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With the housing market in a slump, there are some hoping to score big with foreclosures, but experts say tread cautiously.

“The deals are possible to be made, but one misconception is that this is a way to make some easy money and that's just not the case,” says Bill Staniford, who owns PropertyShark.com.

PropertyShark.com lists foreclosures and homes in pre-foreclosure, known in the industry as lis pendens.

“One of the great things about the lis pendens stage is it looks exactly like a normal sale,” says Staniford. “You should work with a broker, you'd be able to go look at the property.”

Sean Moss with the U.S. Department of Housing and Urban Development says a sale in the pre-foreclosure stage is usually a win/win.

“The seller is able to sell the home without damaging their credit report,” says Moss. “You as a buyer – you receive the home that you want probably at a discounted price and the bank wins too because they don't have to go through the costly, painful process of foreclosure.”

Now buying a foreclosed home at a private sector auction carries the greatest risks. While you can save 10-25 percent, or on rare occasions even more on the property, experts say the cons far outweigh the pros.

“It’s not for the feint of heart because many times when you bid, you have to be able to put up cash money and you don't have that opportunity to inspect the house,” says Moss.

“You also may purchase a property with someone living in the property and then, if you purchase that property, you are now the owner and you have a tenant and you have to go through the eviction process,” says Staniford.

If a property does not sell at an auction, it becomes a REO – real estate owned by the lender.

“The bank then goes out and gets a broker to represent that property. So, then you're really doing a transaction, a normal transaction with a broker,” says Staniford. “Generally speaking, it’s market value.”

You can also buy a foreclosed home at a government-sponsored auction. This option carries far less risk than the private sector auctions. But whichever route you choose, experts say it is critical to do a title search on the property of interest to find any outstanding liens. They also recommend meeting a housing counselor.

For more information on free or at low cost housing counseling, click HERE.

For more information on how to buy a HUD home, click HERE.