In a market flooded with foreclosures, homebuyers can find steals easily. Or that's what many of them think until they begin searching. Soon, they learn that only savvy buyers get the best deals. Understanding how banks negotiate foreclosure deals is a must if you want to buy low in today's market. Here are five secrets every homebuyer must know when shopping for a foreclosed home. Don't make lowball offers on just-listed properties It's useless to make lowball offers on bank-owned houses that have been on the market for only a few days, says John Thompson, a Realtor at Samson Realty in Chantilly, Va. "When you haven't had opportunity to expose your property to the marketplace long enough, you would be reluctant to take a lowball offer," Thompson says. "Most of the banks are aggressive with their pricing, but they are not going to give the properties away." Asset management companies handle sales for banks. These companies price ...

Homebuyers are back. But they're not finding many for-sale houses to choose from. This dearth of for-sale homes isn't imaginary. In fact, the pool of properties actually has shrunk in housing markets across the nation. Only 2.32 million existing homes were available for sale in the U.S. at the end of September 2012, according to the National Association of Realtors. That figure represented a 5.9-month supply of for-sale homes at the September pace of sales. A year earlier, the supply of for-sale homes would have lasted 8.1 months at the then-current pace of sales. So, what happened to all the houses? Leslie Appleton-Young, chief economist for the California Association of Realtors in Los Angeles, and Rick Sharga, executive vice president of Carrington Mortgage Holdings, a mortgage company in Aliso Viejo, Calif., offer some answers. Sellers are on the sidelines.  Some homeowners have no reason to move. Others aren't motivated because they would take a loss at c...