After a protracted bull market in housing, the tide has turned and now there is one of the largest gluts of real estate inventory in U.S. history. A large part of that surplus has made its way to the auction block, but the gloomy foreclosure forecast portends sunny climes and smooth sailing for buyers across the nation who are looking for affordable homes.

Where do you find foreclosure property, how do you evaluate what it’s worth and how do you acquire it? Even if you do not have the time or the inclination to make foreclosure shopping a full-time job, you can still profit from the hot foreclosure market. Here are some insights to help the typical consumer take advantage of this historic buying opportunity.

Although late-night television infomercials would have us believe that instant profits are available to those who simply read the classified ads, put fliers on telephone poles or plug in a real estate software program, the reality is not quite so simple or magical. Most people who make money in foreclosure markets do so through full-time endeavor, a great stroke of luck, or a synergistic combination of both.

Dealing in pre-foreclosure property, attending government auctions and performing due diligence work to uncover hidden liabilities such as unpaid liens, back taxes or pending lawsuits is a serious business with many inherent risks. And to do it well requires a savvy, strategic and persistent commitment of time, effort and research.

If you are like most buyers who are not the least bit interested in learning the complex rules of the foreclosure game – which is generally dominated by experienced and highly trained professional investors – not to worry. One of the most direct ways to participate safely and securely in foreclosures is through your local bank and real estate broker.

Ask your broker or lender for information about so-called “REO” or “Real Estate Owned” properties. These are houses owned by mortgage companies and banks, and before they are sold to the public they are carefully scrutinized and evaluated by a real estate broker who specializes in ascertaining the market value of foreclosed houses.

The inventory of REO real estate comes from foreclosure auctions. If a home is auctioned and the lender cannot get a high enough price to make the sale worthwhile, then the auction ends without a completed transaction. The lender – usually a bank or mortgage company – takes the property off the auction block and puts it into its own inventory. Then the lender hires a local real estate broker to list and sell the property to the general public at a fair price. By enlisting the help of a real estate agent to search for these special properties, anyone can find great properties at excellent prices.

But because lenders are eager to recoup their losses, their REO properties normally sell for discounted prices or include attractive financing and terms. The reason a lender might offer such incentives is that until the property sells, it is the lender’s responsibility to maintain it. And banks are not in the business of cutting the grass, cleaning the gutters, repairing the air conditioning and replacing the dripping faucets. The longer they hold on to property, the more money it costs them in miscellaneous fees.

So lenders are often motivated to help consummate a quick transaction to liquidate their inventory. They might offer to pay some of a buyer’s closing costs or make an attractive loan to help the buyer finance the purchase.

Many markets that saw values skyrocket are now experiencing a whiplash effect, as values become more realistic and inflated demand diminishes.

Consider this sampling of statistics related to desirable locations:

Colorado is one of the busiest foreclosure markets in the country. Despite that fact, Fort Collins, Colo., was ranked as one of the Best Places to Live in 2006 by Money Magazine. And Louisville, Colo., made the CNN/Money Magazine Best Places list in 2005.

The number of foreclosures in New Jersey grew nearly 50 percent within the past six months. But two New Jersey towns – Chatham and Moorestown – made the 2005 CNN/Money Magazine list of top 10 Best Cities to Live.

San Francisco, Sacramento, Ventura and Orange County, Calif., all score high marks in national surveys of great places to live or retire, and both Santa Barbara and San Luis Obispo are among Sperling’s Top 10 Best Places to Live. But California also has one of the fastest-growing inventories of foreclosures.

For those shopping for remarkable value in popular locations, there is a silver lining within the dampened housing market. And by searching REO inventory listings, one can enjoy the benefits of the foreclosure investment market without exposing oneself to extraordinary risk or working long hours combing through courthouse records.