Everyone has become painfully aware of the state of the real estate market today. But for some of those who are able to take advantage of the deals that are available, this is the perfect time to enhance their real estate portfolio. Whether buying purely for investment or to try and flip, the market is perfect for those of us who can afford to take advantage of some of the steals that can be had.Once you have decided that you are ready to take a chance and see what is available on the market you will have some choices of what type of property you’re interested in purchasing. The two most popular choices among real estate investors are foreclosures or REO properties. Foreclosures are properties that begin with a minimum bid which includes the balance of the loan remaining on the property and other fees associated with the property. If a foreclosed property doesn’t sell during an auction, it then reverts back to bank and becomes what is known as an REO property.Once the property reverts back to the bank, the bank is now the owner and the mortgage loan is no longer in effect. Now it is up to the bank to evict any people who are still residing in the property, do what repairs are needed and if necessary negotiate with the IRS to remove any pending tax liens that may have been filed against the property.If you are considering purchasing an REO property there are some things that you should consider prior to submitting your offer. Once you find a property that you are interested in you should investigate the prices of houses that have recently sold in the neighborhood to make sure that the price you pay is fair. When thinking of purchasing an REO property you should also take into consideration any repair or renovation costs that will be needed to get the home where you want it to be. When bidding you should also remember to keep your cool and not get forced into a bidding war, this may cause you to pay more than the property is actually worth.You should also keep in mind when looking at REO properties that the banks tend to sell them in “as is” condition. When submitting your offer on a property you should include an inspection contingency period which will allow you to cancel the sale if the inspection reveals problems that may be too serious to fix inexpensively. In most cases the bank will be reluctant to make any repairs to the property prior to selling it, so having an inspection done will protect you from submitting an offer on a house that may become more expensive down the road. When purchasing an REO property remember that you have the right to have inspections done and as long as you include it in the contract, if you are unhappy with the results of the inspection you can cancel the sale. This clause is meant to help protect the buyer and you should always take advantage of it. After all, you want to make sure you won’t have to pay double what the home is worth in repairs.