QUICKTIP: Everyone wants a great deal on a piece of NYC real estate, and one way to find them is to shop for “real estate owned" homes. REOs are properties owned by a lender--typically a bank, government agency, or government loan insurer--that didn't sell at a foreclosure auction. Buyers can often snap them up for a lot less than they’re worth because banks see them as a drag on their balance sheets--and will often give them up at steep discounts.

To get your hands on an REO in the city, head on over to real estate data site PropertyShark. Check out their Foreclosures database and click on the last tab, where you'll be able to unearth REOs like this Upper West Side condo.

The view from the rooftop of 184 Thompson Street, where an REO condo sold for $610,000

Contact the bank or broker

Once you've found a place that catches your eye, you'll have to submit a bid for it. Some large banks have departments that deal with REOs, while others contract with real estate brokers who specialize in these types of sales. Bank of America, JP Morgan Chase and Wells Fargo all have searchable databases where you can locate their REO listings, as well as the right people to contact.

Name your price

Remember: REOs don't have asking prices. But you can still get quite a steal. For example, the West Village condo mentioned above was repossessed by the bank in 2010 when the owner failed to pay the nearly $800,000 mortgage. Half a year later, a buyer swooped in, paying only $610,000 for the apartment--about $306,000 less than the owner had paid in 2007.

Also, there are ways to get a sense of how much you should offer.

To estimate how much an apartment is worth, look up recent sale prices for similar, nearby places with a Comparables search on PropertyShark.

Also, PropertyShark's detailed property reports ($9.95 each, or $39.95/month for 150 reports a month) provide a wealth of information on individual apartments. For example, you can figure out how much the bank needs to recoup by looking up the lien amount from the foreclosure auction in A8. Foreclosure. You can also look at A9: Property & Sale History to see the most recent deed, which shows how much the owner paid for the home originally.

The property report also has information on title documents, building permits, code violations and the neighborhood, so you can be as informed as possible about what you're bidding on--and justify your offer.

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Above, property reports have the full history of scheduled auctions and sales

Don't expect an open house

Though REOs don't have traditional showings, you should be able to tour the property before making a bid. It will depend on the individual bank and how they handle REOs.

One of the benefits of an REO is that the bank has already evicted the previous owner, so the apartment will be vacant. The downside? Homes that have been empty for some time often require major renovations--and that means cash. In some cases, a place may no longer meet the building code. Be sure to factor in the cost of repairs to your bid.

Talk to a professional

​Since this is not your average real estate transaction, you’d do well to consult an experienced attorney or specialized broker during the buying process. Also, when it comes time to do the deal, make sure you have documentation that the title to the home is clear, so that you know there are no other creditors.

PropertyShark.com is a real estate website that provides in-depth data for more than 75 million properties in New York City, Philadelphia, Los Angeles, San Francisco Bay Area, and other major U.S. markets. The company covers most of the U.S. with a primary focus on the New York real estate marketplace. Click here to see what services and data are offered in your area.

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