Appearing on the CNBC news show  Power Lunch Monday, RealtyTrac Chairman and CEO James J. Saccacio fielded questions from co-anchor Bill Griffeth in a segment titled Upside of the Downturn.

Discussing the state of the nation’s real estate market and how investors may profit from foreclosures, CNBC displayed RealtyTrac’s numbers for August 2006 showing a 24 percent increase in foreclosures from July 2006, and a 53 percent increase in properties entering some stage of the foreclosure process from August 2005. RealtyTrac’s numbers are gleaned from public records in 2,500 counties around the country — 74 percent of all counties, accounting for over 94 percent of the nation’s households, Saccacio noted.

With all that information available, Griffeth asked for a laundry list of things investors should look for when deciding whether to invest in foreclosures. Saccacio pointed out that first and foremost it is important for investors to do their homework: To determine the level of the mortgage or trust deed being foreclosed — first, second or third in line; to determine if there are any other outstanding liens such as tax or bankruptcy liens presently attached to the property; and to get an idea of the potential value of the property to decide whether or not it is a viable investment opportunity.

He also reminded viewers that there are different stages of foreclosure, each with its own level of risk. The riskiest situation being the trustee’s sale (a public auction) where the property is being sold in its most “as is” condition since it is often impossible for an investor to inspect the property before purchasing it. Buying from the homeowner at the default stage or from the bank at the REO stage are slightly less risky. The best time, Saccacio said, was during the pre-foreclosure stage when the investor can work directly with the owner in foreclosure.

To learn more about investing in foreclosures, check out our resource center on our website at www.realtytrac.com.