All too often a Home Purchase is a highly charged emotional decision.  When you look at a home, you see yourself in the kitchen cooking, in the living room watching TV, you see the swing set in the back yard with the kids and the dog playing tag as the sun sets on the horizon.

This kind of emotional attachment to a HOME is an expensive way to buy Real Estate.

Any real estate professional will tell you about the "mob frenzy" that can occur at an REO Auction (Bank owned properties) and you may have even witnessed this, or been victim, to the excitement of bidding on something you're in love with.  More often than not, if you're not an experienced investor - you will pay Market Price or MORE!  I've seen this many times.

Use an Investors Eye when looking for a great real estate buy.  What i mean by this is do your homework.  If you are in the market to buy a property, either for your own home or an investment property, make sure you're working with a professional that knows how to get you the information you need to make sound business decisions about your purchase.

Here's a quick and dirty list of steps you should take:

1.  Understand the terms of the purchase - Bank Owned properties are often sold "As-Is".  Do your homework, inspect the property thoroughly before deciding if it's on your "wish list". 
Maybe even hire a home inspector if this property makes your Top 5 list.

2.  Run Sales Comparable - your real estate agent should be able to provide you with a history of past sales in the area.  Analyze the market trend for that area and consult professional opinions for speculation of the stabilization of this local market.

3.  Determine Equity Position - if you are buying this home to live in....determine your minimum equity position in this property.  Do you want $50,000 in equity?  $100,000?  More?

4. Buying an Investment Property - I share the opinion of many professional that this is a buy and hold market.  Positive cash flow is the most important thing to consider in this market.  Use cash flow analysis to determine your purchase price.

5.  Stick to your guns - Once you determine the maximum bid you are willing to make on a property, stick to your guns.  This is a financial decision, not an emotional one.

And finally, make the bank an offer that YOU CAN'T REFUSE.  Congratulations!  You just bought at the ROCK BOTTOM of the market.  The bottom is relative to what you value as a GREAT DEAL!

MOST IMPORTANLY - Work with Real Estate Professionals that understand these concepts, there are many in your area.  Find them and benefit from thier education and knowledge of this market.