One person's misery might be another's opportunity.

With foreclosures soaring in Clark County, up 40 percent or more from last year, it might seem like a good time to swoop down and pick up that dream home for pennies on the dollar.

But before you decide to become a foreclosure vulture, just remember the adage: If something sounds too good to be true, it probably is.

"If you watch the late night TV informercials," said Sandy Hendrick, executive director of the Clarkww County Association of Realtors, "you would think there are instant millionaires out there."

Real estate agents caution against the novice trying to buy a home through foreclosure.

"I don't recommend going to the courthouse steps," said Sherri Adams, owner-broker of Century 21 Cascade Pacific. "Because there are people down there who are very knowledge, and they have deep pockets."




"I'm a professional," Adams added. "I have 30 years of experience, and there is no way I would be one of those buyers on the courthouse steps."

Actually, most auctions take place at the gazebo north of the Clark County Courthouse, at the northwest corner of Franklin and 13th streets.

Trustee, or nonjudicial sales, are the quickest and easiest way for a property's title to change hands through a foreclosure process. Lenders can go to court and ask a judge to order the home be sold through a sheriff's auction, but that process tends to be more expensive and time-consuming.

During a trustee sale, the opening bid often reflects what is owed on the mortgage. If no one steps forward to bid, the home becomes the property of the lender.

The auctions, held Friday mornings, attract a small group of insiders who know the market and have done their research.

"It's not a slam dunk," said Gary Colemansmith, a real estate agent who spends most of his time buying homes through foreclosures in Clark County. "If it were a slam dunk, everyone and their brother would be down there bidding. If you can't afford to lose, be real careful."

Colemansmith estimates he has purchased 750 homes through foreclosure in 13 years, beginning in Clark County, Nev., and the past four years in Southwest Washington. Even though he is an experienced player, Colemansmith said he still occasionally stumbles and loses money.

"Everybody wants to get into this," he said. "It's a game that most people don't understand, most real estate professionals don't understand."

Here are just a few of the steps a savvy buyer should take before jumping into the foreclosure game:

Do your research: In 90 percent of foreclosures, the house is worth less than what is owed on the first mortgage, an indication of how far property values have tumbled in the county, Colemansmith said.

Potential purchasers have to search for back taxes owed, as well as outstanding liens by contractors and even the IRS.

Buyers also have to be aware of real estate trends and prices for comparable properties in the area.

Mike Lamb, an associate broker for Windermere Real Estate Stellar Group, said in many instances, a buyer would be better off waiting until the title changes hand and the lender lists the home for a traditional sale.

"The bank has to protect its interest, so it bids what it's owed," he said. "Sometime there are deals. But you can't assume because it is sold on the courthouse steps, there are going to be great deals. The majority of time, there are not."

Bob McMurtrey, principal broker of Civic Realty, specializes in short sales in both Portland and Vancouver. Those happen when homeowners owe more on their mortgages than their properties are worth, known as being "upside down" or "underwater," and they want the lender to absorb the difference.

"There are always opportunities out there to do well, but you really have to study the market," McMurtrey said. "You have to understand the market. And you have to read it everyday. It's like investing in the stock market."

"I guess it could be like poker," he added. "Just because you know what the cards look like doesn't mean you are going to make any money."

Prepare to have deep pockets: Not only are you dealing with pros experienced in researching properties and understanding market values, but you will need major cash reserves. Those experienced with foreclosure auctions already have cashier's checks made out, with a little cushion if the price is pushed up through bidding.

"The biggest hindrance is the lack of capital," Colemansmith said. "You have to pay cash on the spot."

Buying a property is only part of having the necessary cash reserves. Some buyers won't be able to turn around and sell their acquisitions quickly.

"In today's market, a house might sit for a year," said Marley Petersen, a Washougal resident who watches foreclosures as a side business. "Getting insurance for an unoccupied house might be very difficult."

Remember, it's buyer beware: In most cases, homes purchased through foreclosure cannot be physically inspected prior to auction. Buyers will do a drive by and maybe peer through some windows, but they can't be sure about the interior condition.

"Let me tell you some horror stories," Colemansmith said. "You peek in the window. It looks good. You think you've got a buy. It turns out the house is completely contaminated with mold spores."

Buyers have no way of knowing if the wiring is shot, if the plumbing leaks and if the septic tank or sewer line is a mess - literally.

"You could buy an older home and find the sewer is not functioning," Petersen said. "That's $15,000 right there, when you had hoped to make $15,000."

Former owners and residents have been known to strip everything of value, light fixtures, kitchen cabinets, even widows, before vacating.

Colemansmith said some ex-homeowners will go as far as to pour concrete down drainage lines.

"People will do things to sabotage the house because they are angry," he said.

Homes sold through foreclosure auctions are offered "as is," with no guarantees.

"The only guarantee," Adams said, "they get purchasing something on the courthouse steps is if it breaks, they get both pieces."

Don't forget the human angle: Bad things happen to good people. Some buyers were sweet-talked into purchasing palatial homes, despite modest incomes. Others made prudent investments, only to lose jobs or experience other setbacks that caused them to default on mortgages.

"When I first got into the business, I had a hard time coming to terms with that," Colemansmith said. "I've seen some really sad situations. Divorce situations. Someone loses a spouse to tragedy."

People can be living in their former homes following foreclosure auctions, and evictions are rarely pleasant.

"If I didn't bid on the house, the bank would be the owner," Colemansmith said. "And they simply would hire a service to throw them out as soon as possible. I try to be more humane."