealtyTrac.com showcase a growing number of U.S. properties in pre-foreclosure and foreclosure, a phenomenon that is becoming far more common with the U.S. subprime mortgage meltdown.

They pull together thousands of listings based on public information, adding photos or aerial images of the houses and eliminating the need to sift through court documents. In some cases, they offer phone numbers of homeowners and court dates.

In March, Yahoo Real Estate opened a comprehensive site on foreclosures together with RealtyTrac, expanding the reach of such data to its nearly 500 million global users.

The goal for you as a buyer is to purchase a property at least 20 percent below full market value, although better deals are often possible, Yahoo's site tells the uninitiated.

Perhaps the most significant change is that ordinary home buyers are making more use of these sites, less hesitant to capitalize on the financial misfortune of others.

They will find many more opportunities, as the U.S. foreclosure rate by the end of 2007 had risen nearly 80 percent from a year earlier.

It is what it is. I'm not going to sit here and tell you otherwise, said Bill Staniford, partner at PropertyShark. This is a debacle going down from the top of government to the mortgage brokers. There's lots of blame to go round, but the more people in this industry there are, the better off the homeowner.

WAIT FOR THE GAVEL

Potential buyers are also getting involved earlier in the process, finding a way to speak directly to owners on notice for default rather than wait for the gavel to come down.

Many people think about the auction when they think about foreclosure. They get fixated on it, said Staniford. But most of the transactions are getting done before the auction.

RealtyTrac says traffic to its site has tripled to about 3 million unique visitors every month from 1 million just two years ago. It estimates as many as 40 percent of visits come from first-time home buyers rather than investors or brokers.

Yahoo Real Estate saw a fivefold increase in traffic to its foreclosure listings since it expanded the site last year.

There are a lot of people who have been priced out of the market and they're seeing their rents go up, said Rick Sharga, vice president of marketing at RealtyTrac. Probably until next year, the level of foreclosure activity will remain at historically high levels.

RealtyTrac is seeing increased interest in its site from overseas investors, fueled by a weak U.S. dollar. The company aims to expand its subscription U.S. listings service to foreign nationals as early as 2008, and may eventually offer foreclosure information from markets abroad.

The challenge is that there isn't something exactly like U.S. foreclosure laws in every country, Sharga said.

Fresh data from PropertyShark shows the number of scheduled foreclosures in four large metropolitan areas -- New York City, Miami, Los Angeles and Seattle -- reached two-year highs in January. The number of foreclosures more than doubled in Miami and nearly quadrupled in Los Angeles in that time.

For Web users, a simple search shows how popular the term foreclosure has become, but the quality of many sites is unclear.

FLIP SIDE

Foreclosure.com this week cited more than 362,000 pre-foreclosure listings, nearly 39,000 sheriff sales and almost 281,000 bankruptcies.

ForeclosureUniversity.com aggregates news articles on the topic, while other sites give information on home auctions on a state-by-state basis.

On the flip side, the U.S. Department of Housing and Urban Development offers advice on how to avoid foreclosure if one can't make mortgage payments. Their recommendation: Don't ignore your lender.

Buyers interested in foreclosures should be wary of everything from hidden liens on a property to navigating their first approach to an owner.

This is not something we recommend people get into without educating themselves, Steve Schultz, director of product management at Yahoo Real Estate, told Reuters.

There are a lot of pitfalls, Schultz said. You may end up getting into a situation where you're going to upset a particular buyer. You're going to make a phone call and they're not really ready to get into a sales conversation.

If there is a silver lining, experts say, it's that regular home buyers may be less aggressive in the discounts they seek, offering some maneuvering room for people out of luck.

Sharga said the worst of the foreclosure growth could end by June, after a huge wave of adjustable subprime loans resets. Barring other economic upsets, the real estate market could take six more months to stabilize, he said.

A lot of the properties in foreclosure are there for really bad financing, he said. You're actually offering a sort of life raft for home owners in a sea of distress.

© Reuters 2007. All rights reserved.

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