Since I’m assuming you want “A Good Deal” here are a list of circumstances that create a “good deal” opportunity.

1. OWNER SOLD:Seller is trying to sell their home in a tough market, and after spending a significant amount of time listed, and no offers grows in significant motivation. Benefit: Seller is motivated and tired of no activity, plus may have significant equity in the home allowing for greater negotiation. Negative: They might not “have to sell”.
2. SHORT SALE: Seller is approaching a bad financial situation, is listed for sale, and decides to ask their bank to release some mortgage amount obligation, to help them sell the house for less.  This is called a “SHORT SALE”. The bank is willing to sell “short” to release the owner of mortgage obligation at a lower amount, but owner is responsible for attorney, tax and lien fees.  Benefit:Seller doesn’t care what it sells for as long as the mortgage company approves the amount.Negative: Short Sales are tricky as they often take a long time during the decision process, and many agents/owners do not know how to do them properly. Often, by the time a buyer comes, it’s too late, and the mortgage goes into court for foreclosure.
3. FORECLOSURE Part 1: Seller starts defaulting on mortgage payments (90 days) and get served Foreclosure papers. Benefit: none Negatives: If the foreclosure process begins, the seller will begin an 8month redemption period,upon which owner is living in the home basically for free, and is not making any improvements.  Often, the home begins significant deterioration with no significant improvement by the owner. If the roof leaks, “oh, well”. The bank will not negotiate offers at this time, as redemption means: owner has the chance to get caught up on payments, and redeem their mortgage loan.
4. FORECLOSURE Part 2: After the Foreclosure is post the Redemption period, the owners are asked to leave (Evict) and a company takes control, where they turn off water, gas, heat, electric, do board up of windows, etc and the home gets listed for sale.  The price of the property is often determined on (Value Opinion of a Broker) – ($ to bring the property back into livable shape) = (Sold in AS-IS condition)+(Subject to Bank Approval).  Benefit:This is what you hear about the most. The main point to consider is that the property is listed based on the value of properties in the area, and reduced by the amount of work that needs to be done to the home “at the time it is listed”.  Negatives: This means that if during the listing time water enters the basement, and the property is Mold infested, the bank may be more negotiable, but if you like the home, you still have to handle the mold.  The ideal foreclosure is where you have a good area, property has held up well through 8 months redemption, listing time, and the amount of work is minimal, and if there is work to be done, you have the financial means to improve it back into shape for less $ than the real estate company predicted.
5. Bank Owned/Corporate Owned: Usually same as foreclosure, but called something else.
6. Auction: Usually before placed on the market, usually 50% cash during bidding, and 50% cash within 5-30 days.

Here is an example for all scenarios, and why any of these properties could be a Bargain:

Owner Sold: Joe and Mary live in a 3 bedroom 2 bath home in Skokie, where the average price for this home is $400k. They listed their house for $419,900 hoping to get $400k.  After being on the market for 237 days, they may price reductions down to $379,000 and continue to make enhancements to the home to help it sell.  You walk in, and take advantage of their motivation, improvements and settle on a price of $362.  ($400 – $362)=(Bargain Savings $38k )

Foreclosure: Joe and Mary live in a 3 bedroom 2 bath home in Skokie, where the average price for this home is $400k. They listed for $419,900 hoping to prevent foreclosure, but after 4 months they cannot keep up with payments. (unfortunately, many people in financial distress wait too long, and do not get help quick enough). They stop improving the home and upon 7 months are served Foreclosure payments.  The house goes OFF market, no more improvements to the home, and they wait 8 months redemption.  After 7+8months=15 months of no improvements the bank takes over and says: (Property Value $400) – ($10k leaky roof, $5k for outdated kitchen, $3k for waterproofing the basement, $5k for general improvements) = List at $377k. keep in mind the $ that needs to be spent to get it up to par.

You walk in, and negotiate at $353. Bargain amount $400 – $353=$47k in savings, right? No. Now you need to do the work. $47k – $23k to fix the house = Bargain Savings: $25k.

Which one would you pick?