Do Some Research
While there are many foreclosed properties on the market these days, they aren't all being sold at low prices. You'll want to do some research before you buy a home to determine whether you're getting a good deal. If you find a house that you like, check out the prices of other foreclosures in the area. You'll also want to find out how long the property has been on the market. If the bank has owned the home for some time, there's a greater chance you'll be able to negotiate a lower price.
If you're looking for a property that's likely to increase in value, search for neighborhoods that have few foreclosures. Areas that are flooded with repossessed homes will likely take awhile to recover.