Google lender’s name plus REO
http://www.downeysavings.com/bank-owned-properties
Not all REO’s get on MLS, and many real estate types don’t like to do REO’s - very little money in it for them.
In CA, the property is assessed at the sale amount - check your area.
Some are trashed (the garden hose in the crawl space is my fav so far). Not only to the departing owners take it out on the house, theives go for the copper (pipes, wire, and, especailly, air conditioner coils. (China is building a new power plant every 10 days (so I saw). Hence the demand for copper.
Mostly, the problem is simple deferred maintenance - if you can’t make the mortgage, you probably can’t afford a new roof, floor, cabinets, etc.
If you can use a level, drill, chalk line and a few other common tools, you CAN install a kitchen - it is patheticaly easy (and use 3/4" plywood covered with ceramic tile for a counter - much nicer, and easier than foirmica).
Look at it this way - you WILL, sooner or later, replace the floor covering, wash the walls, paint, etc. If you do it when you first move in, you save a ton on the purchase price, you save more in lower property tax. Plus, doing it while you’re as young as possible beats the hell out of trying it when the joints and muscles no longer work all that well.
So - find something with a solid structure and lots of little “uglies” needing a day or two of work each- it is MUCH cheaper than a “move-in ready” nice and spiffy place. 20 years from now both it and the fixer will have needed the same work. The person who bought the spiffy one is going to be 20 years older, and maybe not so able to do the work.
If you have the money to hire all the work, the fixer is still the better deal (you will need to put up with the mess) - you may or may not pay less (if you know who/what to call, you will save), but you WILL get exactly what you want, in exactly the color you want, and may well not get re-assessed (YMMV) etc.
Note to all: REO’s are (yeah, here comes the "gotcha- I know one…) all sold “as is, where is; no representations, blah, blah, blah” - if you trust yourself to inspect, you’re set - otherwise hire an inspector. NOTE: an appraiser is NOT an inspector - he/she may note code violations, but will not dig around the foundation looking for bugs/rot/inadequate structure (I’ve seen some jewels!). The air conditioner doesn’t work? The roof is rotted? Foundation is sinking? It sucks to be you, 'cause YOU are the one to fix it. The bank does not care about your problems